Starting with a CPC Pricing Model: Structure and Key Concepts
To effectively start working with a Cost-Per-Click (CPC) pricing model, it's crucial to evaluate and measure the effectiveness of your offer. This evaluation process involves a dedicated Testing Period to gather data and make informed decisions about your campaign’s performance.
Key Considerations:
Minimum CPC
The minimum click cost (CPC) across all GEOs is $0.001.
Test Budget
The test budget is allocated to cover the expenses incurred during the testing phase, especially if the cost of clicks does not cover the traffic cost.
Recommendation: Set your test budget based on prior experience and the traffic volume for the selected GEOs. If the selected GEO has a large traffic volume (for example, IN, PK, BR), it is better to set a higher test budget to be able to test more zones and, as a result, get more traffic.
Note: The minimum test budget for a CPC campaign is $5.
Understanding Tests:
To evaluate the effectiveness of your campaign, a specific amount of traffic is sent to your offer, and the results are measured. The Test Budget is used to purchase traffic. A special algorithm will be applied to calculate an optimal bid for each specific zone.
Tests can be categorized as:
Free Tests: Where the overall cost of received clicks exceeds or matches the traffic expenses.
Compensated Tests: Where the cost of received clicks is lower than the traffic expenses, and the difference is compensated from the test budget.
On the Dashboard, you can see what the current test cost is, as well as separate costs for the zones that work according to their own eCPM. For this reason, you may see a campaign that is in the test with a cost that exceeds a previously set test budget.
Test Example:
Campaign A – Free Test
Test Budget: $10
CPC Rate: $0.50
Clicks: 25
Total Click Cost: $12.50
Result: Since $12.50 exceeds the $10 test budget, you only pay for the clicks.
Campaign B – Compensated Test
Test Budget: $10
CPC Rate: $0.25
Clicks: 20
Total Click Cost: $5
Result: Since $5 is less than the $10 traffic cost, the remaining $5 is compensated from the test budget.
Testing Zones and Traffic Sources:
Self-Optimization Function: The system optimizes the campaign based on performance, automatically excluding zones that do not generate clicks.
Effective Cost Per Mille (eCPM): Once a zone generates clicks, an eCPM is calculated, and the system continues to buy traffic from this zone based on its specific eCPM.
eCPM Calculation Example:
eCPM = (Click cost * Total number of Clicks / Traffic volume) * 1000
Click Cost: $0.50
Clicks: 10
Traffic Received: 10,000
eCPM = ($0.5 * 10 / 10 000) * 1000 = $0.5
End of the Test Period:
A test ends once the campaign has received traffic equal to the test budget. The system will then evaluate the results and assign the Working status to the campaign.
Test Duration: The length of the test depends on the test budget and the volume of traffic available in the selected GEOs. The test can last up to 2 days for the banner, push notification, video pre-roll, and Instant text message.
Campaign Modifications: During the test, you cannot modify the targeting settings. However, you can adjust the CPC rate, and the campaign will continue without requiring a re-test.
Purpose of the Testing Period:
Campaign Optimization:
Zones that perform poorly are automatically excluded from the campaign.
Allows you to create blacklists for future campaigns.
Traffic Selection:
Focuses on purchasing more traffic from high-performing zones.
eCPM Formation:
Helps calculate an eCPM for each zone, enabling more efficient traffic purchasing beyond the test period.
The testing period is essential for forming the right traffic purchasing strategy. The more traffic a campaign receives during the test, the better it can optimize for high-performing zones, improving the overall effectiveness and efficiency of the CPC model.
Important Notes:
Targeting Changes: If the campaign’s targeting is changed, it will undergo moderation again, and the test period will be reset.
Test Pause: Stopping a campaign during the test phase will prolong the testing period, and the test will resume from where it left off when restarted.