Cost-per-click (CPC) and cost-per-impression (CPM) are two different methods used for bidding in online advertising campaigns. They fundamentally differ in what you’re paying for and how they measure the success of a campaign.

Cost-Per-Click (CPC)

In a CPC bidding model, you only pay when someone actually clicks on your advertisement. This means that you could potentially have your ad displayed to hundreds or thousands of people, but if no one clicks on it, you won’t have to pay anything. The success of a CPC campaign is usually measured in terms of the number of clicks received. This model is often used when the primary goal is to drive traffic to a website or a specific web page.

Cost-Per-Impression (CPM)

In a CPM (Cost per Mille) bidding model, you pay for every 1,000 impressions your ad receives, regardless of whether anyone clicks on the ad or not. An “impression” is counted each time your ad is shown. The success of a CPM campaign is typically measured in terms of how many people saw the ad. This model is often used when the primary goal is brand awareness or visibility.

The main differences between CPC (cost-per-click) and CPM (cost-per-impression) bidding are:

• CPC billing charges advertisers based on the number of clicks their ads receive, while CPM billing charges based on impressions (views).
• CPC aims to get clicks and site visits, while CPM aims to increase brand awareness and reach.
• CPC bidding is better for search ads and ads that promote products/services, as clicks directly relate to conversions. CPM bidding is better for branding campaigns.
• CPC bidding gives the advertiser more control over spending, as they only pay when someone clicks. CPM bidding costs are determined by the publisher’s ad rates.
• CPC bidding costs tend to be lower than CPM, but risk lower brand visibility. CPM guarantees impressions, but can be more expensive.
• With CPC the exact cost per click is not known upfront. With CPM the impression cost is fixed.

In short, CPC billing is best for performance marketers driving conversions, while CPM billing fits brand awareness campaigns. Marketers should consider their goals and target CPM or CPC based on the desired campaign outcome.