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Paid media

Understanding paid media

Navigating the world of paid advertising can be a little daunting, with so many terms and phrases, it can be a challenge for the small business owner to know where to start.

A good starting point is to first understand what paid media is so when you’re online searching for information on what tools are best for your business, you know what you’re looking at and if it will be a good choice.

Let’s start by explaining what paid media is.

'Paid media’, also know as ‘online advertising’, ‘internet advertising’, ‘online marketing’ or even ‘web marketing’ is a form of advertising or marketing that uses the internet to deliver paid promotional and marketing messages to your target audience, either via their computer, smart device (tablet or phone), or app.

The most common examples of paid media are:

  • Display or banner advertising: These are paid advertisements (advertisements or video content) that appear in search engine results pages (SERPs) or in the boxed areas on a website.
  • Paid search and Search Engine Marketing (SEM): a highly effective medium, uses paid advertising to boost website visibility within search engine results pages (SERPs).

Pricing methods

There are many ways pricing is calculated for your paid media. Two of the most popular are cost per thousand impressions (CPM) and pay per click (PPC):

  • Cost per thousand (CPM): This method is used when your advertisement is exposed on a web page to your target audience (per thousand). Rather than call it CPT, cost per thousand, CPM comes from the roman numeral symbol ‘M’ which means 1000. CPM is a good way to gain awareness for your products and company.
  • Pay per click (PPC): is an increasing trend in online advertising used to drive traffic to your website. There is increasing popularity around this approach because it is a way of buying visits instead of obtaining traffic in an organic way (occuring without having to pay).

For small business owners, on a tight budget, PPC is a great option to choose as it gives you the exposure that CPM can offer, but you only pay when the target clicks the ad. Read more about advantages and disadvantages of PPC and CPM on this comparison chart by Social Compare.


Traffic sources are different types of sources that direct ‘traffic’ (the internet user) to your online store. Many of you would have clicked on a Google Adword or even a social media ad in the past that has then taken you to a business’s website.

Think about what traffic sources have you engaged with in the past seven days while using the internet? HINT: There is a list of traffic sources in the related links to help you.

Post your responses to the Comments area and observe the more frequently used sources mentioned by other learners.

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This article is from the free online course:

Online Business: Digital Marketing for Success

RMIT University