CPC Vs. CPI

Cost

CPI costs you a set rate every time your ad appears on someone's computer screen; the website's server counts each time your ad loads onto a user's screen as one impression. Cost per mille, or CPM, is a type of CPI that charges you for every thousand impressions. The cost of CPM or CPI varies depending on the website and other factors such as the size and position of the ad.In CPC advertising, also called pay per click, or PPC, you pay a fee each time a Web user clicks on your ad. According to Dunay, search engines use a bid-based pricing system for CPC ads, while content websites or comparison-shopping websites usually charge a set CPC rate. You can negotiate the price of your CPC ad with the website owner. As of December 2011, some sites, such as Facebook.com, use a bid-based pricing system for both CPI and CPC advertising.

Uses

CPI is best for common banner ads, Dunay says, and provides maximum visibility for your product or brand, or the announcement of an upcoming product. Email ads and text links also often use CPI.CPC advertising draws as many users as possible to your website, which is why search engines such as Google sell CPC ads. You assign keywords to your ad and, when a Web user searches for one of the keywords, your ad will appear in a list of sponsored websites. The highest bidders' ads for a particular search term appear at the top of the list.

Audience

CPC ads are much more target-specific than CPI ads, because they appear on search engine results or content pages related to your product or service and reach an audience with a general interest in it. The payoff can be immediate if the user makes a purchase, or more long-term if visitors bookmark your page for future use. Websites such as Facebook.com offer geo-targeted CPC and CPI ads, which helps advertise a local business rather than a Web-based outlet or national chain.

Considerations

CPC is vulnerable to scams using malicious code to falsify clicks, so it's prudent to first investigate what steps a website has taken to protect against scamming. Google, for example, has an automated system that guards against CPC scams, and Facebook is naturally resistant to this problem, as each user can only 'like' a product page once.In terms of cost, CPI is much more predictable than CPC because predictions of how many people will see your ad are based on the website's typical traffic, rather than how many people might click on your ad.