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Understanding the adsense related terms

As I was suffering some years back some of the new users and some of my readers are suffering for the same thing. What is that?

What is the meaning of the terms like CPM, CPC, CPA, eCPM, eCPC, eCPA and CTR?

So today I have decided to explain you main terms so that you get better idea for google adsense.

Following are the terms which are most used in the online advertising networks.

What is CPM?

CPM - Cost Per Thousand (Here “M” is the roman numeral for thousand)

This is the thing where advertiser wish to pay for per thousand impression of his ads. Let say advertiser wants to pay $100 for 1 CPM for an ad, this means that he will pay $0.10 for each time his ad is shown on any publisher. When the ad is shown thousand times, advertiser pays $100 to the ad agency.

What is eCPM?

eCPM - Effective Cost Per Thousand

This means what will be the publisher’s payout if the entire inventory it has is CPM. They use the eCPM value for inventory’s effectiveness.

What is CPC?

CPC - Cost Per Click

There are some advertisers who prefer to pay only when their ad is clicked by some reader on the publisher’s site. Usually they pay in the range of $0.40 to $5.00 for one click.

What is eCPC?

eCPC - Effective Cost Per Click

Same as the eCPM, This means what will be the publisher’s payout if the entire inventory it has is CPC.

What is CTR?

CTR - Click Through Rate

This value will show that what is the actual click through rate for an ad after each 100 impressions.

Please correct me if I am wrong somewhere. Also share with me this kind of terms as this is really helpful to my readers.

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27 October, 2008 (03:28) | Blogging, Google Adsense, Traffic Generation | By: Sky Xavier

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Comments

Comment from Hamdani Amin
Time October 27, 2008 at 5:36 am

A very good cheat sheet of web advertising terminology. I’ll bookmark this website so I can always refer back easily.

Comment from ArtByLetters
Time October 27, 2008 at 3:08 pm

Any and all Tips ROCK thanks

Comment from stanley
Time October 27, 2008 at 3:30 pm

Thanks for posting this. All teh adsense terms confuse the hell out of me!

Comment from UtahLuxury.com
Time October 27, 2008 at 3:32 pm

Always helpful for the beginner. Great job!

Comment from nasir
Time October 27, 2008 at 11:29 pm

yes..everybody is selling….saturated…freezing and most commonly is wasting effort and money..

Comment from David
Time November 1, 2008 at 4:51 am

You forgot the CPA (cost per action/acquisition) - I had always wondered what these accountants were doing getting involved in ppc This is the most difficult to define as it is probably the best advertising model to date (and still evolving). CPA is basically the cost associated with each lead created from a click of an advertisement. But do some searches, there is a lot more to it that.

Comment from Rituraj
Time November 5, 2008 at 10:24 am

Hi.. very important information has been posted here regarding adsense. The terms sounds very odd for the first time you know them. I too never bothered much about it but now its clear. Thanks for sharing such useful information.