The SEOniverse

What is CPA, CPC and CPM?

CPA

CPA can either stand for cost per action, or cost per acquisition. Both terms are related to online advertising.

Cost per action

Cost per action (CPA) is an online advertising pricing model where the advertiser pays whenever a specific action is taken. The action could be anything from a click, a download or a newsletter signup. CPA is a favoured model as the advertiser doesn't have to pay unless they get a desired result.

Cost per acquisition

CPA might also stand for Cost per acquisition. This is the average cost for customers acquired during a campaign. For example, if an online advertising campaign for a new online racing game costs £10,000 and results in 2,000 new users, the Cost per acquisition would be £10,000/2,000 = £5. That's a cost of £5 for every new customer.

CPC

CPC stands for cost per click. It's the cost incurred for a click-through from an online advertisement to the advertiser's landing page. This normally refers to ads placed on another website or in the search results through Google AdWords or Microsoft adCenter, or an ad placed on an affiliate website. Cost per click is often used interchangably with pay per click (PPC).

CPM

Funnily enough, CPM stand for cost per thousand. Again, it's an online advertising mechanism where the advertiser pays per thousand impressions of their advert. With a CPM model, advertisers should be confident they can get a high conversion off the back of the advertisement placed.

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