In digital marketing, we sometimes come across several terms and acronyms that can be difficult to understand at first, but which are essential for the successful execution of a marketing strategy. In this sense, understanding what CPA, CPC, and CPM are, for example, makes your digital marketing actions much more assertive, as well as allows you to target your ads to the right people. So, if you want to achieve success in your digital business, you need to know these metrics right away. In this way, we have prepared this complete article for you to understand what CPA, CPC, and CPM are and learn how to use them. Keep reading!
What are marketing metrics in digital business?
Metrics are one of Marketing’s fields of study that collects data in order to measure and analyze the results of its actions. In the case of digital marketing, these metrics measure your activity and performance in the online environment.
Therefore, through marketing metrics, you can direct the progress of your strategies in order to achieve your goals.
After all, your processes and decisions will be based on data obtained through the analysis and measurement of your performance in various digital channels.
In this sense, CPA, CPC, and CPM are metrics related to investments in your paid media campaigns.
What is CPA: Cost Per Acquisition?
Every ad campaign needs an objective, as it will be decisive for the good performance of your campaigns.
So, CPA, Cost Per Acquisition, means that you will pay for the ad only when your goals are met, which can be:
- Sale of the product or service;
- Download an e-book;
- Form filling;
- Video viewing;
- Among others…
Therefore, this metric is usually more expensive than the others, because it is through it that conversions will occur. In this way, its value can reach up to 50% of the sale value. However, you only pay if you receive profit from this action.
What is CPC: Cost Per Click?
CPC, in turn, stands for Cost Per Click. That is, it consists of the amount you will pay for each user who clicks on your ad.
This type of metric is often used in Google Adwords when buying keywords, although other platforms have already adhered to this metric.
On these platforms, you can find an interesting feature, which consists of stipulating a click target. Thus, you calculate your campaign expenses in advance and avoid losses.
Cost Per Click also has the advantage of helping you understand the behavior of people who are interested in your ads, as you will have access to the exact number of users who click on your ad.
To have good results and prevent your CPC from getting too high, it is essential to create an attractive landing page that encourages user conversion.
When your ad goes live, it becomes available to countless people. Soon, there will be those who will be interested in your ads, while others will ignore them.
CPM, Cost per Thousand, is responsible for calculating what you will pay for every 1000 user views on your ad.
This metric is often used by major news sites, for example, since CPM is considered interesting for those who want to increase traffic to their site.
What is the best metric for your strategy in digital busines?
Now that you know what CPA, CPC, and CPM are, you need to choose which metric is best for your strategy. And your choice needs to be based on a few factors, such as:
- Your objective with the campaign;
- Business niche ;
- Your target audience ;
- Budget (amount available for investment);
- Among others.
Because it is more expensive, CPA requires a higher investment value. Therefore, this metric is a good option for niche businesses, since the number of advertisers is smaller.
So, you have to work harder to get a bigger income.
It should also be mentioned that CPA is often used in affiliate programs and networks.
Now, if your goal is to drive more traffic to your website or blog and increase your sales in certain periods, CPC might be the best choice.
After all, when measuring your clicks, you will understand the acceptance of your audience, in addition to being easier to calculate your ROI (Return on Investment).
CPM, in turn, is an interesting metric for those businesses that want to focus on branding, brand positioning, or institutional ads. So, if your goal is to increase the reach of people, CPM can be the ideal metric.
Also, you need to consider what amount is available to invest. If you have a more limited budget, it may be interesting to work with the Cost per Click, as there is the possibility of stipulating your average CPC.
On the other hand, if you have a higher amount to invest and the metric aligns with your goal, CPA can be a great strategy.
As we have seen, understanding CPA, CPC, and CPM it is not as complicated as it seems. In addition, these metrics can be decisive in achieving the success you want in your paid traffic strategy.
However, to achieve this success, it is essential that you have an efficient platform to create sales funnels and drive your paid traffic strategy.
Thanks for reading this article by ExtNext, hope you will learn something about CPA, CPC, and CPM.
