Digital Advertising: Lower Funnel Marketing Costs (CPC, CPA, and CPV) #MediaMath

Photo: Adobe

If you are familiar with the Marketing Funnel, you know that awareness is associated with “Upper Funnel” and “Lower Funnel” is associated with actions- sales, leads, etc.  In Digital Advertising, most awareness-based campaigns are sold on a CPM basis.  For more information on CPMs, check out “WTF is a CPM?  #mediamath”.

There are 3 common types of “Lower Funnel” Digital Advertising Cost Metrics:

• CPC – “Cost Per Click”

• CPA – “Cost Per Acquisition”

• CPV- “Cost Per View”

CPC – “Cost Per Click”

CPC campaigns, or “Cost Per Click” is a type of Digital Ad Campaign where an advertiser do not pay unless the ad receives clicks.  It is commonly used on Social Media Ads, Search Ads, and some Display ads.  Cost per click is calculated using the below formula:

CPC = Total Ad Spend / Total Clicks

You can do the manual math using the above formula, or if you hate media math as much as we do, you can use the below handy CPC Calculator.

CPA – “Cost Per Acquisition” or Cost Per Action”

CPA campaigns, or “Cost Per Acquisition/ Cost Per Action” campaigns are a type of Digital Ad Campaign where an advertiser does not pay unless an agreed upon action is completed-- such an app downloads, or the ad coverts a user to a sale.  This metric can be used in search, social, and email campaigns.  There are also a number of “CPA Networks”.  Cost Per Acquisition/ Cost Per Action formula is below:

CPA = Total Ad Spend / Total Conversations

You can do the manual math using the above formula, or if you hate media math as much as we do, you can use the below handy CPA Calculator.

CPV- Cost Per View

CPV, or “Cost Per View” campaigns are a type of Digital Ad Campaign where an advertiser does not pay unless they hit a certain number of measured views. CPV campaigns are commonly used in Video Ad Campaigns, including social and programmatic advertising campaigns.

CPV = Total Ad Spent / Total Views

You can do the manual math using the above formula, or if you hate media math as much as we do, you can use the below handy CPV Calculator.

The type of Lower Funnel Digital Advertising campaign metric used is dependent on your campaign goals and objectives.  Once you have your strategy solidified, this will then determine if a CPC, CPA, or CPV campaign makes the most sense for your advertising campaign.