What differentiates CPC from CPM in advertising?

CPC, or Cost Per Click, and CPM, or Cost Per Mille (thousand impressions), are two distinct pricing models used in digital advertising. The primary differentiation is in how advertisers are charged for engagements with their ads.

CPC is calculated based on the number of clicks an ad receives. This means that advertisers only pay when a user actually clicks on their advertisement, which directs traffic to their website or landing page. This model is particularly advantageous for campaigns aimed at driving specific actions or conversions, as it allows advertisers to allocate budget directly to engagements that show a quantifiable interest from users.

On the other hand, CPM measures the cost based on impressions, which refers to the total times an ad is displayed, regardless of whether it is clicked. Advertisers pay for every thousand times their ad is shown to users. This model is often used for brand awareness campaigns where the goal is to maximize exposure rather than immediate clicks.

Through these definitions, it is clear why the differentiation between CPC and CPM is centered around the method of charging: CPC charges per click while CPM charges per impression. This fundamental difference defines how advertisers strategize and optimize their advertising efforts based on their specific campaign goals.