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what is CPM, CPC and CPL in digital marketing?

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When it comes to digital marketing, there are different methods to measure the cost of marketing campaigns.

The costs of digital marketing:

Before the technological transition of marketing, it was relatively easy to calculate the costs of a marketing campaign, whether it was an advertisement on a bulletin board, a brochure, an appearance in print media... All these actions had a physical and tangible translation: how much space costs on this page of the newspaper, how much it costs to rent, which made it much easier to calculate their cost. Printing costs, distribution costs, installation costs, the value of the place where the campaign is displayed, etc. were (and are) taken into account. But with the digital transition, it is difficult to calculate how much a banner on a page or an ad on YouTube costs. These are new metrics that had to be studied and specified. Finally, the result of this change has left new values such as CPM, CPC, CPL or CPA, among the most common ones.

Cost Per, this is what all these acronyms have in common. That is, the price of digital marketing is proportional to an action: cost per click, cost per lead. It is not always about the place where it is exposed, but in how many people respond favourably to that strategy.

These are some of the most commonly used costs to value and define the price of a digital marketing campaign:

  • CPM: Cost Per Thousand Impressions

what is an impression? This term is a legacy of traditional marketing that has been maintained in the digital era, redefined. Originally, it refers to the cost for each time a copy of an advertisement was printed. In this way, the final cost was calculated according to and depending on how many impressions were made. Usually, the price per impression was reduced the more impressions were contracted.

Nowadays, this idea has been transferred to a new concept: how much this ad costs each time a potential customer views it. This type of accounting is used, above all, in display advertising. This is the type of advertising in which advertisements of a brand are placed on pages other than its own. Usually banners are used for this and a display network of the page or company that acts as an intermediary and connects the page that places the banner and the company that pays for the ad. One of the ways of measuring the price of the banner is to pay for each person who views this ad, which is known as Cost Per Impressions.

Thus, the Cost Per Thousand Impressions consists of establishing a price for each thousand times the advert is viewed. This metric is inevitably closely related to the ROI or Return On Investment (Return Of Investment). It is a way of assessing the return or response that the campaign has had.

  • CPC: Cost Per Click

In line with the above, the CPC is the cost that is established not for each display of the ad, but for each time a person clicks on the banner that leads to the source page. This is a risk assumed by the page that hosts a banner: the customer leaves your page to be redirected to another one.

This is possible, at the same time, because the banners include a link in themselves that transports the customer to the original page, namely the so-called landing page .

Although it may have been understood, it is useful to point out that in this type of campaign you only pay if the customer clicks on the ad, but you do not pay if the customer only views the ad. It may seem that this type of advertising is cheaper than CPI, but this is not the case, as the benefit and quality of the customer who moves to your page is greater than one who only views the ad. In other words, more people will see the ad, but the ROI of viewing is lower than that of clicking on the banner, so the CPC price is higher .

CPL: Cost per Lead

Finally we find the Cost per Lead, which consists of paying every time the company gets a Lead. A Lead is a user who, in some way, provides the company with some of his data: his name, his postcode, his telephone number, his email... This information, so valuable for the company, is usually given in exchange for something: an offer, a free download...

As it is an even more precious figure than that of someone who accesses your page, the CPL is more expensive than the CPC and, therefore, more expensive than the CPI. But, as you will have understood, the benefit of getting a Lead is greater than that of gaining traffic on the web, although this is also very precious as it increases the position of the page in terms of SEO positioning.

The CPL is profitable in that, in addition to getting Leads, you get free ad views and, in addition, a click to the page.

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