The three main types of web page advertising are cost per click (CPC), cost per action (CPA), and cost per mille (CPM). Both CPC and CPA require that someone actually clicks on an advertisement or a link before the advertiser has to pay. Cost per mille, which is also known to as pay per impression (PPI), requires that the advertiser pay a particular rate per 1,000 views. Each of these methods can be associated with contextual text based ads, graphic banners, links within the text, and other types of web page advertising.
Cost per mille is typically the least expensive type of web page advertising, as the act of viewing an ad does not guarantee any positive effect for the advertiser. Impression based advertising such as this can allow the owner of a website to get paid regardless of whether his visitors actually click on any of the ads placed on the site. This can be contrasted with cost per click advertising, where the advertiser only pays when a visitor clicks through to his site from an advertisement. Cost per click is typically higher than cost per mille, though individual campaigns can vary widely.
The most expensive type of web page advertising is typically cost per action, since it is associated with an event that has a positive effect for the advertiser. In some cases, the advertiser will pay only if an actual sale is generated by a visitor that clicked on an ad. These payments are typically very high in comparison to cost per click or cost per mille, since they directly represent a sale that was achieved due to the advertising. Another form is cost per lead (CPL), which involves the advertiser paying a fee when a visitor clicks through an ad and fills out a request for information.
Each of the types of web page advertising can be coupled with a variety of delivery methods. Contextual text ads are typically small, unobtrusive advertisements that are selected based on the content of a page. A similar concept is in-text ads, which are services that can turn words within a webpage into contextually matched links. If a visitor clicks any of the links, the owner of the webpage will typically be paid on a CPC or CPA basis. Banner ads are graphical in nature, will often incorporate various animated elements, and can be associated with CPM or any other compensation method.
