The three main methods of advertising pricing:
1. CPM (Cost Per Thousand Views)
This is the most traditional pricing model where you get paid a set price per 1000 impressions of an ad. For example if the CPM is £4 you would get paid £4 for every thousand impressions of the ad. This type of pricing model is only suitable for high traffic websites.
2. CPC (Cost Per Click)
This is now one of the most popular pay for performance models as the advertiser only pays for clicks they receive from the ad. For example if the cost per click was £2 and the advertiser had ten clicks the cost to advertiser would be £20 The amount the website owner would get depends on the ad network they are using.
3. CPA (Cost Per Action)
CPA refers to either pay per lead or pay per sale. This option can be good for both website owner and advertiser. CPA cost will be higher than CPC as the visitor has to perform a set action such as newsletter signup or complete enquiry form, or purchase.
The placement of your ads can make a massive difference to how much revenue they produce. You do not want to overload your website with ads which will detract from the user experience, but want to get the best return on your traffic.
One of the leading systems to help you get the most from your traffic is Ezoic which allows you to maximise your website’s revenue without negatively affecting your users. The system offers a multivariate testing platform that automatically improves a site’s layout based on user actions on desktop, tablet and mobile.
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They quote a typical revenue increase of between 50-250%.