Friday, July 4, 2008

Cost-Per-Acquisition (CPA)
Cost-per-acquisition (CPA) is a return on investment model in which return is measured by dividing total click/marketing costs by the number of Conversions achieved. Total acquisition costs ÷ number of conversions = CPA. CPA is also used as a synonym for Cost-Per-Action.

Cost-Per-Action (CPA)
In a cost-per-action advertising revenue system, advertisers are charged a Conversion-based fee, i.e. each time a user buys a product, opens an account, or requests a free trial. CPA is also known as cost-per-acquisition, though the term cost-per-acquisition can be confusing because it also refers to a return on investment model.

Cost-Per-Click (CPC)
Also known as pay-per-click or pay-for-performance, cost-per-click is an advertising revenue system used by search engines and ad networks in which advertising companies pay an agreed amount for each click of their ads. This Click-Through Rate-based payment structure is considered by some advertisers to be more cost-effective than the Cost-Per-Thousand payment structure, but it can at times lead to Click Fraud.

Cost-Per-Thousand (CPM)
Also known as cost-per-impression or CPM for cost-per-mille (mille is the Latin word for thousand), cost-per-thousand is an advertising revenue system used by search engines and ad networks in which advertising companies pay an agreed amount for every 1,000 users who see their ads, regardless of whether a click-through or conversion is achieved. CPM is typically used for Banner Ad sales, while Cost-Per-Click is typically used for text link advertising.

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