How to choose a pricing model in Online Advertising
Are you an Advertiser looking to maximize your campaign reach? Then you are probably wondering, ‘Which pricing model should I use for my advertising offer?’ In this article, we will look at how to choose a pricing model in Online Advertising and compare the pricing models available for online Advertisers. Read on to learn what are the available pricing models in online advertising and how to make the most out of your campaigns with the right pricing model.
What are the available pricing models in Online Advertising
When it comes to pricing there are 6 options available on ExoClick’s network. This includes CPM, Smart CPM, CPC, Smart CPC, CPV, and Smart Bid. So let’s take a look at what are the available pricing models in online advertising and what each option means for your advertising budget.
#1 CPM (Cost Per Mille)
CPM allows you to pay for every 1,000 impressions. This is a great option for Advertisers looking to get their brand out there and to increase awareness with target groups.
Which ad formats are available with CPM? CPM is available on Banner ads (ll sizes), Popunders, Fullpage Interstitials, Native ads, Push Notifications, and Video ads.
#2 Smart CPM
Smart CPM: This pricing model is also based on impressions but uses an automated bidding strategy based on machine learning in order to optimize your bids based on your specific campaign goals.
Which ad formats are available with Smart CPM? Smart CPM is available on Banner ads (all sizes), Popunders, Fullpage Interstitials, Native ads, Push Notifications, and Video ads.
#3 CPC (Cost Per Click)
CPC: If you are interested in creating a conversion campaign, CPC is a good option because as the name suggests your campaign is charged per ad click, helping you understand exactly what you’re spending on each click on your ads, making a great format for retargeting.
Which ad formats are available on CPM? CPC is available on Banner ads (all sizes), Fullpage Interstitials, Native ads, Push Notifications, Email clicks, Tab/Direct Link, and Video ads.
#4 Smart CPC
Smart CPC: Similar to the other Smart options, this pricing model uses machine learning to help Advertisers get the most out of their campaign based on conversion goals. Smart CPC is exclusively available for Members Area.
Which ad formats are available with Smart CPC? The formats available with the Smart CPC model include Email Clicks and Direct Links campaigns.
#5 CPV (Cost Per View)
CPV: This pricing model is only available on Video campaigns and as you set the price you will pay for each view on your ad. A view is counted when at least 10 seconds of the ad have been viewed by the end user.
Which ad formats are available with CPV? In-Stream, Outstream, and Slider. Not available on In-Video Banner and Video Banner.
#6 Smart Bid
Smart Bid: This is a machine learning model that focuses on maximizing impressions while keeping costs under control. It is important to remember that for this model to work best you will need to keep the campaign targeting open for about 30 conversions so the algorithm can learn about the audience interested in your offers before optimization.
Which ad formats is Smart Bid available on? Smart Bid is available on all ad formats on ExoClick’s network.
#7 The Bidder
The Bidder allows you to automate the optimization of your campaigns by adjusting your bids by ad zone and blocking non-converting ad zones. It works like a smart assistant and has 2 functions:
- Automatic Bidding: This lets you automatically adjust (up/down) your CPM/CPC bids according to your target CPAs. The Bidder will also automatically blacklist ad zones that haven’t converted when your maximum test budget is reached.
- Rules: Allows even further campaign optimization by letting you create your own rules to block ad zones, browser, country, devices, language, mobile carrier, OS and site, based on the rules you set for CTR, Click, Conversion or ROI. You can add as many rules as you like to fine tune the algorithm.
Which ad formats is Smart Bid available on? The Bidder is available on all ad formats on ExoClick’s network.
Here is a breakdown of the ad formats available and the corresponding pricing models.
Pricing models compared: Which pricing model should I use for my advertising offer?
