CPM, CPC, CPA . . . meaning what, exactly? Anyone in the advertising industry or in a marketing role will be all too familiar with these terms — which are abbreviations for different pricing models for online marketing campaigns, by the way. But for independent hoteliers new to the online marketing scene, these may very well be completely new terms that need to be defined.
So define them we shall.
Why do all abbreviations start with “CP”?
“CP” stands for “cost per.”
Each of these acronyms starts with these two letters because you pay “per” the number of times a potential guest sees your ad online (CPM), clicks on it (CPC), or completes an action after engaging with it (CPA).
In hotel marketing, this could be, for example, the number of times a traveler clicks on your website rate displayed on trivago (CPC), or books your hotel through an OTA after seeing their ad (CPA).
What exactly do CPM, CPA, and CPC mean?
These are the three main models for pricing online advertising:
Cost per mille, or cost per 1,000 impressions. You pay each time an ad is displayed to a user — also known as an impression.
Cost per acquisition, or cost per action. You pay each time a traveler completes a specific action: for example, each time a traveler completes a booking. This is the model you’ll most often see with OTAs.
Cost per click. You pay each time a link to your site is clicked. This is the model trivago uses for both OTA advertisers and the hoteliers who promote their website rates on their hotel profiles.