4 ms·
That's not how this model works. There are three general models of online advertising: - CPM: you pay per impression (ie how often the ad is seen) - CPC: cost
by cletus 8y ago
That's not how this model works. There are three general models of online advertising:
- CPM: you pay per impression (ie how often the ad is seen)
- CPC: cost per click. You only pay when the user clicks.
- CPA: you only pay when the user clicks and does something (eg buys something)
Display advertising (putting ads on third-party websites eg AdSense) is primarily CPM. Search advertising is primarily CPC (or at least this is how Google operates; I assume DDG is similar).
It's important to understand the implications of this.
In a CPC model the system that selects what ads to show you is doing so to maximize revenue. Since they only make revenue when you click a lot of effort is spent in determining the predicted CTR (click through rate) because:
Revenue = # of impressions x pCTR
So it's not just a question of who pays the most for an ad (that's how display advertising works largely) because a $1 CPC with 1% CTR earns more revenue than a $10 CPC with 0.01% CTR.
This is why I have less problem with the CPC search advertising model than pretty much any other model because your interests and the interests of the search engine are largely aligned. You want the results that are most relevant to you and that might be an organic search result or an ad. As long as the ads are clearly display as such, it's fine.
Also with search there is intent. You've searched for something so there's something you want. Who's to say an ad won't be the most relevant result?
- stephengillie 8y agoCPM should be updated to CPK. The M in CPM is the Roman numeral for 1000. It's an archaic term, and should be replaced with the SI unit for 1000. Though coining the phrase "kilo-impression" would be a stretch.
- sanderjd 8y agoI read it as "cost per Mpression".
- stephengillie 8y agoI did too, during Marketing 101 in college. And this illustrates the need to update the term.
- cletus 8y agoTechnically the M in CPM is "Mille", the French word for thousand. The origin of the term is from traditional print publishing.
- efdee 8y ago100 per cent correct.
- robin_reala 8y agoYou missed out the other model of cost per slot, e.g. Daring Fireball’s ad, various podcasts, etc. While you’re paying for visibility it’s not a direct CPM as there’s a fixed cost for the time.
- paulcole 8y agoLots of big podcasts are going CPM and inserting ads into each download.
- bowlich 8y agoIt seems that what you are describing though would tend over time to result in a search engine that is principally geared towards returning commercial results rather than amateur/hobbyist results since the interests of search/potential advertisers are always going to be in closer alignment then hobbyists who will almost never be running an ad campaign. This has been my main criticism of Google's direction the last 15 years or so. Seems like search results use to populate handsomely with personal sites and blogs run by hobbyists uninterested in extracting a dollar from the visitor. If the search results could return either (a) a link to a book sold on Amazon or (b) some Phd's site discussing the topic it seems likely that (a) wins and (b) gets buried somewhere on page 2.