Dynamic CPM fights its corner

By: Marketing Jul 13, 2017

Rachael Morris, Senior Account Manager at Infectious Media, explains the benefits of using a Dynamic CPM as the buying metric for your display campaigns.

Dynamic CPM can feel like a poor deal, giving you neither the guaranteed impression volume of the direct buy, nor the safety of a CPC or CPA deal.

However, we believe it can solve many problems seen by other metrics – let’s put it to the test:

 

Round 1: dCPM vs CPM
A flat CPM can seem like an attractive notion – impressions are basically unique ad views, so a fixed number of impressions means you’re guaranteed that a fixed number of people will see your ad, right?

Wrong.

As the growing focus of ad visibility suggests, one impression does not equal one view. Similarly, one impression does not equal one user. With this kind of buying metric, it is in the supplier’s interest to minimise the CPMs they are paying, allowing them to maximise their margins. This leads to high numbers of unseen impressions, with little or no regard to frequency or inventory quality.

With a dynamic CPM, there is no advantage to serving on cheap, poor quality inventory – your ads are more likely to be shown on more expensive, but better quality sites.

Winner – dCPM

 

Round 2: dCPM vs CPC
The logic behind a CPC buy is that, although performance isn’t guaranteed, you are at least generating interest and traffic, which may lead to a purchase further down the line.

Unfortunately, numerous studies have shown that clicker profiles are consistent across different campaigns and are rarely aligned with converter profiles. CPC buys will tend to encourage a focus on clicks above all else which, in practice, means delivery across gaming sites and other forms of inventory where accidental clicking is common.

Any campaign working towards a CPA goal will have no interest in driving non-converting clicks – campaigns bought on a dCPM model will also be able to afford to avoid the irrelevant clicks, focusing only on relevant users.

Winner – dCPM

 

Round 3: dCPM vs CPA
Of all possible buying metrics, CPA is probably the most attractive – you can’t lose out buying CPA, as you are only paying for those users who convert. What could go wrong..?

The answer to this will depend on your attribution model. Assuming you, like the majority of the advertising industry, are employing a last touch attribution model, you will quickly see your advertising budgets heavily weighted towards lower funnel activity such as search and retargeting.

More comprehensive attribution models can prevent this skew, going a long way towards alleviating the issue. However, it is likely that your partners will find themselves hamstrung; unable to test new strategies for fear that these may not immediately have the low CPA required.

A dynamic CPM, with a clear CPA goal, will allow this flexibility without compromising performance – if a campaign is seeing consistently poor returns, it can simply be paused.

Winner – dCPM

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