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

In digital marketing, ad campaign performance measuring is often ends on a simple: how well did my campaign perform in terms of its CPC?

This is especially true for smaller and medium sized brands that can’t afford big branding campaigns which are ideally optimized for CPM or CTR.

SMEs usually aim for an optimized CPC value. This means that their goal is to identify and target an audience that would click on their ads and land on their website to learn more.

The programmatic algorithm will optimize ad campaign performance to reach as many devices as possible to increase the click rate. But it will also consider that these clicks ideally do not lead to your programmatic buying cost explosion.

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.

Suppose you narrow down the targeting by audience interest. In that case, the available inventory is limited and, in addition, is rather expensive, leaving you with bad performance results because bids won’t be won and ads won’t be 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 click rate of 0.15% (average of 1.5 clicks, leaving a total cost of €0.20 per click).

If we also apply Audience targeting, we would need to bid 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 to optimize your ads for the best performance results.

How to improve your performance results?

If you know your audience group and are willing to spend more for your click, it makes sense to optimize your CPM campaign and further narrowing your targeting for CTR on audience interest, age, gender, location, etc. The overall campaign results often prove to be better (at least equal) to campaigns optimized for CPC. But besides, it will match you with potentially interested clients for your products or service.

Besides, optimizing your campaign for CPM instead of CPC makes sense if you aim for branding AND click altogether.

Want to learn more?

Contact us to find our how better optimize your campaign.

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