An important part of any marketing campaign is monitoring the success of the said campaign, and keeping your eyes fixed on the metrics so that you can determine whether a marketing campaign is worth the significant time and money investment!
But there are so many unique metrics for you to track and so many unique methods of tracking them that it can be very difficult to figure out the best way to do it.
Two of the most popular methods for tracking ad metrics are ‘Cost Per Mile’ (CPM), and ‘Click Through Rate’ (CTR). But why should you be aiming to use CTR over CPM wherever possible?
What makes it more beneficial than CPM? Let’s find out together!
Read on below to find out what makes CTR such a useful metric, and how you can use it to improve the performance of your business on the internet!
What Is CPM?
CPM refers to ‘Cost Per Mile’, and is a metric used to measure the overall cost of an advertisement for every one thousand clicks or impressions it generates. Hence the name.
This is a long-used metric that has proven useful to many businesses that conduct themselves online and that depend on online advertisements.
The metric is useful because it helps a business to determine whether a good enough number of internet users are not just seeing their advertisements but also clicking on them, helping them to determine the profitability of such ads.
What Is CTR?
CTR is an abbreviated term that refers to ‘Click Through Rate’. This is a metric that is measured by calculating the ratio of people who see an ad online and then end up clicking on it.
CTR is an increasingly popular metric to analyze because it allows businesses to get a great sense of exactly how well certain keywords and advertisements are performing, as well as the number of impressions that they are even making!
What Are The Advantages Of CPM?
The advantages of CPM are slightly fewer than those for CTR, but there are still a number of benefits that may make it appealing to numerous online businesses.
One of the best advantages of CPM is that it is incredibly profitable for high-traffic websites.
The reason for this is that you are only ever paying for one thousand clicks or impressions.
If you have a high rate of clicks on your advertisements, then you will end up saving a lot of money, thus massively increasing your average revenue.
Because you are only ever paying for every one thousand clicks or impressions, you will not be receiving massive amounts of data for every single click or impression you have.
This helps you to more easily analyze the success of your advertising campaigns every time they reach the one thousand milestone.
The measurements of CPM metrics are also incredibly accurate, which helps to ensure that you are always up to date on the performance of your business and its goals for success.
What Are The Disadvantages Of CPM?
One of the major disadvantages of the CPM model is that, if there are not enough clicks being made on advertisements, then the risk of losing out on profit is incredibly high.
This is why CPM advertising is best recommended for businesses that have already established themselves.
In order to determine whether CPM would be profitable for a business, a large degree of research would need to be carried out!
If traffic begins to dip for a website, and fewer people are clicking on ads, then return on investment very quickly comes under threat.
As well as this, actually implementing a successful CPM strategy requires a high degree of skill and proficiency.
This means that employees may need to be trained ahead of using it, which costs both time and money.
The potential disadvantages of CPM models are very considerable, and would likely cause any person to second-guess the strategy.
Unless a business is sure that it can turn a profit and generate clicks, then it is best to avoid this method.
What Are The Advantages Of CTR?
Having a high click-through rate is, naturally, highly advantageous, as it ensures that a website will continue to find success in the future!
One of the major benefits of having a high CTR that you can monitor is that your website is far more likely to rank highly in SERPs.
The better your CTR, the more likely that search engines will determine your website to be a trusted resource, and the more likely it will be to recommend it to internet users!
Every 3% increase in CTR will net you a massive improvement in SERP ranking, and monitoring your CTR is incredibly easy, so you can always make sure that you are on track to your CTR goals at every step of the way.
Monitoring your CTR is also highly advantageous because it can show you ways that you can improve your conversion rate and optimize your customer pipeline.
Worried that too many potential customers are avoiding committing to purchases at the last moment?
Use your CTR metrics to determine whether you need to optimize your pipeline and remove hurdles between the potential customer and the product.
CTR can also help you to track exactly where clicks are coming from, so you can see if certain social media platforms help you to generate more profit than others.
This is also thanks to the fact that more data is generated by using CTR metrics, allowing you to get very in-depth with your business analysis.
What Are The Disadvantages Of CTR?
Although CTR will help you to better determine the pathways that users of your website are taking, it will not alone be able to help you to increase the rate of conversions.
You will need to dedicate some time to ensure that customers that click on your ads actually convert to paying customers!
CTR also yields a large amount of data, which some people may find it difficult to sift through and analyze, which can significantly impact productivity.
You will need to ensure that you are able to manage large amounts of data.
Why Is CTR Better Than CPM?
As you can now likely see, CTR is better than CPM in quite a large number of ways. CTR is better because it helps businesses to get a much better grasp on their profits and how their business is performing.
The instant access to data afforded by CTR ensures that business owners can always be improving their business operations day to day on the fly, whenever their data suggests that it is the best recourse.
As well as this, CTR is far more likely to yield a profit for more businesses, even those that are not already successful. CPM requires that a business already earns a high degree of traffic in order to prove profitable!
To Conclude
We hope that you can now see just how much better CTR is than CPM. CTR makes it easier than ever for business owners to manage their businesses and improve them where they can.
These days, everything is online. You can’t get your business anywhere without a great online presence. With search engines forever changing, it’s difficult to stay on top of it all! That’s where I’ll come in.
Hello, my name is Jack O’Neil and I have been in the marketing industry for almost 10 years. I focus on online marketing, SEO, advertising, and more.
