Display Advertising Payment Models

Unlike traditional advertising, display advertising can drive instant sales and conversions through the internet’s connected nature. This is because the possible customer can easily go from the advert to the merchant.  It’s also highly measurable and trackable so that adverts can be targeted more efficiently and accurately.

Aside from the different types of display adverts, payment models for them also vary. The same goes for how to get them online. Here’s a comprehensive discussion of the payment models for display advertising. 

The Goal of Display Advertising

Whether online or offline, online advertising aims to build brand awareness, create a demand, and satisfy the said demand. The long-term goal for any marketer is to make people aware of their brand. 

If your brand is widely known, that means it can do more business by selling different or more products and services. Once you start understanding how the process works, it’s a continuous process. Since online advertising is visual, building brand awareness can be made possible through imagery and making people familiar with colors, logos, and overall feel.

Of course, online advertising lets the audience know that they want or need their product or service in order to create a demand. This is a three-step process that includes informing, persuading, and reminding. 

Once they know that they want a product, they need to appease their cravings and desires. So it is the advertiser’s job to present the potential customer how their specific brand or product can be beneficial to them. It is crucial to show customers that you can meet their needs. 

Display Advertising and its Payment Models

As an advertiser, it is also your job to know you will pay for ads. It is also important to know about the different varieties of advertisements publishers can offer you. 

This is one of the most important things about planning a campaign. You can resolve a lot of things by means of hiring a marketing company. These companies specialize in serving ads, planning media content and media buying. However, you can also learn how to do all of this by yourself or with your team. 

It is worth noting that the advertiser rarely decides on the payment model to be used. Instead, it is the owner or publisher who gets to have a say, depending on the advertising type, popularity of the site, and other factors.

Keep in mind that CPM is more beneficial to publishers. On the other hand, marketers or and advertisers can get more benefits by using the CPA model. Some people often use a combination of both models. Check out what these acronyms mean below.

Here are the different payment models for display advertising and what they mean.

CPM

CPM or cost per milestone refers to the cost the advertiser needs to pay per thousand impressions. This means that every time an advert hits 1000 loads on the webpage, the advertiser needs to pay the publisher. Usually, this is how a campaign is priced when your goal is brand awareness or exposure.

The rates for CPM depends on the type of file. When using rich media instead of standard media, expect it to be more expensive

CPC

CPC or cost per click means that the advertiser pays when someone clicks the advert. The number of views doesn’t matter in this model. This payment model is also similar to search advertising, even if it is now popular in display advertising too. 

The advert can be priced through CPC if the main goal is to drive traffic and conversion. It is also used in affiliate marketing sometimes. But it’s only used if your goal is to drive more traffic to your brand new website.

CPA

CPA stands for cost per acquisition. This means that the advertiser must pay when an acquisition is delivered. Usually, this happens once an interested party clicks on the advertisement and accomplishes a goal. 

The goal can be anything you want. For instance, you want the ad to sell a product, join a mailing list, and etcetera. 

This payment model is usually the best for advertisers. Advertisers are only required to pay once a customer meets a goal. 

That said, it is not beneficial to the publisher. They are only paid if the advertising is fruitful.

Most of the time, publishers have to depend on the advertiser’s conversion rate. And publishers have no authority on what happens to this. 

This payment model is most frequently used for banner advertising. It’s also more correlated with affiliate marketing. 

This, along with CPC, are the most offered to advertisers by niche websites with a targeted audience. 

CPE

CPE means cost per engagement, and it’s a model where advertisers pay for interactions with adverts. They are normally placed in videos or applications like Facebook. An interaction or engagement starts with a rollover that will expand the ad. 

Then, it may show some interactive content. The advertiser can choose to display a video, a quiz, a form, or a game. It’s also great since the user won’t be redirected to another web page. And it also means that advertisers are only required to pay when a customer completes a specific goal or action.

Displaying Your Ads Online

There are plenty of ways to display your ads online. There are also a varietyl options to choose from when it comes to finding and paying for an ad space. All of these are simple enough, the trick is strategizing on which space your ads will get the most activity.

• Premium booked media. This works in the classic way of booking an ad. Here, the advertiser contacts the premium media provider to discuss options. 
• Advertising exchanges. These are where publishers put unsold advertising space open for bidding. They also call this inventory.
• Advertising networks. This refers to a group of websites where marketers can purchase ad spaces using single sales entities. 
• Social media advertising. Another great way to put your ads out there is through social media. Why not, right? Billions of people go online everyday to get on social media. This is why social media platforms offer advertising spaces for marketers. Most of their revenue comes from ads.
• Mobile Advertising. Some examples include blind networks, premium blind networks, and premium networks. 
• Ad servers. These are servers that simply accumulate ads. This is also where they serve them to web pages.

Targeting and Optimizing

Ad servers can offer advertisers the following: 

• Frequency capping
• Sequencing
• Exclusivity
• Roadblocks

© Image credits to Oleg Magni