Google Plays Mythbusters With AdSense

    March 31, 2006
    WebProNews Staff

Site publishers with questions about how CPC and CPM advertising work will benefit from Google’s clarifications on the two ad formats.

Theresa Chow from AdSense Publisher Support posted some useful information about cost-per-click versus cost-per-impression advertising (CPC vs CPM). Some misconceptions have existed since Google began offering CPM as an option to advertisers.

First, not all text ads are CPC, and not all image ads are CPM. Advertisers can choose which ad format and display they prefer. “In order for a CPM ad or an image CPC ad to win in the ad unit auction and appear on your site, it has to produce an effective CPM greater than the sum of the individual text ads that would otherwise appear,” Chow noted.

With CPM being much more valuable to site publishers than CPC, naturally those publishers would love to only have those ads display on their sites. However, setting AdSense ad units to “image only” will not exclusively bring in CPM ads.

“As a rule of thumb, we recommend opting into both text and image ads. Doing so expands the pool of advertisers competing to display on your site – both on a CPC and CPM basis – therefore maximizing your site’s revenue potential. It also helps to choose an ad format that supports both text and image ads,” said Chow.

Site publishers face another problem with setting their ad units to “image only”: if there is not enough inventory to populate their ad units, public service ads will appear their instead.

Also, CPM ads are site-targeted, so the site’s content rather than an ad unit preference will dictate if a CPM campaign will appear on a given website in Google’s site publisher network.

Chow wrapped up by noting that site publishers can participate in Onsite Advertiser Sign-up even if they only wish to have text ads appear. Advertisers can create text ads for a site just as they can image ads.


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David Utter is a staff writer for WebProNews covering technology and business.