Learn about the eCPM calculation formula of information flow advertising in one article

Smart bidding is the most important customer acquisition and bidding method in the information flow industry.

It includes ocpc, ocpm, ocpa, and cpa, which are all bidding methods automatically optimized by the system based on the conversion situation . It is generally divided into two stages. The first stage is the data collection stage, according to the normal cpc/cpm bidding, and the second stage automatically floats the bid according to the conversion traffic. (Some platforms have cancelled the first stage, but they will still have the first stage by default)

For example, 1, 2, 3, 4, 5, you target 5 visitors, CPC will bid for each visitor evenly, no matter which visitor converts well. If 2 and 3 convert, OCPC will help you find similar groups of people based on the tags of 2 and 3, and increase the bid. 1, 4, 5 will lower the bid.

The traffic distribution mechanism is mainly: CPM>CPC>OCPM>OCPC>CPA . So how are the bidding rankings among different bidding methods determined?

1. CPM (full name: Cost per million) is paid per thousand impressions. CPM is a type of paid display advertising. As long as the advertiser's advertising content is displayed, the advertiser will pay for it.

01. eCPM = CPM bidding

For example: Ad A, the bidding method is CPM, and the bid is 9, then its eCPM is:

eCPM=9

02. Impression billing = next eCPM + 0.01

2. CPC (full name: Cost per click) is charged by click. CPC is a pay-per-click advertising, and charges are based on the number of times the ad is clicked.

01. eCPM = estimated click-through rate * target click bid * 1000

For example: Ad B, the bidding method is CPC, the bid is 0.89, and the estimated click rate is 0.9%, then its eCPM is:

eCPM = 0.9% * 0.89 * 1000

=8.01

02. Click billing = next eCPM / (your estimated click rate * 1000) + 0.01

3. oCPM bidding (target conversion bidding)

01. eCPM = estimated click-through rate * estimated conversion rate * target conversion bid * 1000

For example: Ad C, the bidding method is OCPM, the second-stage bid is 78 (OCPM does not have the first stage), the estimated click rate is 1.2%, and the estimated conversion rate is 1%, then its eCPM is:

eCPM = 1.2% * 1% * 78 * 1000

=9.36

02. Impression billing = next eCPM + 0.01

4. oCPC Bidding

The oCPM and oCPC bidding rankings here are the same.

Click billing = (next eCPM + 0.01) / (own estimated click rate * 1000)

oCPC is charged based on ad clicks and has nothing to do with how many times the ad is displayed.

Note: The estimated click-through rate is cyclical. It changes with the estimated conversion rate all the time, so it is recommended to use the click-through rate of a whole day or a long period of time to calculate.

A test: Have you learned the formulas I talked about today? Come and practice it~

Author: Pei Jia

Source: Houchang College