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Following an article I wrote about forex advertising in 2010, I got some questions about what goes on behind the scenes. This article lays out the 5 different advertising methods, how they work and how they are priced.

Most of the advertising methods are used on other fields, not only forex. I hereby focus on the prices and characteristics that I’ve experienced here which are forex-centric of course:

  1. CPM: Cost Per Mil. This is the most  straightforward and transparent method – the advertiser and the publisher discuss the number of impressions and negotiate on  a price. The price is based on the cost of 1,000 impressions. Both sides can easily measure the number of impressions – the most transparent method. This method usually applies only for banners that are “above the fold” – banners that can be seen without scrolling down the page – an impression is always real. The pricing varies, but can depend on benchmarking Google AdSense performance.
  2. CPC: Cost Per Click. This method is mostly used by Google. Also here, both sides can usually measure the exact number of clicks that users clicked on the banners and pay according to a fixed cost per click. The problem here is detecting fraud – clicks that aren’t real. Google has developed sophisticated tools for this, but others haven’t, so this method isn’t too popular. In forex trading, Google banners can have an effective CPM of  $4 to $10, depending mostly on the location of the banners.
  3. CPA: Cost Per Action: This is the most popular method. The banner is placed for free and if a user clicks on the banner and eventually opens an account and deposits money, this is an action / acquisition. This method gives the broker full control. When the user leaves the publisher’s site, the publisher loses the ability to track the actions and solely relies on the broker’s reporting. As seen in this article, not all the brokers are honest, and some may not report all the conversions. Michael suggests trying to follow your banner and see if its reported. While this option sounds lucrative ($100 to $400 per cutomer), it may tricky. A publisher may place a banner for a long time and see a cent – even if the broker is honest. The next two methods have the same shortcomings uncertainty.
  4. CPL: Cost Per Lead. Same as CPA, just that the publisher is paid for leads and not for customers. There are more leads than customers than deposit, but the payout naturally smaller: $8 to $25 per lead.
  5. Revenue Share: In this method, the publisher shares the revenue from the customer throughout the lifetime of the customer. Needless to say, revenue from a customer is complicated to calculate, but it’s usually based on a share of the spreads. A publisher needs to trust the broker / ad network and test the results.

I hope this sheds some light.