Pay per play, pay per impression, and pay per click are all compensation methods used in online advertising. If you’re a developer who wants to monetize an app, if you’re a blogger who wants to test out monetization methods, or if you’re simply curious, you may want to learn more about them.
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Keep reading to learn which compensation method pays more and which you should use in your advertising campaigns.
Pay-per-play (PPP) gets less play than other compensation method acronyms (pun intended). This is certainly because it refers to a relatively uncommon method of advertising: audio advertising.
It’s not that audio ads themselves are uncommon, but they are uncommon online. The web is a medium composed predominantly of written content and visual images. Though audio ad networks are available, they are relatively uncommon.
Anecdotal evidence from around the web suggests that they just don’t generate that much revenue. The Nielsen Norman Group – leaders and experts in the usability field – suggested that audio ads have a negative impact. They are ranked right up there with the “dreaded pop-up ads.”
Pay-per-impression (PPI) is a compensation method that pays based on the number of impressions, or views, that an ad receives. From the advertiser’s perspective, this is abbreviated CPM, which stands for cost-per-mille, or cost-per-thousand-impressions.
This type of compensation model is used predominantly with display ads, text ads, video ads, interactive ads, and so forth. The pay rate varies, but is more widely known than the PPP compensation model, simply because there are so many more ads that use PPI than PPP as a payment setup.
As you may be able to guess, the advertiser pays out the ad network and the publisher each time an ad is viewed 1,000 times.
The rate varies based on the specific type of ad and the industry. Video ads can be over $20, while other types of display ads average at a few dollars per thousand impressions. At the low end, you’ll be receiving a few cents; at the high end, you’ll be receiving a few dollars, but the rates never quite compare to the rates for video ads.
Pay-per-click (PPC) rates are often much less per click, with small click-through rates that average around 0.3%. This means that if you receive 10 cents per click and get a 0.3% conversion rate, you will need more than 300 visitors to get a single click. That means you will need more than 3000 visitors to get a dollar.
Now, this is just extrapolation based on a hypothetical scenario with a hypothetical web page. But it gives you one clear idea: you need lots of traffic to earn money from these ads.
This is true whether you are using PPC ads on your website or in your app, though bear in mind that people tend to use apps for much longer periods of time than they do websites. The more engaged a user is with an app, the more they’ll be exposed to ads and the more likely they are to convert.
Which One Works Best?
It’s a toss-up between the PPC and the PPI. In either case, whether you’re designing for a website or an app or a software program, you’ll need significant amounts of traffic to generate a decent income from the ads.
To figure out the best option for you, put the ads in context with your particular marketing campaign and your content. If you already have an app or a website, it should be a simple matter to test out each advertising method and see which one works better.
Let’s compare the math above to potential earnings for a PPI ad: if you receive 10 cents per thousand views, then it would take 3,000 views to reach 30 cents. Not quite the same as 3,000 views for one dollar, is it?
Of course, this “10 cents” metric is arbitrary. As mentioned, the rates vary greatly based on your industry and how high profile your app or website is.
The highest paying industries, regardless of the compensation method, are business, technology, family and parenting, home and architecture, and web design. The lowest-paying industries are gaming, weddings, and beauty.
Do a little research to find out the average payments for your industry, then rough out some calculations to find out how much traffic you would need to reach a certain dollar amount.
From the above data, it’s clear that the PPP compensation method, i.e., audio ads, just isn’t feasible unless you run a radio show or podcast. And between the other two methods, PPC ads look like they have better results, but always do your advertising research, check your traffic and conversion numbers, and test. In some cases, the conversion rates and payout rates don’t equal the industry averages.