Pay Per Click or Pay Per Impression: Which Online Ad Strategy is Best for You?

August 7, 2012

Yesterday, we wrote about the 5 simple steps to improving your PPC campaign.

We got a lot of feedback from our clients. Thanks everyone for the great questions and comments! One question that was often asked is, “should I be paying per click or paying per impression?”

So, today we wanted to address this issue.

In our humble opinion, it is much better to pay per click (commonly referred to as PPC) than to pay per impression (referred to as CPM). Even though neither PPC nor CPM can guarantee results or sales there are a few major differences that definitely tip the scales.

A Quick Overview of CPM

• Large number of viewer/impressions
• If ad is placed very selectively it can be profitable
• Costs pennies on the dollar per impression
• Unlikely that your viewers will be ready to buy at that moment
• It’s often intrusive / outbound advertising
• Often not relevant to the user
• Measurements not as accurate because impressions may not be qualified

A Quick Overview of PPC

• Only those who search for related keywords will see your ad
• Viewers are likely seeking services / products related to yours
• Costs $1-2 per click
• Inbound marketing, as it’s incredible relevant to users
• Only qualified leads / prospective buyers visit your site
• Pro-active customers are more likely to ready buy
• Measurements are more accurate than CPM because impressions are qualified

For all these reasons, PPC campaigns will often reap far better returns than CPM campaigns. Though CPM costs less per impression than PPC’s costs per click, it’s less valuable. After all as a business owner you want to make sure you use your marketing budget effectively. So would you rather pay less knowing most people who see it aren’t interested or pay more knowing most people who see it are interested and ready to buy?

There is a caveat, however. CPM can be enormously profitable if you can do market research to find websites, blogs and forums your where your customers are spending their time online. If you can catch lightning in a bottle, you have the chance to drive thousands of qualified leads to your business at a fraction of the cost of your best PPC campaign.

That being said, CPM campaigns are not consistent, whereas PPC campaigns deliver predictable revenue that’s stable. Ultimately, this is why we recommend PPC campaigns. You can better rely on sales day in and day out, which is the formula for a successful business.

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