LEARN TO EVALUATE PROGRAMMATIC TOOLS

DorisRon

Member
Evaluation of programmatic inventory - whether it is banner, video, mobile advertising or advertising in social networks - can be much more difficult than it seems at first sight.

There are many pricing models, such as Cost Per Millenium (CPM), Effective Cost Per Mille (eCPM), Dynamic Cost Per Mille (dCPM), etc. We quite often get hung up on these models and do not even look at the price in terms of the effectiveness of advertising campaigns.

Nobody argues with the fact that all CPM-models are a great way to assess inventory value, but first you need to understand which tactics will lead to efficiency and profitability. Focusing only on the cost of inventory, without understanding if you get the money back, does not make sense. Your programmatic partner, the choice of whom, by the way, is too very serious, will tell you that you can do better by spending more or less. And you can (or rather, must!) make a lot of tests to ensure the establishment of contact with the right audience. But even if you do it right, it can be quite difficult to determine the reliable estimation model.

So what makes the price bind to the effectiveness so complicated? On the one hand, fixing your attention on one goal often means that you will not achieve any other goal, which can be no less important. For example, in video campaigns there is always an internal conflict between the coefficient of CTR and CPCV. Of course, you want the user clicked on the ad, but if the user has lost interest in it before the video ended, then the click will not most likely make you good.

Consider the example of a company that intends to reach a certain audience, limited to the cost per thousand impressions in five dollars. At the same time a publisher or a social network can set the maximum price of $ 1.9. Of course, reducing of CPM can not but rejoice. After all, who among us does not like to bargain prices? But if you are aiming to purchase more premium inventory, low value of CPM is unlikely to help you get closer to your goal. Focusing on a lower price, you can easily ruin the whole campaign.

Let's take another example. The brand has decided to use the model vCPM with guaranteed visible impressions. The main task is to ensure the brand awareness and loyalty of users to it. That is why the advertiser does not want to spend money on the inventory, which the user had not even seen. However, many set a certain price level, but want to buy quality inventory. A higher price would give better results, but the CPM restrictions do not allow to justify the hopes of the advertiser.

As you can see, good price is not everything. In digital advertising, you only get what you paid for.

So what kind of pricing model are you using? Are you more focusing on the cost than on the end result? Just remember that while you do not know how effective your ads are, you can not be sure that you pay the best price.
 
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