How to control costs while improving conversion effects through advertising?

For those who are new to the industry, it may be easy to confuse the billing models in advertising. In order to better distinguish concepts such as CPC, CPM, CPA, CPL, CPS, CPR, etc., the editor will use an example to explain.

Scenario: You are on a business trip and staying in a hotel

➤ At night, when I first entered the hotel, I wanted to see what services the hotel could provide, so I collected some related brochures. This is called precision advertising (platform, time, and crowd);

➤ You simply saw the card, which is called CPM (impression);

➤ You are interested, walk over and pick up the card: this is called CPC (click);

☞☞☞ Here comes the point!

➤ You look at the card again and again, and finally you can’t resist the temptation and call the consultation number on the card: this is called CPA (behavior);

➤ You were still nervous before the call was connected, but with the greeting of "Hello sir/madam, how can I help you?", you decided to order a bowl of pasta, and then the waiter brought you the pasta. This is called CPS (Transaction Persistence).

➤ You find this noodle delicious, and suddenly remember your good friend Wang who lives next door. As the saying goes, don’t forget your friends when you become rich, so you must recommend this delicious noodle to him: this is called CPL (potential lead);

➤ In order to record this wonderful moment, you recorded the whole process with a camera, and the video is kept for future recollection. This is called CPD (download);

➤ After the service, you are in a good mood and fill out a questionnaire to rate the service, giving it a perfect score. This is called CPR (Careful Response).

However, in the specific advertising, how to reasonably choose these payment models? How do they help advertisers control costs and improve conversion results?

Before that, let’s first understand the three major pain points that advertisers generally face in order to achieve their target delivery results in the traditional bidding model:

➤ Difficulty in bidding

How to bid reasonably depends on the experience of the operators , the delivery efficiency is low, and the effect cannot be guaranteed.

➤ Activation and conversion costs are uncontrollable

A high click- through rate does not necessarily mean a high conversion rate , and the conversion cost is uncontrollable.

➤ Difficulty in impulse

Since conversion costs are uncontrollable, when advertisers need to increase sales, they worry about rising costs and wasted budgets and cannot increase sales with peace of mind.

What is oCPA?

In order to solve the above problems, a new bidding method, OCPA, was introduced based on big data intelligent algorithm.

It uses the conversion estimation model to estimate the conversion value of each click in real time based on the optimization goals and bids provided by advertisers. Automatic bidding will be performed based on the estimated results, and fees will be charged per click. At the same time, the conversion estimation model will be automatically optimized based on the accumulated advertising conversion data to continuously improve the effectiveness of advertising.

How to use oCPA correctly?

➤ Report conversion data and reach target data volume

The system needs to obtain enough conversion data to accurately estimate which audiences are most likely to convert after seeing the ad. The more comprehensive the conversion data is, the more helpful it is for optimizing the delivery effect. If the conversion data is insufficient, it will enter the machine learning stage, during which the conversion cost of oCPA advertising will fluctuate greatly.

➤ Use oCPA for delivery

When the target data volume is met, it is recommended to create a new ad using oCPA, or convert the original CPC ad to oCPA.

➤ oCPA vs. CPM

The traditional CPM conversion volume and conversion cost are uncontrollable. Publishers can only blindly increase exposure to ensure conversion volume, resulting in a sharp increase in conversion costs. In comparison, oCPA will optimize the next oCPA bid based on actual effect feedback, achieving a balance between conversion volume and conversion cost.

➤ oCPA vs CPC

Compared with CPC, oCPA estimates the activation rate and can better obtain more activations .

Judging from the simulation chart of oCPA and CPC delivery effects, under the condition of the same activation volume, the activation cost of ads under CPC delivery method is higher.

➤ Problems that oCPA solves

Simply put, oCPA can continuously and stably obtain more activations and improve the activation rate at a controllable activation cost.

What is oCPC?

In addition to oCPA, there is another smart bidding method, which is oCPC (Optimized Cost Per Click, a click bidding method with optimized target conversion).

It means that advertisers can choose and set advertising goals and give a target conversion price. The advertising system will estimate click-through rate and conversion rate, show ads to users who are most likely to convert, and ensure that the conversion cost is as close as possible to or lower than the advertiser's target bid.

➤ Conversion Goals

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 according to 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.

➤ Conversion Bids

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.

Intelligent delivery is based on the continuous improvement of the platform's ability to estimate conversion rates. For advertisers with mature advertising experience, if some information flow platforms can already estimate the conversion rate of corresponding advertising plans well, they can choose smart delivery to avoid the high exploration costs in the first stage.

Basic principles of OCPC

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.

➤ Click-through rate & conversion rate estimation

Click-through rate = click/show, conversion rate = convert/click.

oCPC delivery recommendations

➤ Choose high-exposure, high- CTR materials

Choose advertising materials that have had high exposure and high CTR in the past, and it is recommended that the click bid is relatively high to avoid problems such as insufficient sales and too long a first-phase delivery cycle.

➤ Set click bids and activation bids appropriately, and avoid setting them too low

The level of price will affect the number of conversions obtained. It is recommended to set a real and reasonable conversion cost for delivery. If the target price is set too low, some conversions will be missed, high-quality traffic will be lost in the bidding, and even the volume will not be achieved.

➤ In the first stage, patiently wait for data accumulation to reach the threshold

The first stage is to place ads according to CPC bidding in order to obtain sufficient conversion volume and ensure that the system accurately predicts the conversion rate. Therefore, the conversion cost may not be stable yet, so you need to wait patiently for the data to accumulate. When the conversion volume accumulates to a certain amount, the system will enter the second stage and perform intelligent delivery based on your target conversion cost. The more conversion data accumulated in the first stage, the more accurate the prediction results will be.

➤ In the second stage, be cautious when changing ad settings and continue to optimize creatives

The system has limitations. After entering the second stage, it is recommended not to modify the advertising settings, because the system automatically optimizes the delivery based on the conversion data of the first stage. Modifying the advertising settings will affect the accuracy of the estimation model.

For information flow advertising , please contact Qinggua Media official

The author of this article @Information Flow Advertising Marketing Strategy is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, advertising platform, Longyou Games