Pay per Click (PPC) vs. Pay per Impressions (PPM): Which One Is Best For Digital Ads?

Arcalea - PPC v. PPM

The Rise Of Paid Advertising

The Internet has become a busy and noisy place, and standing out from the crowd has become a challenge. One way marketers navigate this is through online advertising, sometimes called paid advertising.

Paid ads are attractive for a few reasons. The most obvious one is that they target audiences that are most likely to buy a certain product. Hubspot reports that 64.6% of people who click on Google ads are already looking to make a purchase.

Search engines and social networks have also made online ads more attractive because it offers businesses a chance to rise to the top (maximum visibility) without having to go through all the work of reaching that spot. And as results pages and social feeds favor organic content over promotional content, paid advertising will only become more important.

PPC and PPM are two of the most popular advertising metrics, but there is still confusion among marketers. What is PPC? How is it different from PPM?

We’ll break down the definitions in terms anyone can understand, and suggest the best option for one’s business.

What is PPC?

Under the Pay per Click ad model, marketers only pay for the ad when someone clicks on it.

For example, if 100 people saw an ad, but only 10 clicked on it, the marketer would only pay for those 10 clicks.

This is best for brands or advertisers who only want to pay for ads that actually lead to page or website visits. Advertisers set the ad budget, time, and placement, and then bid for a specific search term.

The more popular the keywords, the more expensive the cost per click (sometimes referred to by search marketers as CPC). That’s why it’s important to research the best keywords to get the most out of a budget.

To learn more about how Pay per Click works, check out our previous blog post on the topic.

What is PPM?

PPM pay for every 1,000 impressions of the ad, regardless of whether they clicked or not.

This is similar to more traditional ads, such as print ads and billboards, and is geared towards visibility and brand awareness.

Even if the ad is not clicked on, it is still displayed. With strong ad copy and landing pages, even a click through rate (the percentage of people that click on the ads, out of the people that view it) of 2% equals 20 clicks to the link. Some advertisers prefer PPM because it is generally cheaper compared to PPC.

Which One Should You Use?

Understanding the difference between PPC and CPM is the first step in creating a digital ad strategy. The next step is evaluating which metrics or considerations are most important to the brand. These include:

Ad Budget. How much is the business willing to spend on advertising?

Campaign Objective. Is the goal to raise awareness, or generate traffic and sales?

Brand Familiarity. Is the business well-known, or in the early phases of marketing?

Channel. Will the ad be on search engines like Google and Bing? Or on social media networks like Facebook and Twitter?

PPC is best for companies that want to focus on conversions: either through sales or member sign-ups. PPC ensures you only pay for each person that clicks to your website, so this method is most effective for people who need genuine engagement and want to track clicks.

PPM is best for brands with a limited budget and a small audience, such as startups or new business ventures. You pay for every 1000 views, so you can have your ad run and not pay until you hit a certain amount of views. You’re not concerned about generating a certain action, just views.

Managing An Ad Campaign

The best way to find out which is right for you is to revisit your own business’s goals. Is it to increase the number of people who sign up for a newsletter? Is it to sell a new product? Or maybe just bring awareness to a sale you’re having?

Once you know what it is you want to track, then you should run a small experiment. Start with one ad, with simple copy that reflects your brand, and a low bid amount. Analyze the results, and determine from there whether you want to continue.

For SMBs or niche industries, Arcalea specializes in managing paid ad campaigns for your business. Contact us today to find out how your business can utilize online advertising.

Also, be sure to read our previous post: 5 Ways Your Business Can Benefit From PPC.