For an in-depth analysis of oCPC, just read this article!

I have wanted to talk to you about conversion bidding for a long time. The most mainstream bidding method on many information flow platforms is oCPC (Optimized Cost Per Click, a click-through bidding method with conversion as the optimization target). What exactly is "conversion bidding", what are the characteristics of "conversion bidding" under information flow delivery , what problems may be encountered during the delivery process, and what basic delivery rules should be followed? Let's take a look together.

Official definition: Advertisers can choose and set advertising goals and give a target conversion price. The advertising system estimates click-through rate and conversion rate , displays ads to users who are most likely to convert, and ensures that the conversion cost is as low as possible or lower than the advertiser's target bid. This concept involves three concepts: conversion goal, conversion price, and click-through rate & conversion rate estimate, which constitute the four core elements of conversion bidding.

First, conversion goals.

Since it is called conversion bidding, what are you bidding for and how are you bidding? First of all, we need to clarify what conversion is and how advertisers should mark conversions. This process is called conversion tracking. Based on the advertiser's goals, conversions are generally divided into two categories: app downloads and lead advertising plans.

The app download category is divided into 6 conversion goals based on the conversion funnel: download completion, installation completion, activation, in-app event, registration, and payment.

The conversion goals of lead-based advertising plans are relatively rich and diverse, mainly including: form submission, phone calls (click to call, confirm to call, effective connection), online consultation (click to consult, effective consultation), WeChat copying, product purchase, etc.

Second, conversion bidding

After the advertiser has marked the corresponding conversion goal, he can bid for it. Currently, there are two ways to bid on the Toutiao platform: smart delivery and two-stage delivery. The difference between the two delivery methods lies in whether a cold start phase of CPC delivery is required. Smart delivery only needs to bid for your current conversion goal. Two-stage delivery will have two bids, one click bid and one conversion bid. Click bid is used in the CPC cold start delivery phase.

Smart delivery is based on the continuous improvement of the platform's ability to estimate conversion rates . For mature advertisers, some information flow platforms can already estimate the conversion rates of corresponding advertising plans very well. In this case, smart delivery can be chosen to avoid the high exploration costs in the first phase.

Conversion bidding is based on two basic principles: value bidding and robust bidding. Value bidding means evaluating the ROI target range of advertising and converting it into your bidding range; stable bidding means making small adjustments within the bidding range that you can accept and avoiding major changes. However, there is a problem on the platform: new advertisers do not know what ROI they can expect to achieve on this platform, and they do not know how much money they need to spend to put up their ads. So, can they play well on this platform? Leave a question and continue reading.

Finally, click-through rate & conversion rate estimates

For this part, you only need to know: click-through rate = click/show, conversion rate = convert/click. Taking Toutiao as an example, the current method used is a two-stage estimate. Users most likely to convert: Users with the highest convert/show probability.

Taking Toutiao as an example, there are currently three types of conversion bids for Toutiao: o cpm , o cpc , and cpa . These three conversion bids are exactly the same in terms of estimation and ranking; the only difference is the billing. Among them, ocpm is charged according to display, ocpc is charged according to click, and cpa is charged according to conversion, that is, no charge is made if there is no conversion.

Who benefits from conversion bidding, and why should advertisers choose conversion bidding? For a more understandable understanding, let’s take an example of buying fruit. The buyer represents the advertiser. It is assumed that every buyer only likes to eat a certain kind of fruit. The fruit represents traffic ( advertising location ). The seller represents the Toutiao platform. The seller is responsible for the way the fruit is sold. The seller provides three selling methods: selling by pile, selling by category, and selling by brand of a specific category. The corresponding ones are display bid, click bid, and conversion bid.

Traditional display bidding: The seller (platform) is unable or unwilling to classify the fruits (traffic) and decides to sell them in piles. The buyer (advertiser) cannot make a selection and all fruits are priced at 5 yuan per kilogram.

Traditional click-to-bid: The seller arranges the fruits in categories and decides to sell them by type, with apples costing 6 yuan per catty, oranges costing 7 yuan per catty, and pears costing 8 yuan per catty.

Conversion bidding: The seller has made more detailed classifications of fruits, such as big apples and small apples, so that the price of each fruit has increased to varying degrees.

This is a non-zero-sum game. The more the seller invests, the greater the profits for both parties. The overall profit is greater than the investment of the matching platform, and the total profit is optimal. Whether from the perspective of the profits of both buyers and sellers or the effective use of resources, the more refined and accurate the sales, the higher the efficiency. The most suitable traffic is given to the most suitable advertisement, with more accurate recommendations to achieve the best results for advertisers, users and platforms.

These problems can be summarized into two aspects: one is the cost issue, and the other is the volume issue. Before we talk about solving a problem, we must first determine what the problem is. First of all, what is over-cost, what is explosive volume, and what is instability? There is a basic principle for these three questions, which is data confidence. It is irresponsible to discuss the issues without considering the confidence.

For conversion costs, first of all, we must ensure the initial accumulation amount. It is more meaningful to observe the conversion cost after 10 expected conversions. It is not recommended to frequently adjust the plan in the early stage of the advertising plan; secondly, we must ensure the conversion rate. If an advertising plan has less than 10 conversions per day, the conversion rate is very low, and the conversion return is slow. One conversion return will bring about an exponential change in cost. It is meaningless to observe the cost in a short period of time.

There are several main factors that affect the delivery of the plan: the plan itself (creative & landing page ), conversion goals, bidding, targeting, delivery method and the situation in the same account.

1. Set conversion goals reasonably

Reasonable means that you can make reasonable choices based on your own situation. For conversion bidding advertising, the deeper the conversion target in the funnel, the better the final ROI will be. However, if this industry is relatively sparse and there is less in-depth conversion data among users, then increasing volume may be your main problem at this time. You can choose a relatively shallow conversion goal to launch.

2. Effectively select targeting and interest classification, etc.

For advertisers whose audience is narrow and whose sales volume is not very good, precise targeting can be carried out during the cold start period, and then the targeting can be steadily released later. This will help the positive learning of the new advertising plan model and avoid running out of control as soon as it goes online. Of course, it is also a method for selecting high-quality delivery locations.

3. Optimize budget settings and bidding

During the cold start period (directly entering the second stage), you can set a relatively low budget to explore new plans. Of course, this budget should preferably be able to meet the needs of confident conversion tests, such as more than 10 conversion cost consumption. During the cold start period, you can set conversion bids that exceed expectations to a certain extent to assist in exploration. As the platform exploration mechanism continues to improve, this situation will gradually decrease.

4. Choose the right delivery method

Standard delivery or accelerated delivery? This first depends on your budget. For advertisers with limited daily budgets, it is best to choose standard delivery, which averages out the delivery throughout the day to optimize the delivery cost. Of course, for advertisers with unlimited budgets, if you want to ensure a positive ROI, it is recommended to choose accelerated delivery. Secondly, it depends on the planned delivery situation and stage. If the advertiser has just started to deliver and is in the exploration stage of cost and bidding methods, and has not yet started to play around, it is recommended to use standard delivery and the platform will help you achieve the best result.

One thing that needs to be emphasized is to avoid repeated and frequent adjustments in price, targeting, etc. These adjustments will bring about changes in the audience. The modified model will be inaccurate to a certain extent, leading to fluctuations in delivery volume and cost. In short, by combining the characteristics of the advertisement and following the basic principles, I hope you will no longer have a headache with subsequent placements.

The author of this article @艾奇sem compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, information flow advertising, advertising platform