Pricing Models
Overview
The cost of inventory is determined through six main pricing models: fixed-rates, cost-per-click (CPC), cost-per-thousand impressions (CPM), cost-per-action (CPA), cost-per-sale (CPS), or real-time-bidding (RTB).
Pricing Models
| PRICING MODEL | FORMULA | USE |
|---|---|---|
| FIXED-RATE | Spend is a hard cost set by the vendor | Fixed rates are often used for sponsorships, content syndication, and other premium media placements. |
| CPM: COST-PER-THOUSAND IMPRESSIONS | Cost = impressions x CPM rate / 1,000 | The standard pricing model, CPM may be used across media channels for easy comparison. |
| CPC: COST-PER-CLICK | Cost = clicks x CPC rate | CPC allows a brand to receive as many impressions as necessary in order to fulfill a desired click-response goal. |
| CPA: COST-PER-ACTION | Cost = actions x CPA rate | CPA allows a brand to receive as many impressions as necessary in order to fulfill a desired acquisition goal (leads, orders, actions, etc.) |
| CPS: COST-PER-SALE | Cost = sales x CPS rate | CPS allows a brand to receive as many impressions as necessary in order to fulfill a desired sales goal. |
| RTB: REAL TIME BIDDING | Cost fluctuates with competitive bids | RTB enables a brand to pay market value per impression or click, gaining maximum control over the price of media. |
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