Recently, while working on the commercialization of internet products involving ad placement, I discovered many unfamiliar industry-specific terms. Here’s a summary I compiled.
1. CPM (Cost per mille), Cost per thousand impressions
This is the most common advertising model and a key monetization method for high-traffic apps/websites. Since it only charges for impressions (not clicks, registrations, downloads, etc.), revenue is generated whenever the ad is displayed to one thousand users—essentially converting traffic into revenue.
2. CPC (Cost per click), Cost per click
As the name suggests, CPC charges per click. For advertisers, the CPC model helps improve conversion rates and reduce costs. Additionally, ad platforms can limit a single IP to only one chargeable click per 24 hours, further reducing advertiser spending.
3. CPA (Cost per action), Cost per action
Unlike CPC, CPA charges only when a specific action is completed. This action can be registration, consultation, transaction, download, or message submission. However, while this model prioritizes advertiser interests, it often overlooks the interests of apps/websites, leading to increasing resistance from publishers.
4. CPS (Cost per sale), Cost per successful transaction
This model is more stringent but also commands higher rates. Payment is calculated as a specific percentage of the actual purchase amount or consumption value after users click the ad. If users don’t complete the final payment, it’s considered invalid.
5. CPL (Cost per lead), Cost per lead
This is an advertising model that charges based on collecting potential customer information. Advertisers pay based on the number of users directed to their designated landing page through ad clicks. A single IP can only click once per 24 hours. This is a common advertising model where users register successfully through specific links and payment is made afterward—what we typically call lead generation, widely adopted by game and app promoters.
6. CPR (Cost per response), Cost per response
Charging is based on the number of user responses. A response is counted as valid only after users correctly answer the advertiser’s questions or call the phone number provided online. Additionally, the same IP cannot respond to the same advertisement multiple times within 24 hours. To mitigate advertising cost risks, advertisers only pay the ad platform per transaction after users click the ad and complete an online transaction.
7. CPT (Cost per time), Cost per time period
Such as monthly or annual subscription fees. In this model, apps/websites provide fixed ad placements and charge based on a fixed price per time period. No conversion rate guarantees are required, as pricing in this model is primarily determined by website traffic and website type.
Among all these models, CPM, CPC, CPA, and monthly ad placement are the most common methods that effectively protect advertiser interests. Since users tend to be resistant to ads and conversion rates are generally low, and all ads must be clearly labeled as such—even CPC is affected. With the advent of the big data era and the continuous development of personalized recommendation technology, the OCPC (Optimized Cost Per Click) advertising model has gradually emerged.
8. OCPC (Optimized Cost Per Click), Optimized cost per click
Intelligent bidding based on conversion targets—essentially an “optimized” version of CPC and a relatively new advertising approach that helps advertisers control conversion costs and increase conversion volume. The system adjusts bids dynamically based on the advertiser’s initial bid, utilizing multidimensional data, real-time feedback, and massive historical data accumulated over time. By estimating conversion rates and considering competitive landscapes, the system intelligently adjusts bids to optimize ad ranking, helping advertisers secure the most suitable traffic and reduce conversion costs.
Simply put, if the platform detects that a particular user has a high probability of converting on an ad, it can increase the bid slightly to give the advertiser a better chance of capturing that user’s impression opportunity. Conversely, if conversion probability is low, the bid is lowered. This can be understood as intelligent advertising, and OCPC is now widely utilized by major new media platforms for information-feed advertising.
This model requires long-term accumulation of audience profiles and deep conversion data co-built with clients, leveraging DNN deep learning technology to optimize conversions for advertisers. It breaks through keyword-matching and bid-based ad triggering limitations, selecting high-quality, high-converting traffic from a wider range. Based on the CPA targets expressed by advertisers, it implements intelligent placement to acquire more quality traffic while improving conversion rates.
Other advertising models
PPL (Pay per Lead), a pricing model where advertisers pay based on leads generated through online advertising. Advertisers pay the ad service provider for each visitor who clicks the ad and completes an online form (i.e., generates a lead). This advertising type is commonly used in online membership-based marketing models and affiliate commission structures. It’s similar to CPL advertising.
PPS (Pay per Sale), a pricing model where advertisers pay based on the direct sales generated by online advertising. This term is essentially equivalent to CPS and is similar to services like Taobao Affiliates. In a broader sense, it’s not limited to the online advertising domain but includes all forms of business partnerships where commissions are charged based on successful sales.
PFP (Pay For Performance), payment for performance—charging based on thousand impressions, essentially similar to the CPM model.