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.

 

 

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.

 

 

 

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.

 

 

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.

 

 

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.

10 Responses to “Understanding the adsense related terms”

1. Hamdani Amin on October 27th, 2008 5:36 am

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

2. ArtByLetters on October 27th, 2008 3:08 pm

   Any and all Tips ROCK thanks

3. stanley on October 27th, 2008 3:30 pm

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

4. UtahLuxury.com on October 27th, 2008 3:32 pm

   Always helpful for the beginner. Great job!

5. nasir on October 27th, 2008 11:29 pm

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

6. David on November 1st, 2008 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.

7. Rituraj on November 5th, 2008 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.

8. Sky Xavier on November 6th, 2008 1:05 pm

   @David

   thanx for reminding and sharing CPA fundas with my readers.

   Thank you

9. sharmila siva on November 7th, 2008 3:54 am

   great! my confusion cleared thanks

10. Bachelor Degree on July 31st, 2009 12:18 am

    It will help the beginners in great manner….

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