When wondering how to choose a pricing model in Online Advertising it is important to remember there is not one specific pricing option that will bring you the best return on your investment. It depends on your conversion goals and campaign specifications. So, it is important to pick a pricing option based on your particular CPA goals. Let’s compare the pricing models available for online Advertisers:
CPM:
This option is great for Advertisers who deal with high volumes or want to capitalize on our large audience after testing their campaign. When it comes to CPM, it’s crucial to regularly optimize your campaign while it’s running. It’s also essential to consider your ad creatives, landing pages, and ad text, as you’ll be charged regardless of whether they click your call to action.
TIP! Create high quality ad creatives! The higher the quality of your ad, the more likely you are to convert your offers, meaning that you get the best return on investment.
Smart CPM:
If you want to outbid your competitors without going over your budget, give Smart CPM a try. It’s always optimized and automatically tries to outbid your competitors without exceeding your budget. For example, if you’re willing to pay up to 1 euro for ad placement and your nearest competitor is only willing to spend 70 cents, you’ll win the bid for less than your maximum amount.
TIP! Monitor your campaign performance daily or weekly to identify trends and opportunities for improvement.
CPC:
Advertisers testing new ad creatives and ad text will only pay per click with this option. Therefore, if you are promoting a new product or trying a new ad format, CPC can be a great way to learn about your audience and control your budget. This way, you make sure that you don’t overspend resources on an ad format or product, or a combination of both, that doesn’t fully work. Because you only pay when someone clicks, this pricing model could work very well for retargeting campaigns.
TIP! Understand Quality Score: Quality Score is a metric that explains how relevant your ad is and how it’s ranking. It can be a good idea to learn how Quality Score is calculated and how it affects your ad rank.
Smart CPC:
This model works similarly to CPC but is only available in the Members Area. It can be a good way to test traffic because with CPC there are fewer impressions. CPC is also a great option for Advertisers looking to optimize their campaigns as you will see if your ad creatives and texts are enticing end users.
TIP! If you notice a decrease in clicks, consider switching to CPM. The audience in the Members Area is already interested in your offers and is highly exclusive. Therefore, reaching a larger volume may be a better strategy to increase your campaign’s success.
Smart Bid:
If you are trying to promote a new product, have a full inventory, or have just started using a new ad format, Smart Bid can be another great option for you. When it comes to a full inventory of ads it can be hard to keep track and ensure your bidding strategy is optimized at all times. With Smart Bid, the bids are made automatically which will help you find which of your campaigns convert the best. This is also a great option for Advertisers with multiple campaigns running simultaneously on multiple ad zones as your bidding is automatically optimized for you!
TIP! A question to ask yourself when using Smart Bid and setting your campaign goals is ‘What is the maximum I am willing to spend on my campaign and ‘What is my CPA goal?’.
The Bidder:
This works on all ad formats and the main benefit to it compared to Smart Bid is the fact that you can add rules to your bid. If you only want to bid on placements with a minimum of 1,000 views you can do so with the Bidder.
TIP! Use the most simple conversion event for Automatic Bidding Optimization. This will allow your bidding algorithm to gather the most amount of conversions and it will quickly start optimizing your campaign
CPV:
Even though CPM and CPC are also available for some Video formats if you want to make an impression on your audience with Video ads and ensure that your Video campaigns are working, CPV is a great option. This is not only because it is a bidding price especially tailored for Video formats, but also because you will be sure that the end user will have seen at least 10 seconds of your ad.
TIP! Aim for videos that are short and to the point, as viewers may lose interest in longer content. Which would make them click off before you have had time to make an impression, or make them remember your brand.
Conclusion: How to choose a pricing model in Online Advertising
Now that you know the pricing options available in online Advertising, you can apply what you have learned to your campaigns. Experiment with pricing options based on your KPIs and if you need further assistance or advice contact our Customer Success team, who are available 24/7, or your Account Manager for additional information.
If you are not using ExoClick for your campaigns, sign up now! When you sign up to ExoClick you will get full access to our exclusive features, a large range of ad formats, and a Network of hand-selected Publishers! So what are you waiting for? Try it for yourself today!
