What Is CPD?

Date First Published: 21st November 2022

Topic: Web Design & Development

Subtopic: Web Advertising

Article Type: Computer Terms & Definitions

Difficulty: Medium

Difficulty Level: 5/10

CONTENTS

How To Calculate CPD?
What Is The Average CPD?
Advantages and Disadvantages Of CPD
History

Learn more about what CPD is in this article.

Stands for cost per day. CPD is a fixed cost method of charging advertisers which represents the amount of money an advertiser will be charged for publishing an ad for a day on a website, regardless of the number of impressions or clicks. For example, if an advertiser books an advertising campaign on a website and agrees to pay £35 to advertise for a week, their CPD would be £5.

Note:

Similar to CPL (cost per lead), CPC (cost per click), CPM (cost per mille), and CPE (cost per engagement), do not use CPE to mean the amount of money a publisher earns per day. Technically, it is incorrect to use this measurement on the publisher's side because it does not cost them money to display other advertiser's ads on their website. The amount of revenue they earn per day would be RPD (revenue per day).

How To Calculate CPD?

CPD can be calculated using this formula:

Total cost of the advertising campaign ÷ total number of days

For example, if an ad cost £15 and it ran for 3 days, the CPD would be calculated below:

£15 ÷ 3 = £5.00 CPD

What Is The Average CPD?

The average CPD cannot be listed here as it depends on the website and the advertiser. Some websites may charge more for advertising on them, especially if they are high-traffic and visited by a lot of users and some advertisers are willing to spend more to run their ad over a specified period of time, depending on what they are advertising and which pages they are placing their ads.

Advantages and Disadvantages Of CPD

The advantages of CPD are:

No risk of ad fraud - Since advertisers pay a fixed amount of money regardless of the number of clicks or impressions, there is no risk of them being overcharged or having to pay for traffic generated that has little value for them, unlike other forms of advertising where advertisers are charged each time someone clicks through one of their ads and for every 1000 impressions.
It is instant - Advertisers only have to pay a one-time fee to place their ads on a website and they can then boost website traffic, but some websites may put a limit on the number of clicks or impressions their ad can receive before it is removed from their website.

The disadvantages of CPD are:

No guaranteed website traffic - Even though ads increase the chances of extra traffic to advertiser's websites, it does not guarantee any traffic, so advertisers could end up paying a lot of money and only generate a tiny amount of website traffic. This is different from PPC ads where advertisers are only charged if someone clicks through them.
It can be expensive - Depending on the type of website, placing ads on there, especially for longer periods of time can be very expensive. If advertisers don't know what they're doing, they could lose a lot of money.
Risk of scams - CPD ads are most common on websites that do not use an advertising network, such as Google AdSense. Instead, people directly advertise on their website. If someone applies to an unrealiable website to place ads on a website, there is a possibility of the advertiser paying money for ads that they never actually get on the publisher's website.

Example Of CPD Advertising

An example of CPD advertising where the advertiser pays for each day to place their sponsored content is Urban Dictionary on the word definitions. Each definition contains a banner that says 'Advertise here for $5/day'. Advertisers can submit their ad to Urban Dictionary and pay and it will then be placed for a specified period of time, between 1 and 10 days. The more days they place their ad, the more it will cost the advertiser.