How to Choose a Payment Model in Internet Marketing?

How to Choose a Payment Model in Internet Marketing?

How to Choose a Payment Model in Internet Marketing?


Why do we pay Google Ads and other platforms, placing our ads? What payment models do you know and how to choose the most suitable one?


  1. Cost per click (CPC)


When any user clicks on the ad, the advertiser pays the website, where the ad was posted. The advertiser is charged only after the click.


CPC formula:


CPC = Sum of money spent over a specified time / Total number of clicks


The CPC model can be auctioned or fixed (you set the cost per click by yourself).


You can use CPC if your main goal is to attract traffic and you want to know how many requests traffic will bring you in the end.


  1. Pay per 1000 impressions (CPM)


Cost per Mille is a payment model where the advertiser pays for 1,000 ad impressions. In this case, it doesn't matter how many times the users click on the ad - the price will remain the same.


In order to calculate how much a thousand impressions may cost, there is a formula:


CPM = Amount of ad spend / impressions x 1000


CPMs can also be auctioned and fixed.


This model is suitable if the main goal is brand awareness, attracting attention and maximum audience reach.


But here it is important to consider that when choosing between CPM and CPC, you need to focus on CTR, which will show which model will be more effective.


With a high CTR for CPC conversions, you can get many times more, and with a low CTR, most often tens of times less.


  1. Pay Per Conversion (CPA)


Cost per Action is a payment model, where the advertiser pays for a specific targeted action on the website.


In this case, the advertiser himself determines what will be the target action that he will pay for: registration, payment, sending a form.


CPA = amount of advertising costs / number of targeted actions


In this case, it doesn't matter how many times the ad was shown or how many times the user clicks on it.


This model is suitable if the goal of an advertising campaign is sales, registrations, downloads, etc. But keep in mind that for new campaigns or websites that don't have conversion tracking set up, this model won't work.


  1. Cost per Lead (CPL)


Cost per Lead is a payment model for a received application, registration, phone call.


This payment model is suitable for those businesses where obtaining user contact information is an important stage in the sales funnel, in most cases the B2B segment.


  1. Pay per install (CPI)


Cost per Install - used to install a mobile application.


The advertiser pays as soon as the user follows the advertising link to the app store and installs the app.


CPI = ad spend /install 


We advise this payment model if the advertiser knows what price it is profitable to pay for this action.


  1. Pay Per View (CPV)


This model is suitable when your goal is to show your ad to the end or to a certain point. 


If the goal of an advertising campaign is to increase loyalty or build a brand's reputation, then it is better to opt for CPV.


  1. Pay per interaction (CPE)


For establishing contact with your audience this model is the most suitable one.


If you are developing a page and want to attract new subscribers and increase the activity of existing ones, you need to choose interaction.


The payment model must be chosen based on the main task and the primary goal.


Do you have an experienced professional who will find the right payment model for your business? And which model do you consider effective for your company?



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