You can't always optimize against a low CPM

By Published on .

With the commoditization of online display media, the process is somewhat predicative. A media buyer decides on a particular website he wants to advertise on, a price is negotiated, the campaign launched and then the call comes in. The buyer places a request for the media seller to optimize the campaign to improve performance.

For the majority of direct-to-publisher buys, the only metric the media seller often has to work with is the click-through rate. The media buyer, of course, often has a wide range of backend metrics, ranging from conversion to engagement, but these are typically not data sets the publisher has access to. Even if he or she did, they are unlikely to correlate with specific areas within the media property.

The only real optimization lever they have at their disposal is specific click-through rates based on the various sections and page placements of their websites. While this manual optimization often can produce some positive results in the short term, the built-in logic must consider a wide range of factors, and click-through rate is not one of them.

But the CPM of the campaign is.

At a basic level, ads which serve early on in the user session and reach a wider audience often have a higher click-through rate. Conversely, ads which serve several page views into a user session and have increased frequency against the same user witness a decrease in response rates.

This is one of the reasons buyers try to purchase media with a frequency cap of 3x per 24 hours per visitor. It helps to create a higher priority level in the ad server while reducing over-exposure to the same person.

Each publisher ad server has a unique logic and weighting system which assigns priority to the various campaigns. Geo-targeting, day-parting, demo-targeting, impression delivery goals and frequency capping all add weight to a campaign directing order of delivery. But the actual CPM of a campaign is also a weighting factor. The actual CPM used when setting up a campaign seems to always draw the greatest, and when combined with any other factors ultimately dictates delivery order.

While an ad server typically has a prioritization setting for each campaign they are often deployed at a very broad level and in groupings such as house ads, ad networks and direct buys. It is rare that a specific advertiser would receive a custom weighting or prioritization within an ad server since this tends to cause any number of delivery issues for the publisher traffic team.

The sophistication and knowledge of the traffic and campaign management team in managing their ad server also plays a significant role and can vary greatly from publisher to publisher. When purchasing media from specific websites, take time out to understand which ad server they use, how many active advertisers they have versus ad networks, and the level of priority they give direct buys versus their ad network partners.

Then negotiate your CPM.

A low CPM which places you at the bottom of their direct buys, but only one step above the ad networks filling remnant inventory, may deliver response rates that can’t be optimized out of.

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