W5 L1 Flashcards
CPV-CPM
: Cost Per View or Mille you pay for each or / every 1,000 views
CPT
Cost Per Time you pay per time unit, e.g. day
CPC
Cost Per Click you pay if someone clicks the ad
CPA
: Cost Per Acquisition/Conversion you pay if one clicks the ad & buys your product
RTB
: Real Time Bidding real time auction: mostly based on CPC (can apply to all above)
Cost per Impression (View or Mille)often measured by
CPM (cost per thousand impressions)
for who is CPM de best choice and why
- From the publisher’s perspective, CPM is the best choice because of the predictable revenue and measurable results.
where do you use cpm/cpv usually for?
CPV/CPM are useful for getting more people are aware of the new brand or a specific product. They do not guarantee/monitor ad performance.
which pricing model is often lowest cost?
cost per impression
advantage of cost per action compared with cpm/cpv
proof user takes the action
why is cpc populair?
CPC is popular because mostly found as nicely balanced between cost and the trackability (by clicks)
formule cost per sale
CPM/1000 * 1/CTR * 1/CR
quality score and cpc
Websites with a higher/ above-average Quality Score gets a discount on their CPC – the opposite applies for those with a below-average QS
CPM is agreeable if the only (and mere) objective is to
o create awareness for new products or campaigns (i.e. Branding)
CPC is often used when the objective is to create/measure
creation of an “interest” by the ad – and not necessarily selling the product.
- CPA is agreeable for a
a heavily conversion oriented ad with relatively (very) high “click/ conversion”” ratio
what ) is the industry standard in online ad pricing.
y Real Time Bidding (RTB)
Each ad-space or SEA # position is valued/priced according to
its actual through and demand-supply equilibrium (via bidding)
Google uses variants of so-called “second-price auction”
The buyer does not have to pay highest bid but only that of the next highest bidder
Why would’t Google simply want to get the meximum bid offered by the highest bidder?
Collaborative Game Theory The answer is to prevent over/underbidding and to find the real value of each ad space (Game-Theoretic Proof)
Firms make decisions on whether: they target all customer base with same message (mass – which is no longer common nowadays) or:
2
1 Segments: targeting to certain segments (with multiple messages) – less cost than individualization
2 One-to-one: individualized (personalized) targeting for each customer: possible through big-data & analytics
Personalization Levels: Segmentation Not fully indivudualized personalization
different offers, limited in number, are tailored to certain number of segments
Personalization Levels: Full Indivudualization Users get individualized (tailored) offers, ads and communication messages based on their:
Purchase, Search, Browse history
* Their likes, hobbies, interests and lifestyles
* Location, demographic and life-cycle characteristics
E cart targeting backfire
Customers who received an early ECR ad within 30 minutes to one hour after cart abandonment are less likely to make a purchase.In other words: too-early ECR ads can engender worse purchase rates than without delivering them, thus wasting online advertising budgets