Understanding CPC vs CPM
Learn the difference between cost-per-click and cost-per-mille pricing models
What is CPC?
CPC (Cost Per Click) is a pricing model where you pay each time someone clicks on your ad. It's ideal when your goal is to drive traffic to your website. The average CPC varies by industry, competition, and platform - typically ranging from $0.50 to $5.00 for most industries.
What is CPM?
CPM (Cost Per Mille, or Cost Per Thousand Impressions) is a pricing model where you pay for every 1,000 times your ad is shown. It's best suited for brand awareness campaigns where visibility is more important than immediate clicks. CPM rates typically range from $5 to $15 on most platforms.
When to Use CPC
Choose CPC bidding when you want direct response from your ads - website visits, sign-ups, or purchases. CPC is ideal for search campaigns where users have high purchase intent. You only pay when someone shows interest by clicking, making it efficient for conversion-focused campaigns.
When to Use CPM
CPM bidding works best for brand awareness and reach campaigns. Use it when you want to maximize how many people see your ad, such as launching a new product or building brand recognition. Video campaigns and display ads often use CPM pricing.
Calculating Your Costs
To estimate costs: For CPC, multiply your expected clicks by your CPC. For CPM, divide your desired impressions by 1,000 and multiply by your CPM. Always set daily or lifetime budgets to control spending. Most platforms also offer automated bidding strategies that optimize for your goals.
Key Takeaways
- •CPC is best for driving website traffic and conversions
- •CPM is ideal for brand awareness and visibility
- •Calculate expected costs before launching campaigns
- •Consider your campaign objective when choosing a pricing model
- •Use automated bidding when starting out