Buying advertising online is certainly a pretty guaranteed way to build up not only traffic on the Internet, but also your brand. And many times, building brand awareness is every bit as valuable as building raw traffic numbers to your website.

If you’re going to explore the area of advertising, though, you need to be aware of some basic terms. This is true whether you want to puts ads on your website for revenue reasons or whether you want to purchase advertising for your website.

Below are some basic terms:

• Impression. An impression is any single time an ad is displayed on a website.
• CPM – Cost per thousand impressions. When buying advertising on a CPM basis (or charging on a CPM basis), you are talking about a certain fixed cost for every 1,000 impressions of the ad.
• CPC – Cost per click. Regardless of how many times the ad is displayed, charge will be based on the number of times the article is clicked on. For the advertiser, this is good because they are only paying for an ad’s performance and actual clicks on the ad.
• PPC – Pay per click. The method of paying for advertising where the advertiser only pays when a user actually clicks on an ad. As you might have guessed, networks that pay on a PPC basis will be talking about CPC, which is the cost per click (see above). PPC ads are open to abuse because of click fraud.
• Conversion. A conversion is where the person clicking on the ad actually does what the advertiser wants them to do (buy a product, sign up for a mailing list, etc). So, the advertiser puts out an ad. That ad is designed to entice the person to do something. If the person clicks on the ad, they visit a website. If the person then does what is desired from them while on that website, that counts as a conversion.
• CPA – Cost per Action. Cost per action is where the charges are based on the number of actual conversions. Ads of this type are common in affiliate programs where pay is based on commission.
• Contextual advertising. This is advertising which appears in context with other content, usually using keywords to determine the ads. Google Adsense, for example, is contextual in that the ads that are displayed usually are related to the content they are displayed next to.

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