Cost Per Impression Advertising

Don’t know what cost per impression advertising is? After reading this article, you will know exactly what it is about.

If you have been around in the early days of the internet, before the first dot-com bubble bursted, then you can still remember the “banner advertising days”.

Back then, there was a lot of “stupid money” being thrown at every dotcom company. Lots of startups without any kind of business model got funded, lots of dotcom millionaires were made.

A couple of months later, that all went bust, and all these people lost their fresh fortunes.

But while the heat was still on, everyone who had a website could charge for banner advertising.

It basically worked like this: you had a website, and you could offer banner space. And then, companies (often times big, stupid companies) would buy advertising space and pay you on a per impression basis. That means: each time somebody visited your site and the companies banner showed up, you got paid a certain amount.

That is what is called “cost per impression” (CPI): instead of being paid per click, you get paid for each time an ad gets displayed to a visitor.

Now, many people think that PPC (pay per click) marketing is superior to paying per impression. But sometimes cost per impression advertising can be a lot cheaper. You might pay 70 cent for a click on a banner ad, but you might pay $10 for 1000 impressions.  If you have a 10% CTR (click-through-rate), then that means that you get 100 clicks for $10.  100 clicks for $10 means that you pay 10 cent per click, so instead of getting one click, you can now get 7 clicks for 70 cent.

I know this sounds like small numbers, but when it comes to PPC and CPI marketing, then it’s all about those small numbers. CPM stands for cost per thousand impressions, be sure to get that straight. Sometimes people think it’s cost per million impressions, because of the M, but the M stands for the latin or greek word for thousand. (You can tell how well I paid attention in school, right? Ancient Greek, Latin, what’s the difference?)

If a website owner has a CPM of $10, then his cost per impression is 1 cent. Because 1000 clicks cost $10, so 100 clicks cost $1, so 10 clicks cost $0.10 so 1 click costs $0.01.

While CPI marketing can be a real goldmine if you know how to do it right, it can also be an even faster way to burn money than PPC. Because you need high click through rates, and you need to make sure that the clicks you get convert into money, otherwise you might get lots of clicks, but little money.

What many people don’t know is that you can actually do cost per per impression advertising with Google AdWords. When you set up a new campaign, go into your campaign settings and switch to pay per impression.

When you pay per impression, the whole quality score issue just evaporates. Google doesn’t care about your quality score with CPI advertising, because they now get paid per click, and whether you get a lot of clicks or no clicks doesn’t concern them. The only thing is that you should stay away from deceptive tactics to get website visitors to click on your banners.