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The Potential and Pitfalls of Online Marketing Payment Models


Online Marketing is one of the primary means of marketing and product placement in the modern world. Therefore it comes with its own set of pitfalls despite being a medium of enormous potential. One must be aware of these risks and invest accordingly.

Chief among these is the capacity for fraud in which the client may be swindled by the host website. One must at first be aware of the different kind of payment structures for online marketing. Some of these structures may be more prone to fraud than others, depending on the client’s necessity.

Cost per Mille is a number based payment structure in which the cost of the advertisement is determined by every 1000 views of the ad by the customer. This model is prone to being exploited by the host and the advertisers must use certain means to ensure that an ad is actually viewed, like page tracking or JavaScript tags.

Cost per Action is a structure often seen in downloading websites where a potential visiting customer must fill a form or buy an item to gain access to further content on either the hosting website or elsewhere, of for other incentives. The advertiser then pays for the number of times this action is completed by a viewer. This is comparatively less risky on part of the client since it places a large part of the responsibility on the host.

Cost per Click payment may be most prone to exploitation since it determines payment by the number of clicks received by an advertisement. It is also the most popular model. A host may easily use third person software, manual interference or bots to increase the number of clicks thus increasing revenue for themselves while reducing exposure and profit for the client.

Moreover, it is also susceptible to accidental clicks where the viewer does not actually want to buy the product. To this end, a number of host websites may utilise software to ensure “accidental” clicks. One must be careful when utilising this model and double-check the host’s credentials.

Fixed Cost payment is the most stable method since it depends on a fixed amount of money for placement of ads regardless of concerns like views or customer interactions. Hence while it may have a reduced possibility of success it also largely reduces the risk of fraud. As opposed to this, the Cost per Engagement model actively utilises techniques to measure the level of user interaction with the ads and charges based on this level.

It ensures both a certain degree of interaction, thus increasing exposure and potential profit, and a fair payment model. It also reduces the advertiser’s need to employ methods like page trackers to ensure that their ads are viewed. Based on the placement of the ads, the nature of the products and the authenticity and potential demographic of the host website, any and all of these methods may be more effective than another.

If one ensures a few things before placing an ad or launching a campaign, then one may rest assured that the power of online marketing has been harnessed properly to maximise profits and propel the products to the top of the charts.