The meaning of the advertising terms CPC, CPM, and CPA are not clear to all. These are the initials of ad campaigns and understanding them can benefit influencers and various businesses. In this blog post, we will explain the meaning of each term and how they benefit the advertising brands and the influencers.
Social media has made advertising accessible for single self-employed and small businesses as well as leading brands. Influencers, as we know, are an excellent channel for advertisers to reach targeted audiences. They know how to reach their audience with valuable content. Advertising brands seeking to reach those audiences can help influencers monetize their content.
For instance, live-streaming video influencers can promote services and products by utilizing the streaming platform and their talent to convey the advertising message. Although it has created new campaigning and income channels, people who are not professional marketers may need guidance with the terminology related to the campaigns.
Generally speaking, there are two types of campaigns:
- Raising Awareness – the related ad campaigns are meant to reach as many people as possible without needing any action from them. The CPM’s goal is to raise awareness.
- Call-to-Action – this ad campaign’s goal will encourage an audience to act, whether to click a link or purchase a product or service. The CPC and CPA ad campaigns are typically a call-to-action type.
The CPM Campaign
The CPM–cost per mille is also known as the cost per impression, initially for a thousand ad viewers. It is an ad campaign type that does not demand any action from the audience. Instead, it aims to reach a mass audience.
In fact, advertisers seek to spread the word about their brand to as many people as possible. This type of campaign aims to create brand awareness. As a result, the advertiser will not know if the CPM campaign created an incentive to purchase for the audience.
A successful CPM campaign for an advertiser aims to reach as many people as possible and get as many impressions at the lowest possible cost.
The advertiser’s interest: The most accessible and affordable way to promote brand awareness. Advertising brands who wish to reach as many people as possible will run this campaign.
Goal: A good outcome for the advertiser is actually reaching the lowest–paying the lowest possible price for the highest possible number of impressions.
The influencer’s Interest: Influencers earn money for the brand product or ad display. This type of campaign doesn’t require any audience action. For example, If an influencer has a CPM ad campaign for lollipops. The influencer earns for displaying the advert and recommending the brand, regardless if a viewer heads out to buy those lollipops.
Goal: Present the campaign to the most significant number of viewers possible, as the number of impressions can increase the compensation. Additionally, a good result will help secure future campaigns.
The CPC Campaign
The CPC is short for Cost Per Click. The advertisers and influencers share the same goal of getting viewers to act. The goal is to persuade a targeted audience to click a banner or a link.
Indeed, the CPC is the financial representation of the PPC, a pay-per-click campaign that focuses on directing the audience to a website or a landing page for further engagement. Whoever acted is referred to as a lead.
The advertiser’s interest: Running a PPC campaign brings leads to the advertising brand, which can build a long-lasting relationship and turn that lead into a customer. Advertising brands can gain high-quality leads if they execute a PPC campaign on a live stream video, as it almost totally eliminates the risk of bots clicking the ad.
Goal: To reach out to new audiences and turn them into leads–potential customers.
The influencer’s Interest: Whether you are a micro-influencer or a famous influencer, the conversion rate–the audience percentage that has clicked the ad–will determine a successful campaign. Micro-influencers are better executors of CPC campaigns as they enjoy 60% higher engagement rates than popular influencers.
Goal: Encourage the audience to click through a link. More clicks increase the influencer’s income.
The CPA Campaign
The CPA, the cost per acquisition campaign, is similar to the CPC, as the audience must act. The CPA is also called cost per action. Therefore, the goal is to persuade the targeted audience to perform an action like making an online purchase or downloading an app.
The advertiser’s interest: A CPA ad campaign should practically direct the audience to download the advertiser’s app or purchase their product. In other words, the CPA should bring paying customers almost immediately.
Goal: Reach the right targeted audience and turn them into active customers.
The influencer’s Interest: Every purchase or app download the influencer generates from the campaign will pay off. The CPA advertising campaign is valuable for micro-influencers as a study shows that their conversion rates are 20% higher than macro influencers.
Goal: Encourage the audience to act and make a purchase or download. Every single action will result in an income increase.
A Successful Advertising campaign
It takes two to tango in order to ensure a successful campaign. An advertising brand has to segment the targeted audience, the right platform, and influencers carefully according to the desired goals.
The influencers should certainly choose a campaign that fits their values and feels comfortable recommending. Additionally, the influencer must understand each ad campaign’s goal to generate the right message for their audience. Further, understanding the type of campaign can be useful as the influencers can plan a focused message to their audience. It will bring good value to the audience and the influencers will be able to earn a higher income.
At the end of the day, advertisers, brands, and influencers share goals in common. They all want to increase their audience and offer the best possible value.