This article was updated on the 2nd of October, 2023 due to accuracy reasons.
One of the crucial steps in setting up an ad campaign is choosing a bidding model. Of course, if you enjoy burning money, you can skip this step and follow your intuition.
But for those of you, who sees ad campaigns through “Financial glasses,” we’ve prepared a detailed post about pricing models — what’s the difference between them and which one is best for your Push Notification campaign.
As you probably know, for Push notifications campaigns, PropellerAds provides four bidding models: CPM (Cost per “mille” or 1.000 impressions), CPC (Cost per click), CPA Goal, and SmartCPC.
Today, we will explain how they work and help you understand which one is better for your campaign.
What’s the difference between CPC and CPM?
Let’s start with this pair of models, since differences and similarities between them frequently become a source of confusion.
With CPM, you pay for the number of times your ad is shown. The payment is fixed regardless of how many visitors clicked on your ad.
With CPC, you start with traffic optimization, where all of your creatives are tested for an additional fee, which depends on your targeting settings (this takes about 8 hours). Later on, you spend your campaign budget only on impressions that lead to clicks.
When a user clicks on your ad, they’re taken directly to your website, where they can be converted into a customer. If you get customers, your investment will be valuable. It’s easy, isn’t it? But does that mean that CPC is the best option? Not necessarily. Why? Let’s sort this out.
How to calculate the cost per visitor
No matter what price model you choose, your constant aim is to get to target audience. To do this, you need a strong creative that can drive attention to your offer. The choice of ad format plays an important role here as well. For instance, Push Notifications generally have a higher CTR than conventional ad formats.
PropellerAds offers competitive prices both per visitor (click) and per thousand impressions on the market.
Its minimum CPC is only $0.001, and minimum CPM is $0.01. Suppose that you buy the traffic for this price. In this case, let’s see what you can get for $10.
If you’re working with the CPC model, the bid is the only thing that affects how much you pay per visitor.
So, you have $10 and with a minimum CPC bid of $0.005, you receive 2000 visitors.
When you’re using the CPM model, the number of received clicks depends on both the bid and CTR.
If CTR of your Push Notification ad is 2% and the CPM bid is $0.01, you get 20000 visitors for the same $10. In this case, the CPM model has proved to be ten times more profitable than the CPC one!
Please mind: as a rule, CPM model is not connected with too high CTRs. And the calculations above stand for a rough example.
Top tip: Suggested Bids and Traffic Estimator
For advertisers who prefer CPC or CPM, but are not sure which bids to choose, we have a helpful tool: bids suggestion. In short, our system recommends the optimal bids to place for your specific campaign settings. Just type yours and get a pop-up tip:
Also, make sure to pay attention to a Traffic Estimator on the right to see if there is enough traffic for needs at the moment:
Remember: if you still have questions about the best bids to choose, you can always contact your manager or our support team.
What makes SmartCPC smart? In general, it doesn’t require any manual work from you. It was created to help you set a campaign quicker, optimize zones and other parameters automatically, as well as get bigger profits for fair costs per click.
Here is how it works:
- You set the maximum bid you are ready to pay for click
- The algorithm uses dynamic price per click that depends on numerous parameters, including ad placement, user activity and “newness”, as well as a range of technical parameters. As such, you pay fair traffic price
As a result, you don’t have to search for the right bids manually to avoid over-bidding, since SmartCPC will do that for you.
You don’t have to do any calculations and try to define which bid suits a particular zone, because this pricing model will do the work for you.
SmartCPC works best for those who want to create multiple campaigns for one offer and rely on User Activity targeting and other parameters.
Probably, the most popular pricing model among our partners, CPA Goal is another advanced tool to get quality conversions at the desired price possible. The pricing model is based on machine-learning algorithms that predict what slices of traffic are the most suitable for your offer.
What is the traffic slice? Here is an example:
Zone + GEO + OS + Creative
And here is how it works:
- You set a desired conversion rate
- Each of your creatives gets tested
- During the test (24 hours), campaign receives traffic based on costs attributed for each zone
- After the test, campaigns get billed by clicks, based upon determined CR
- The slices where the CPA Goal is successfully met, get more traffic and those where it’s exceeded are managed to get reduced traffic amount. It’s done to see if they will bring you money a bit later, but they are excluded if time shows their inefficiency, so that you don’t pay for non-efficient zones
In Push campaigns with a CPA Goal pricing model you are charged by clicks. This means that you don’t pay for ad showing, but for users’ actions only.
In addition, with CPA Goal on Push, you can also collect audiences based on clicks for your further retargeting campaigns.
What do we conclude from that?
The CPC model brings, undoubtedly, more predictable expenditures. No surprises here. You always know the number of clicks you can get with your campaign budget.
Work with CPM is riskier, but often much more profitable. Basically, it comes down to your creatives. If you use high performing creatives, you will get good results at a cost-effective price point.
SmartCPC and CPA Goal are models for auto-optimization. Budget control and zone management done without your manual efforts will not only save your time, but also minimize chances for omissions and potential mistakes (which is especially important for the newcomers).
|You pay for
|-Testing multiple campaigns
And whatever model you choose, make sure your creatives bring high CTR. Always test variations of your Push notifications, analyze their CTR and make changes to improve it!