What Is eCPM and How It Impacts How Much Traffic Your Campaigns Get
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The most common phrase that account managers hear from our clients is “Give me more traffic!” Understandable as it is, this request is not as simple to fulfill as people might think.
In an ideal world, each account manager has a magic tap with traffic on their desk which they open up upon request.
Unfortunately, our world is far from ideal and traffic doesn’t come from a tap on your manager’s desk. To get more of it for your campaigns, you’ll have to dive into technical details and find out what really impacts the volumes.
One thing that directly affects the amount of traffic you get is a thing called eCPM.
Briefly speaking, eCPM is the real bid for which you’re buying your impressions and clicks. The higher it is, the more traffic you’ll get. However, it’s not always possible to set it directly — it depends on various parameters based on what bidding model you choose.
So, in this post, we want to take a moment to explain what eCPM is, how it’s calculated for each bidding model, and how you can impact it to get more traffic.
The ad rotation in PropellerAds and what eCPM has to do with it
In PropellerAds, we monetize every impression. It means that all impressions are going to be bought by someone. If one advertiser doesn’t buy an impression, another one will. That’s the main principle of our rotation mechanism.
Who is going to buy the impression is determined on an open auction. Every active campaign that is launched on a certain slice takes part in it and competes for impressions.
What is a slice, by the way? In short, it’s a combination of ad zone + GEO + platform..
The advertizer who places the highest bid wins the auction and gets the impression. Whether it’s going to be you depends on your eCPM. If your eCPM is the highest — you’re going to win the auction.
So, what is eCPM?
eCPM, or effective CPM, is an actual bid for which you’re buying impressions on an auction while competing with other active campaigns. It’s calculated differently based on the bidding model that you have — CPM, CPC, SmartCPM or CPA Goal 2.0.
But the general rule is: the higher your eCPM, the more traffic you’ll get.
And now let’s find out how eCPM is calculated for each bidding model.
CPM
This is the simplest option. When working on CPM, your eCPM rate is equal to your CPM which you set at the launch of the campaign.
eCPM = CPM
For example, your CPM bid is $1, that is, you pay $1 for each 1000 impressions. This means that your eCPM is also $1.
To get more traffic, you can either increase your CPM, thus, having a higher eCPM, or expand your targeting settings.
CPC
Here, it’s slightly different from CPM. With CPC, your eCPM depends on your CPC bid and the CTR of your ads.
eCPM = CPC * CTR
If your ads have low CTR, then even with a high CPC bid your campaign won’t be getting too much traffic.
So, to get more traffic, you can either increase your CPC rate, or make your ads more clickable (that is, improve their CTR). But the best option is to do both, just to be sure.
SmartCPM
Here, things are a bit more complicated than with CPM or CPC, but surely graspable.
So, first of all, let’s look at how SmartCPM works.
The first thing that you need to know is that SmartCPM is “a second-price auction”. Let’s look at an example.
Let’s say you have a SmartCPM bid of $4. With it, you’ll be able to buy out slices that cost $4 and less. But some of the slices cost significantly less than $4 — $3, $2 or $1 etc. To buy them out but save your campaign from overspending, the SmartCPM model does the trick. It finds the highest bid on the zone and ads a certain delta value to it. This way, it will allow you to buy out the traffic without worrying for the competition.
This delta equals $0.03 multiplied by N, the number of active SmartCPM campaigns in rotation.
eCPM = max CPM + $0.03 * N
In this case, your eCPM equals the maximum bid on the slice plus a delta, if altogether it doesn’t exceed the amount of your SmartCPM bid.
So, how do you get more traffic in this case?
You can try increasing the SmartCPM bid so that the model can buy more zones and reach the ones that are more expensive and rich in traffic.
Tip: If SmartCPM doesn’t allow you to buy out the traffic from particular zones, fix your CPM rate and run a plain CPM campaign deliberately on the selected zones.
CPA Goal
If you’re not yet familiar with how our CPA Goal 2.0 model works, we’re highly recommending you to check out the recording of our webinar on CPA Goal 2.0 with Yakov Becker and Sergei Kozlov).
So, on CPA Goal 2.0 the eCPM depends on your conversion rate, that is, how well your campaign performs, and the size of the bid. If you’ve seen the webinar, you know that the CPA Goal 2.0 model actually bids by CPM, just does that based on how well a particular slice performs for your campaign.
eCPM = CR * bid
The model sets the bid dynamically so that altogether you could reach your desired conversion price (or CPA goal, thus the name).
What can you do to increase the eCPM here?
The system controls the size of the bid so that you buy only the best-performing impressions (and now clicks, too — CPA Goal is in beta for Push notifications!). But there are still things that you can do:
- Increase your CPA goal. This way, you’ll allow the system to buy out more expensive zones with more traffic. In this case, you need to relaunch the campaign for better results.
- Expand your targeting settings. It’s possible that the targeting that you’ve chosen is too narrow for your campaign and the system simply can’t find enough converting zones for your ads.
- Improve the CR of your landing page: improve your creatives, revise your conversion flow, etc.
Summing it up
Let’s quickly recap how eCPM is calculated with each bidding model and how you can increase the amount of traffic you get.
| Bidding model | eCPM formula | How to get more traffic? |
| CPM | eCPM = CPM | Increase the CPM bid. Use broader targeting settings |
| CPC | eCPM = CPC * CTR | Increase the CPC bid. Improve the CTR of your ads |
| SmartCPM | eCPM = CPM + $0.03 * N | Increase the CPM bid. Fix CPM for particular zones |
| CPA Goal 2.0 | eCPM = CR * bid | Increase the CPA goal. Use broader targeting settings. Improve the CR of your landing page. Revise conversion flow |
Got questions? Drop a line to our Support team and come watch our webinars — lots of interesting things going on there or simply join our Telegram chat.
