Q. I am feeling overwhelmed trying to create online marketing advertisements. What is the difference between CPM, CPC, CPL, and CPA?
A. These acronyms are used to describe online marketing methods. They are related in that they explain the costs of having ads displayed on websites. They differ in terms of how the cost is calculated:
CPM = Cost per Mille, otherwise referred to as the Cost per Thousand Impressions. You are billed based on every 1,000 page impressions.
CPC = Cost per Click. You are billed based on the number of clicks on your ad; if no one then there is no cost.
CPL = Cost per Lead. This is used when you want your visitors to subscribe or signup for an offer.
CPA = Cost per Action. You only pay after the visitor to your website takes a particular action, after clicking on the advertisement. An example may be downloading a white paper or ebook.
Social Media Tip: Creating a Facebook ad? Use CPM if you are looking to create a large scale awareness of your business. Use CPC when you are looking for people to click on your ad.