Online advertising is crucial to ecommerce. It’s a hotly contested space, with businesses competing for ad spots and publishers fighting against each other to provide those spots.
With that in mind, let’s take a look at two basic terms associated with online advertising—impression vs click.
What Are Clicks?
Ad clicks are a way for companies to measure how effective their advertising is.
Every time someone clicks on an ad, it counts as a click. Companies use this data to determine how “effective” their ads are in getting people to answer the call to action.
Ad clicks are just one of the many ecommerce metrics that companies use to gauge advertising effectiveness.
Pay-per-click (PPC) advertising is where businesses pay every time their advert is clicked. A “click” can cost anywhere from a couple of cents to over a dollar.
Clicks need to be considered alongside impressions.
What Are Ad Impressions?
Ad impressions are a measure of the number of times an ad is shown. This includes ads that are seen on websites, apps, and other digital platforms.
Digital ad impressions are important for businesses because they give an indication of how many people are seeing their ads.
Although it’s important to note that just because an ad is on the page, it doesn’t necessarily mean that the user is actually looking at it.
The ad could fail to draw their attention due to suboptimal design, they may be preoccupied with something else, or, worst-case scenario, the ad may not even be visible. We’ll return to that point near the end of this article.
Pay-per-impression (PPM) is where businesses pay each time their ad is shown a specific amount of times, normally a thousand. For example, a business could pay $30 for every thousand times their ad is shown.
Impressions vs Clicks
It’s important for businesses to compare impressions to clicks to figure out whether they want to opt for a PPC model or a PPM model.
Usefulness
While businesses will decide to pay for one or the other, both click and impression metrics are needed in order to figure out their “click-through rate” (CTR).
In order to figure out CTR, a business must divide the number of clicks it gets by the number of impressions:
Clicks / Impressions = Click-through rate
Best-One For Business
All of that said, when it comes to paying for impressions vs clicks, businesses are better off opting for a PPC model rather than a PPM one.
With PPC, businesses only pay when someone actually clicks on their ad. This means that they are only paying for actual leads entering their sales funnels, which is a more efficient use of their advertising budget.
With PPM, businesses pay for every 1,000 impressions their ad makes, regardless of whether anyone clicks on it.
This can quickly become expensive, especially if the ad is being shown on a high-traffic website.
In addition, PPC ads are more targeted than PPM ads since they are often tied to specific keywords.
As a result, pay per click is better vs cost per impression.
Common Scams
When it comes to advertising, there are a lot of ways to get scammed. Some scams are more common with PPC or PPM advertising. Here are a few of the most common scams to be aware of:
Pixel Stuffing
With this PPM scam, websites will put ads on their site that are only a single pixel in size. This means that the ad is being displayed on the page and “technically” visible.
However, it’ll be invisible to any users, meaning the website is getting paid for advertising impressions that are useless to the companies who paid for them.
This can be damaging to a business’ budgeting strategy, not to mention their budget at large.
Ad Stacking
This scam is similar to the previous one, but it affects both PPM and PPC adverts.
In this one, websites will stack ads on top of each other, so only the top one is actually visible, but any impressions and clicks it gets are applied to all the adverts underneath it.
This will see businesses getting charged a lot of money for no gain at all.
A common thing to look out for is an extremely high bounce rate. This could indicate inorganic traffic.
Conclusion
In the impression vs click cost analysis, clicks win. However, both are two of the most important metrics to track when it comes to online advertising.
By understanding the difference between the two, as well as their respective uses, and the danger of scams, businesses can make sure that their advertising campaigns are driving results and are cost-effective.
Remember, PPC and PPM aren’t the only types of advertising. For a powerful solution, consider affiliate marketing.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.
