How advertisement network works
Today we will discuss about the cost per impression or CPM Advertisement Networks. But before that let us understand what is CPM and how it works.
CPM or in other words Cost Per Thousand where M implies the roman numeral of thousand. This method is the most used method for Ads price calculation. Here is an example to make it clearer. $1 CPM means by the advertiser is the amount to be charged per thousand impressions for that ad in a website. The impression does not guarantee the clicks but the views.
CPC or Cost Per Click, the name suggests the cost of an advertisement per click. Similarly if CPC is $1 means, $1 will be paid to the advertiser per click whose site is publishing the advertisement.
CTR or Click Through Rate also indicates the cost of advertisement. But here this talks more about the efficiency. Here it implies the percentage of clicks per impression and it is calculated through the collected data for CPM and CPC. So it states the percentage of clicks or the efficient clicks happens with respect to the number of impressions.
CPA or Cost Per Action indicates cost paid to the publisher based on the engagement of the advertisement. This is basically obtaining the conversion that is paid because of the advertisement that user finds useful through your website.
What we have discussed above is how it can be measured from the publisher’s view point but it also applies the similar idea from the advertiser’s view point also. Only difference is what has been agreed with the number and how the payment will be happened. But more or less this is followed across in the field of website advertisement.