Advertisement glossary of ROI- what is ROI

Whether you want to make money blogging or promoting yourself, you will be advertising at least once in your life. When we talk about ad networks or advertising, we read certain terms that confuse us and in some cases people are afraid and do not take the step to advertise.

To prevent this from happening, and since it is very simple, I will explain to you what these frequent terms are and what they mean, even the differences between them and which are the most profitable.

This is primarily intended for beginners, but it can also help more experienced bloggers who are just starting to advertise.

Advertising glossary.

What is the return on investment?

ROI simply means returns on investment. I will show you an example and you will understand it easily.

Suppose you have an affiliate product, a book, titled “How To Make Money Blogging”. You don’t have a blog, so you’re trying to advertise and promote the book. You love Google, so you try Google Adwords and invest $ 100 in advertising. You set up your ad and publish it. You got lucky and the book which costs $ 20 each sold to 10 readers who clicked on your ad.

You won $ 200. This is correct, but you need to withdraw the $ 100 that you used to advertise so that you can calculate your actual profit. Which means 200-100 = $ 100. Those $ 100 are your return on your investment. It can also be calculated using the percentage.

What is CPC?

CPC is an informative term for advertisers and publishers. CPC simply refers to the cost per click of a particular ad.

For advertisers, it’s helpful to calculate the estimated amount to spend to get a particular amount of clicks.

Ex: I want to advertise my blog, so I use Adwords (yes I also like Google). When creating my blog, I chose “Make Money Blogging” as my main keyword. Adwords tells me that the CPC for this keyword is $ 0.70 (I wish), so to get 100 clicks I would have to spend $ 70.

What does CPA mean?

CPA is one of my favorite (if not THE favorite) way to advertise, as I mostly make money from affiliate programs. CPA stands for cost per action. As usual, an example is worth over 1000 images.

I am promoting an affiliate product. I bought a new Olympus digital camera and it is so good I will mostly sell a few. So I decide to advertise using the CPA, which guarantees me the reader’s action, which in this case is to buy the product.

Sure, CPA has higher CPC rates than any other advertising medium, but I personally think it’s worth it.

And to finish,

What is the CPM?

CPM stands for cost per impression. But hello? Wouldn’t it be, in other words, the CPI? No, because CPM rates are calculated on a thousand bases. I’ll show you how it works by writing an example:

Ex: I have a banner and I want to promote it on your website. You tell me that to put this banner on the header of your blog, the CPM rate is $ 5; that is, once my banner is displayed a thousand times, I will pay you $ 5.

Yes, it is simple.

I keep meeting bloggers who haven’t advertised yet because they’re afraid of those terms, so they decide not to because it’s more comfortable to stay where they are and not take a step forward.

Advertising, like everything on the net, is not that difficult. Don’t be afraid of what other people say, just do what you want without breaking the rules and you are on your way to success.

Thanks for reading.

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