The dream of optimizing for CPC – let’s face reality

In Marketing, performance measuring it often all comes down to judging your campaign performance by: how well did my campaign perform in terms of its CPC? Especially for smaller and medium sized brands that can’t afford big branding campaigns that ideally are optimized for CPM or CTR.
Smaller brands usually aim for an optimized value of CPC meaning they aim for customers that click on an advertisement that will lead to their website.
The algorithm in programmatic optimizing will optimize the campaign performance to aim for as many people as possible clicking an advertisement. But it will also consider that these clicks ideally do not lead to cost explosion of your programmatic buying.

Narrowing your audience group for CPC campaign goals

In programmatic advertising, advertisers will be restricted to available inventory. As mentioned above, CPC will be ideally purchased at a low price, meaning they will be placed in ad spaces with less viewability or in apps that are less frequently used. If you narrow down the targeting by audience interest the available inventory is limited and in edition rather expensive, leaving you with bad performance results because bids won’t be won and ads are not displayed.

Let’s underline our statement with an example:

We buy CPC in available inventory at a low price and have a deeper click rate in comparison to a campaign bidding on advertisement space that has been optimized for CPM. The CPC campaign will cost €0.30 per 1’000 impressions with a clickrate of 0.15% (average of 1.5 clicks leaving total cost of €0.20 per click).
If we also apply Audience targeting we would need to buy on expensive inventory. The CTR will probably be around 0.4% but the campaign will cost €5.00 per 1’000 impressions leaving the customer with 4 clicks for €1.25.

It is important to know the programmatic advertising system in order to optimize your ads for best performance results in mobile advertising

How to improve your performance results by using different campaign goals than CPC

If you know your audience group and are willing to spend more for your click, it makes sense to optimize your campaign for CPM with further narrowing your targeting for CTR on audience interest, age, gender, location etc. Often, the overall campaign results prove to be better (at least equal) to campaigns that are optimized for CPC and it will leave you with potentially interested clients for your products or service. Optimizing your campaign for CPM instead of CPC makes also sense if you aim for branding AND click all together.

Best practice example

We would like to share insights of a CPM campaign that we ran in December 2018 for one of our larger clients.

The Branding Campaign had overall key performance figures such as:
Impressions : 2’322’857
CPM : $ 7.0142
CTR: 0.29%
CPC: $ 2.4508

The CPC Campaign had overall delivery of
Impressions : 27’496’852
CPM: $ 1.145
CTR: 0.14%
CPC: $ 0.63232

For more detailed campaign reporting

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