Pricing Models for Online Ads

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Before you start putting ads on your blog, you must understand first the concept of the various pricing models for online ads, namely: PPA, PPC, PPI, PPS and Shared CPM.

1.  PPA (Pay-per-Action).  A blogger receives a commission from an advertiser for every blog reader who clicks on the advertiser's ad and perform a required action like signing up for a newsletter or filling out a form.  PPA pricing model is used by banks, credit card companies, Internet service providers, subscription services and the like.

2.  PPC (Pay-per-Click).  A blogger receives a commission from an advertiser when a blog reader clicks on the advertiser's ad.

3.  PPI (Pay-per-Impression).  A blogger receives a commission from an advertiser for every 1,000 clicks or impressions on the advertiser's ad, which may be in the form of a text, banner, image or rich media ad.

4.  PPS (Pay-per-Sale).  A blogger receives a commission from an advertiser a percentage of sale when a blog reader clicks on the advertiser's ad and purchases merchandise directly at the advertiser's website.  PPS pricing model, also known as Revenue Sharing, is used by online merchants like Amazon, Wal-Mart, OfficeMax and many others.

5.  Shared CPM (Cost-per-Mil).  A blogger receives a commission from 2 or more advertisers, who are sharing the same advertising space in the blog, for every 1,000 clicks or impressions on each advertiser's ad, which may be in the form of a text, banner, image or rich media ad.  The advertiser's ad, sharing with other ads, is alternately displayed on the blog's same ad space every time the blog page is refresh.

Last Words

Now, you already have a knowledge of the different pricing models for online advertising.  The next step that you will do is to learn the various types of online ads that you may want to put in your own blog to make money in addition to your passion for blogging.

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