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The low costs of electronic communication reduce the cost of displaying online advertisements compared to offline ads. Online advertising, and in particular social media, provides a low-cost means for advertisers to engage with large established communities. [65] Advertising online offers better returns than in other media. [76]: 1
Cost-per-click (CPC) is calculated by dividing the advertising cost by the number of clicks generated by an advertisement. The basic formula is: Cost-per-click ($) = Advertising cost ($) / Ads clicked (#) There are two primary models for determining pay-per-click: flat-rate and bid-based.
Cost per action (CPA), also sometimes misconstrued in marketing environments as cost per acquisition, is an online advertising measurement and pricing model referring to a specified action, for example, a sale, click, or form submit (e.g., contact request, newsletter sign up, registration, etc.).
Cost per impression, along with pay-per-click (PPC) and cost per order, is used to assess the cost-effectiveness and profitability of online advertising. [1] Cost per impression is the closest online advertising strategy to those offered in other media such as television, radio or print, which sell advertising based on estimated viewership, listenership, or readership.
In online advertising, if a website sells banner ads for a $20 CPM, that means it costs $20 to show the banner on 1000 page views. While the Super Bowl has the highest per-spot ad cost in the United States , it also has the most television viewers annually.
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