Starting a podcast (if you already haven’t started) is a easy breezy compared to Advertising. When thinking about Sponsorship or Advertisements for your podcast, you need to know a few key podcast advertising Buzz/Online advertising pricing model words first that accompany your start to advertising.

CPA (Cost Per Action)

The actions defined in a cost-per-action agreement relate directly to some type of conversion, with sales and registrations among the most common. This does not include deals based solely on solely clicks, which are referred to specifically as cost-per-click or CPC.

The cost-per-action (CPA) model is at the other end of the spectrum from the cost-per-impressions model (CPM), with the cost-per-click (CPC) model somewhere in the middle. In a CPA model, the publisher is taking most of the advertising risk, as their commissions are dependant on good conversion rates from the advertiser’s creative units and Web site.

Marketers looking for cost-per-action deals have several options. Publishers with considerable excess inventory may be willing to consider nonstandard offers. Sites specializing in incentive programs are in a position to offer CPA pricing on various types of leads, although the usual caveats concerning incentivized traffic still apply. Perhaps the most widespread use of performance-based pricing is affiliate marketing, whereby merchants/advertisers determine what actions they want to reward and how much they are willing to pay.

Information provided by MarketingTerms.com

CPM (Cost Per Mille)

The total price paid in a CPM deal is calculated by multiplying the CPM rate by the number of CPM units. For example, one million impressions at $10 CPM equals a $10,000 total price.

1,000,000 / 1,000 = 1,000 units
1,000 units X $10 CPM = $10,000 total price

The amount paid per impression is calculated by dividing the CPM by 1000. For example, a $10 CPM equals $.01 per impression.

$10 CPM / 1000 impressions = $.01 per impression

Information provided by MarketingTerms.com

CPA and CPM are keywords to podcast advertisers that are used most often when talking to potential sponsors or advertisers, everything comes back to CPA and CPM so get to know the buzz words very well.

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