What is the difference between CPM and CPC?

The distinction between CPM and CPC is fundamental in digital advertising, and recognizing it is crucial for understanding how different pricing models operate. CPM, which stands for "Cost Per Mille," refers to the cost an advertiser pays for one thousand impressions or views of an ad. This model is primarily focused on brand visibility and reach, making it beneficial for campaigns aimed at increasing awareness rather than immediate clicks.

On the other hand, CPC stands for "Cost Per Click," which designates the amount an advertiser pays each time a user clicks on an ad. This model is performance-driven and is typically used when the goal is direct response, as it allows advertisers to pay only for actual interactions with their ads.

Understanding these definitions helps advertisers choose the appropriate pricing strategy based on their campaign goals, whether it be maximizing exposure through CPM or driving specific actions through CPC. The other options inaccurately define or categorize these concepts, focusing either on misapplications (like associating models specifically with certain ad types) or suggesting that there is no difference between them. This distinction is vital for effective ad campaign planning and execution.