There are so many online advertising acronyms and terms out there, it can be hard to keep them all straight. Which is why I created this easy go-to guide explaining the pros, cons & differences between the many kinds of paid search advertising. Hopefully this will help you determine which type of online search advertising is best for you and your marketing goals.
PAY PER REACH
I. CPI/CPM: Cost per impression or per thousand impressions
Overview: Pay for the number of times your ad is viewed, regardless of whether it’s clicked
Best for: Bigger budgets looking for large audience, improving brand recognition
Pros: High exposure rate, re-target visitors who did not convert, choose where to advertise
Cons: flat rate paid up front, higher % wasted impressions
PAY PER CLICK
I. Traditional PPC: Pay per click
Overview: Pay for the number of times someone clicks on your ad.
Best for: Increasing traffic
Pros: Greatest potential audience, drives lots of traffic
Cons: Generally text only
- Google AdWords: best for volume, traffic quality & user interface; most expensive.
- Yahoo search marketing
- MSN Adcenter
II. Display or Banner ads
Overview: Pay for clicks on your image ad
Best for: CPA, CPL & CPM ads
Pros: Reach a larger group than simple paid search, branding benefit of being associated with industry websites, ability to remove poorly performing websites from network
Cons: Tend to be more expensive, limited to publishers ad space
- Google Display Network: smart pricing feature lowers cost for sites that are less likely to convert
- Adbrite.com: similar to Adwords, offers text, banner & full page ad formats, CPC & CMP pricing
III. Animated, Pop-up & Interstitial ads
Overivew: Pay when a user clicks on your ad (appears on a website either on a timer, roll over or between pages.)
Best for: Surveys, mailing list sign up
Pros: Highest visibility
Cons: Least click through rate, easily aggravates consumers & may cause brand negativity
PAY PER ACTION
I. CPA: Cost per acquisition
Best for: direct response, increasing sales/conversions, driving online transactions, acquiring leads
Pros: you decide the action, more contact info required, more cost effective than CPC, ads will generally run in more places for longer, free ad impressions, results-based advertising w/o risk, predictable ROI.
Cons: No control over where your ad is placed- publishers pick from offers, low volume traffic
- Google Affiliate Network
- W4: offers assistance with ad creative & landing page development
II. CPL: Cost per lead
Overview: You pay when a visitor clicks on your ad and submits their contact information on your site
Best for: engaging w/ consumers @ multiple touch points – by building a newsletter lets, community site, rewards or member acquisition program.
Pros: Choose where your ads are placed, high volume
Cons: Only basic info required; could be just email address.
- Contextually relevant publishers
III. CPE: Cost per engagement
Overview: Only pay when a user engages with your ad unit (appears as a standard display, showing full content on mouse over)
Best for: Watching a video, playing a game, downloading content, polls/surveys, product tour, social media marketing
Pros: free exposure if ads are not engaged, allows for higher quality ads with lower risk ROI, flat rate per engagement
Cons: Low volume
- Hydra Media
IV. CPS: Cost per Sale
Overview: Share a percentage of sale revenue to referee if referral completes sale upon visit
Best for: E-commerce sites
Pros: Low risk ROI
Cons: Variable pricing- difficult to budget
- Contextually relevant publishers
Did I miss any? Feel free to comment and/or share other types of paid search ads I may have missed.