1st part – CPM or CPC, the first tough decision of RTB models

Save as PDF File

– 1st Part –

We all know that this decision is one of the most difficult to make at the beginning of the advertising process… So, which option to choose? We will go through both models in the next 3 articles and explain a bit from scratch so it will be easier for you to get all further information.

What is CPC ?

CPC stands for Cost Per Click meaning that you pay for each click on your ad/banner. In this model, you need to think about targeted clicks. It is known to provide less stress and requires less management as you will only pay for a potential conversion (a click).

How CPC works ?

A CPC bidding model takes two variables into consideration to give you your page view position, these are your bid and your CTR. After a determined period, your banner will have an eCPM that will give your impression position. The better your eCPM, the higher your position is. The formula for eCPM calculation is: (Ad Spend x 1000) / Ad impressions

How CPC works inside Traffic Factory?

Using our platform, your banner will be casted at positions 19 and 20 for a while. After a sufficient amount of impressions, it calculates your first eCPM. Then a new eCPM is calculated every “X” impressions. It might help to set a higher bid during the casting period to boost your eCPM.

CPC Strengths & Weaknesses?

CPC works as a long-term model. It takes a while to calculate the right page view position since banners need to be casted to generate their eCPM. Your budget is under control as long as you pay attention to your CTR! Your creatives and campaigns must be very precise and targeted and they have to fit your audience to give you the best potential of conversion.

CPC tips

  • Do not use strong CTR banners for CPC campaigns.
  • CPC is more adapted for Ad spots like footer and horizontal.
  • Avoid miss-clicks so you won’t miss your target.

to be continued…

GLOSSARY

RTB: Real Time Bidding.

CPC: Cost Per Click.

CPM: Cost per thousand impressions or technically Cost Per Mille.

eCPM: Effective Cost Per Mille. (Ad Spend x 1000) / Ad impressions

CTR: Click-through rate (CTR) is the number of clicks per one hundred impressions.