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.
Would you like to have insights delivered to your inbox?
Sign up to receive our newsletter now!
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.
How the CPC pricing model on trivago works for independent hoteliers
Rate Connect is the tool that you as an independent hotelier use to advertise your website rates directly on trivago. It works as a CPC campaign that runs off of a monthly budget, which you determine.
Typical CPC advertising campaigns require the advertiser to continuously set and adjust bids in order to achieve a high page ranking for their ad or deal. But we know how busy hoteliers are, so we’ve taken the complexity out of this process and automated it for you.
When you advertise with Rate Connect on trivago, we automatically adjust your individual property’s CPC bid on a daily basis. That way, your campaign is always competitive with other advertisers.
To determine CPC prices for each property, we start by estimating a range based on property type and user behavior on each of trivago’s localized platforms. Once your official website rates are live on trivago, we adjust daily CPC prices based on real-time market data such as property rates and competitor CPCs.
Find out more about Rate Connect and advertising your direct website rates on trivago here.