Internet Marketing Short Forms Defined: PPC, CPC, CPA, PPV
When you start trying to make money online you quickly find yourself faced with a wide variety of acronyms which you may not fully understand. To make things more difficult, most of these are used for both earning money online and spending money online with advertising.
This is not an all inclusive comprehensive guide that covers every unfamiliar term you may come across, but it does cover the most common ones.
PPC = Pay Per Click. Pay per click is used when you’re spending money on advertising, and when you’re making money by selling advertising on your own website. Pay Per Click is as it sounds: a specific amount of money is either paid or earned for each click a given advertisement gets.
CPA = Cost Per Action. This term is also used for advertising products, and for earning money online. Cost Per Action means that a set sum of money will be earned or paid when a specific action is taken. The action could be a sale, but more often than not it is a lead based action instead. A prospect fills out their mailing address to request an information packet or trial product for instance, or they fill in their email address to subscribe to a newsletter. No sale is made in these cases but the desired action was taken, thus the advertiser pays money for that completed action and the person who generated the action earns income for it.
PPV = Pay Per View. Pay Per View is a type of advertising that requires nothing more than an advertisement being viewed. No clicks have to happen, and no sales have to be made. As long as the advertisement is displayed, the advertiser pays for it and the person generating the views earns money from it.
CPM = Cost Per Million. This is actually a hold over from the print world and it’s not quite as it sounds. It actually means “Cost Per Thousand”. An advertiser who pays $1 CPM will pay $1 for every 1000 views of their advertisement. People who have websites which receive a lot of traffic enjoy this way of making money online, because they don’t have to get their visitors to click an ad or buy anything. They simply keep bringing traffic to their sites and they’re paid a set amount of money for every 1000 times ads are displayed.
CPC = Cost Per Click. Cost per click is also fairly self explanitory. And advertiser will pay a given amount of money each time their advertisement is clicked, and thus the online business owner who displays ads on a CPC basis will earn money each time an ad is clicked. This is currently the most common way to earn money online with advertising, and the biggest CPC network is Google.
CTR = Click Through Ratio. A click through ratio doesn’t actually earn you money, but it does allow you to guage how effective the advertising on your website is. CTR essentially tells you what percentage of people who saw an ad actually clicked on that ad. So if you display an ad to 100 people, and one of those people click the ad, you have a 1% CTR.
This is a handy number to know for both advertisers and people making money displaying those ads. A low CTR can indicate that the ad is not interesting to the people who are seeing it, or it’s not placed well on a given website. By making small changes you can improve your CTR, and thus increase the amount of money you’re earning from the ad.
ROI = Return On Investment. ROI is another excellent number to keep track of. Whether you are paying for advertisements or you are running an online business which you want to make money from, knowing your return on investments can help you increase the success you have much faster.
ROI is easy to figure out when you’re spending cold hard cash for advertising. If you spend $100 on an advertisement and only generate $50 in sales, you have a negative ROI. If on the other hand, you generate $200 in sales then you’ve gotten a 100% return. You’ve covered the cost of your ad plus you’ve generated an additional $100 in profits.
ROI is an important metric to track even when you’re not paying for advertising costs though. Even if all you’re doing is writing content on a website which is designed to help you make extra money, you need to know whether the work you’re doing is effective or not.
For example, if you spend 10 hours working on a website and you only make $10 total in a year from that work, then your ROI is quite low: $1 per hour. If however, you earn $1000 in a year from that 10 hours of work, then the ROI is $100 per hour. Once you know the return you’ve gotten, you are more likely to choose to repeat the process that made you $100 per hour and stop doing the one which only made $1 per hour.
These are some of the most commonly used acronyms or short forms, at least it gives you a start.