Online marketing and advertising can be paid for in several different ways. This article is a quick guide to some of the payment models companies use when funding a campaign. No one size fits all – each model is suitable for different kinds of campaign. Many companies pay for more than one kind of advertising. This is often part of a broader goal to gather important data about the effectiveness of various tactical decisions – molding their future efforts.
PPC
Pay Per Click – usually abbreviated to PPC – advertising is an extremely popular method of budgeting for increased reach. In a rather self-explanatory fashion, Pay Per Click advertisers charge their client a variable rate depending on the number of times an advertisement or link within an advertisement is clicked. A PPC management service is typically motivated to conduct effective research and advertising in part because the more successful they are, the more they will be paid. This payment model ensures that companies will not pay exploitative fees for marketing strategies that do not work.
There are several kinds of advertisement that are well suited to PPC payment models. Sequential remarketing – in which a company’s products are readvertised to previous interacting consumers – is considered to be highly effective and highly suited to PPC payment. Social media advertising is also often conducted using the PPC model. Social media is an immensely powerful marketing tool when used efficiently and in a targeted fashion.
PPV
Pay Per View advertising can be either more or less cost efficient than PPC advertising depending on how materials are interacted with. Companies funding their online advertising via a Pay Per View arrangement pay a flat rate that increases depending on how many people are judged to have seen an advert – regardless of whether consumers follow links. This means that PPV follows a rather traditional advertising structure: the more likely an advert is to be seen, the more money a company will need to pay for it. If companies do lots of accurate market research and figure out where their most lucrative markets are, they will be able to make PPV work for them financially. On the flip side, many companies pay huge sums of money for adverts that are seen by millions and interacted by relatively small numbers of people.
PPA
Pay Per Action – or PPA for short – is popular with software developers or market research agencies. During a Pay Per Action campaign, the hiring company will set specific action parameters that determine the price. A company may choose to pay according to the number of consumers that install software, for instance. They may also pay according to the number of concrete leads generated or according to proven consumer interaction with an ad. This kind of plan is suitable for companies that require proof that a marketing strategy is directly contributing towards sales or broader strategic goals. It is useful for gathering information about which marketing strategies are leading to genuine leads so that future PPC or PPV campaigns can be conducted efficiently.
