I'm constructing an online start-up and I'm not completely sure of the best possible online advertisement pricing model. Should I use the Cost Per Thousand Impressions model, the Cost Per Click model, or should I just allow some online advertising giant to take care of it for me (like Google Adsense, for instance)? If so, which one of those online advertising giants is best?
Actually, the best online advertising model would be to have more than one ad network. Having more than one can help your fill rate. For example, if an ad network runs out of relevant well-optimized ads or has a server error, you'll be out of luck. If you google "bad fill rates," you can see that many people use this strategy. This blog post illustrates the point by using iAd and AdMob.
It's hard to say whether CPM or CPC is better since each site has different stats and demographics with different behaviors.
Additionally, since ad networks use various optimization methods, you'll be able to see which ones serve your visitors better (and that would help raise your CTR) if you have more than one.
So if you're set on going with a giant, consider leveraging it sometime with another ad network.
I believe you also have the CPA model, where you get paid for an actual action (signing up to a newsletter, making a sale, etc.) and not just for clicks.
This is a personal impression and I may be wrong, but it seems like CPC lost its importance, at least in the affiliate marketing industry -I got this idea from the book "Affiliate Program Management: An Hour A Day", which also explains the differences between CPC and CPA in more detail.
More than investing money for advertisements and buying external resources to promote your start-up, I would recommend you to make your website SEO ready first. If your website is Search Engines friendly then you can achieve good results and traffic by employing minimal efforts and without investing a single penny.
Regarding CPC and CPM, personally, I believe they generate quick traffics but most of the clicks and leads are junk and not targeted what-so-ever. The ROI is always questionable in this model. And instead of buying promotion services from a 3rd party agency; why don’t you hire a dedicated SEO or online marketer who will be devoted to manage promotional campaigns of your website and products only? It can ensure the best possible ROI and you can track or improve every bit of his/her marketing efforts.