CPC VS CPM :How to choose CPC and CPM for different ad categories?

In the digital media trading environment, advertisers and publishers should make the most correct execution plan for advertising costs. When planning your advertising strategy, all the details must be taken into consideration. Today we will explain the bidding options.

Several pricing models are commonly used in programmatic advertising. These include CPM, CPC, CPI, CPA, etc. Therefore, different advertising types are different when choosing a bidding method. In this article, we will focus on the most popular CPC and CPM, and compare the types of advertising applicable to CPC and CPM. The data cases used in this article are all from ADCostly, which can ensure the accuracy of the data.

Detailed CPM analysis

What is CPM?

CPM stands for “cost per thousand dollars”, which means “cost per thousand”. In practice, this means that the price depends on the number of impressions provided and is calculated in terms of impressions per thousand. If an advertiser buys an ad at a cost of $100 per thousand impressions, they need to pay for the ad to be viewed 10 thousand times.

What type of advertising is suitable for CPM pricing?

CPM has the largest number of audiences. It is suitable for increasing the exposure and popularity on Facebook, and most of them are used to release new products or events.

The audience of Books And Reference is very large, and books can be directed to everyone who learns. When new books are produced, CPM is used for advertising. For example, after the production of a new fashion magazine, first of all, let the audience understand the production of this month’s magazine, and the magazine itself is very well-known, so it only needs to be released in CPM mode to let more people know the news, or Called message notification, the more CPM you put, the more people can see the advertisement, and the visibility has greatly improved.

The changes in CPC and CPM of ‘Books And Reference’ since 2020 are shown in the figure. We can clearly see that the changes in CPC are small and the cost is very low. The rate of change of CTR and CPM is large, and the data is also high. This shows that the majority of Books And Reference uses CPM advertising.

Photo & Video is consistent with the situation of ‘Books And Reference’. ‘Photo & Video’ also has a very large audience. When we are watching the news or browsing Facebook, we can see a lot of pictures and videos. The big advantage of pictures and videos is that they are simple and clear, and have a very strong spread. Therefore, ‘Photo & Video’ uses CPM to set prices without any problems.

From the CPC and CPM trends of ‘Photo & Video’ in 2020, it can be seen that CPC is low and very stable, and CTR and CPM have large fluctuations and instability. This trend is consistent with ‘Books And Reference’. The overall trend will remain the same in the next six months. CPC stays between $0.1 and $1.0, and CPM is higher. Advertisements that place advertisements related to ‘Photo & Video’ mainly pay attention to the changes of this curve at all times, make good use of the opportunity, and do the best CPM budget delivery.

Detailed analysis of CPC analysis

What is CPC?

CPC means “cost-per-click”, and publishers can earn revenue from each click of a user. Therefore, there is no advertising cost that the user views but does not click. Advertisers pay a fee of $10, then there will be 1,000 clicks.

What type of advertising is suitable for CPC pricing?

In the case of a limited budget, this bidding model is relatively safe. Some people incur costs only after clicking on an ad, and they will choose CPC. CPC pays more attention to the effect of advertising.

When it comes to the effect of advertising conversion rate, the first thing to bear is the game. The purpose of game advertising is to increase the registration rate of the game and increase the number of game users. Therefore, the pricing method of CPC is a very common form of game.

The changes in CPC and CPM of the game since 2020 should be clearly distinguished from ‘Photo & Video’ and ‘Books And Reference’. In the game, the price of CPC is higher than the two industries mentioned above, and there is a small peak, the value of CTR is also low, and the future trend cannot be estimated.

The purpose of shopping type advertising is to let customers buy goods, so CPC’s pricing method is also more appropriate. However, shopping-type advertising can be invested in stages. In the first stage, in order to expand the influence of commodities, CPM pricing is used to increase visibility, and in the second stage of marketing, CPC is used to focus on product conversion rates, thereby increasing revenue.

The CPC and CPM of shopping advertisements are relatively flat in 2020, and there are no major changes. This situation is affected by the epidemic factors, but the overall situation is still relatively normal. The CTR is generally lower than 0.5%, and the advertising pattern of commodity ads will not change in a short time.

CPC VS CPM

  Suitable ad types Ad type features
CPM Books And Reference、Photo & Video、
News And Magazines、Entertainment…
CTR is high and unstable, the purpose of advertising
is to increase exposure and visibility, and it is mostly
used for events or new product promotion
CPC Business、Game、Shopping、Food &
Drink…
The CTR is low and stable, and the purpose of advertising
is to increase the conversion rate, and it is mostly used for
product promotion with insufficient funds.

  advantage disadvantage
CPM Wide coverage area and more obvious
benefits
The cost loss rate is high, and there will be a large number
of advertisements that no one reads and pay for this.
CPC Low cost, strong stability, ensure that
every time there is a click return
There may be a lot of time wasted due to advertising quality
issues without getting clicks.

As we have seen, CPC and CPM pricing models have their advantages and disadvantages in different situations. We have listed the relevant advertising types and their advertising characteristics. I hope these can help your advertising. But don’t forget that the data is constantly changing, and the laws are not static. We should always pay attention to the changes in CPC and CPM data in the industry, and use ADCostly to make timely advertising planning adjustments.

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In short, the content of the advertisement is the core. From the selection of materials, writing to editing, every detail cannot be ignored. Then, with different bidding modes, it is the king of good advertising!