While there are dozens of ways to make money online, two of the most popular categories are CPC and CPM Ads. CPC stands for Cost Per Click (i.e. you make $x each time a visitor clicks on an advertisement). CPM stands for Cost Per Thousand (roman numeral M) where you make $x per 1,000 times your advertisement is viewed on your site. Most major ad networks will specialize in one of these two methods, but which one is right for your website?
When To Use CPC Ads
CPC Ads usually work well in two scenarios:
1) when your audience trusts you and your content or 2) when your audience is highly engaged in your topic.
Imagine that you run a successful blog with thousands of loyal followers. When you add a relevant text link that pays you $1 for every click, your loyal/trusting audience will gladly click through to the advertisements. Whereas a distrusting audience might not be so eager to click through. If you have worked hard to build trust with your readers, CPC ads can pay off in droves.
As a general rule of thumb, for smaller to medium-sized websites, CPC ads are the easiest and most profitable way to monetize your traffic. The primary benefit for smaller sites is how scalable CPC ads can be. You earn the same rate for every click, whether you have 100 clicks or 10,000. As you grow, so does your income. For higher traffic sites, however, CPM ads can be very successful.
When To Use CPM Ads
CPM ads often work well for larger websites. The primary reason for this is because big-brand advertisers love to use CPM ads to create exposure for their products. Yet, because of their big budgets, they rarely seek out smaller sites. When you have a large audience, however, creating lucrative CPM ad deals becomes a much more real possibility.
In addition to private ad sales, there are many CPM networks that can work for smaller sites, albeit with very low CPM's. But until your site reaches the top 5% in your niche, it's best to focus more of your effort on CPC ads.
Finally, it is worth mentioning that you can generally use a combination of CPC and CPM ads on the same website. They are rarely mutually exclusive, and I suggest trying both on the same page if possible. When it comes to monetizing web traffic, my mantra is "Test, Test, Test". Use the above tips as a good starting point for your own experiments. Constantly tweak, change, and revise your monetization strategy until you are happy with your average earnings per visitor.
