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Understanding Cost Models.

Understanding Cost Models.

Throughout this course, I will be using the Cost models terms, and acronyms, specific to marketing, and online advertising let’s review the terms together.


This is particularly true online advertising that ads spaces sold by website publishers include news sites, blogs, weather sites, sports sites, you get the picture.

Publishers charge the different rates to for ads space how do they calculate the cost by just depend largely on clients goals.

1 Cost models

The agency wants to boost brand awareness by wallpaper Internet within the client the advertisement for example.

In Cost Models terms first, we start from clicks.


Clicks mean the total number of click actions on your ad. Depending upon you, how are you promoting, this includes, page likes, then responses or, apps install.


Click-Through Rate.

The number of clicks dived by the number of times an ad was shown. The higher this number, the better your ads performing, and be careful, this number can appear really, high if your ad is only been delivered, the handful of time.

Next, we have CPM or Cost Per Mille.

CPM or Cost Per Mille

The CPM stands for Cost Per Mille (impressions) Mille means Roman Numeral means 1000. (Thousand).

This is the average cost to get 1,000 impressions on your ad and impression any time is the advertainment is shown on the screen, but keep in the mind, and impressions do not guarantee, user sought-just appeared on the page.

2 Cost models

In the example of CMP: might be $10.00. to secure top space and popular website home page.


Cost Per Click, this is the average, cost per click, for this ad and it is calculated as the amount spent, divided by the number of clicks received, even you are paying for the CPM base, you also see the number, calculated, and typically you’re aiming for the lowest CPC, that returns to the result you want.

The client more focuses on response rate though like driving traffic of new product to your website.

Agency may choose instead (CPC- Cost Per Click) model, in example CPC $0.10 per click.


The advertiser also uses CPA (CPA-Cost Per Action) cost models when they want a more attractive result.

This could be a desire to drive sell, increase email signs up and get more people to request the code online.

All these events are valuable depending on what the clients’ goals are.

We call valuable events conversions.

3 Cost models

For example, the publisher gets paid when visitors see the ads on-site and make the purchase. There is no guarantee that someone is going to click on the ads but also allow buy something on the advertiser site.

Because of this how those take on more risk when using the CPC Or CPA model. This is why CPC and CPA rate typically more expensive then CMP.

Next, we have Frequency.


You see this number often, in more advanced advertising you will be, able to settle limit on, this, it refers, to the average number of times, each person receives, impressions of your, advertisement, advertisers, often try to cc this certain rate, prevent ad fatigue.

The last number you see often is called, reach, and this refers to the number of unique people, who saw your ad.

So, for example, 100 different people saw, your ad, your reach will be equal, to 100 you can reach 100 without average frequency of seven, and that would indicate, 100 unique people, each saw your ad, 7 times, which means 700 hundred impressions.

You encounter these terms, when you decide on advertising objectives and as a take look you advertising reports, you make important decisions, that would impact, how much money you spend, and whether or not, the campaign is successful, so basic understanding of these terms keys.

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About imran

My Name Mohammad Ramzan Bhutto. Live in District Jacobabad, Sindh, Pakistan. I have started blogging on Information Technology, my selected areas are Online Business, Digital Marketing, Make Money Online.

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