How to solve the problem of high conversion cost of advertising?

High conversion costs may be a stumbling block in every optimizer's career. Whenever the client asks, "Why is the cost so high today?" ], [What is your adjustment strategy? 】

When I heard this, my inner thoughts were: How would I know why the cost is so high? Nothing moved! ! !

If you look closely, there are huge differences between different industries and different campaigns, so today I will explain in general what we should do when the conversion cost is high?

01 What does conversion mean?

A conversion is a behavior that you want users to take after seeing your ad.

The conversion bidding method is generally ocpm or ocpc, which means charging according to exposure or charging according to clicks. Using this smart bidding model, the system will push ads to users who are more likely to perform specific conversion behaviors to ensure the effectiveness of the promotion.

Taking Bytedance as an example, let’s take a look at the common conversion goals.

02 Why is the conversion cost so high?

High conversion costs may be caused by the following:

• Your backend costs are high
• Costs fluctuate normally during the learning period
• Model learning fails, and costs rise
• Frequent bid adjustments

Only by finding out why costs are rising can we find the right remedy.

03 What to do if conversion cost is high?

First of all, you need to distinguish what kind of advertising it is. Generally speaking, it is divided into brand advertising and performance advertising.

If it is a brand advertisement, it actually measures the cost per thousand impressions (CPM) and the cost per click (CPC).

The high costs of these two are usually caused by your CPM bid or CPC bid being too high. Generally, if you lower the bid while ensuring that it can run out, you will basically achieve the purpose of reducing costs.

If you are doing performance advertising, generally it involves goals such as activation, download, payment, registration, and retention. The cost of performance advertising needs to be viewed according to different periods of the account or plan.

It is generally divided into three stages: testing period, expansion period and recession period.

1. Testing period

High costs during the testing period are usually caused by the model not learning enough. It is equivalent to that the account or plan has not found the corresponding group of people that can be converted.

Image source: Sanlitun Information Flow

In the early stage of advertising , the system will assign a certain number of people to the advertisement, let them receive your advertisement, and then observe whether they have conversion or click behavior.

If there is conversion behavior, then it is defined as a valid user, and users with the same labels or characteristics as these users are also more likely to convert.

The system will then look for more people of this type, or people with similar labels.

At this point, the system has completed the process of first finding people, then analyzing features, and finally classifying them. This process is model learning or model building.

The plan to increase volume and keep costs low was the result of many model studies, and finally we found those people who have certain characteristics, so the consumption level is relatively stable and the cost is low.

2. Volume expansion period

The cost during the period of volume expansion will generally remain in a relatively stable range, otherwise customers will not allow you to increase volume. (He didn’t lose a lot of money) There won’t be big fluctuations on a daily basis.

If there is a large fluctuation:

• Tell the customer to check if there is any problem with the data transmission (delayed transmission or no transmission)
• The overall traffic of the market fluctuates. You need to contact the media to help check the traffic situation of the market on that day.
• Some industries rush to buy during special holidays
• …

3. Decline

If impressions and clicks are declining for more than 3 consecutive days and costs are increasing every day, the plan is basically in decline.

In Ocean Engine, you can find [Plan Diagnosis] in the custom column as a reference for the plan status. Other media also have similar custom columns.

For projects in a recession, we can first try to raise prices to see if we can restore consumption, but we must limit the project budget. High bid + low budget.

At the same time, copy a few more plans, slightly increase the bid, and change the copy and put it online again to see if you can increase the volume again.

04 Some guidelines for advertising

Generally speaking, when placing performance-based ads, there is a default rule that is to do less negative actions and more or no positive actions.

Here are the basic rules to follow for reference situations:

• Don’t change your bid too often (more than 2 times is considered frequent)
• Accept that costs fluctuate during your program
• Shut down high-cost programs promptly
• To reduce the duplication of account materials, you can replace the copywriting and update it.
• Plan the budget in small steps and try not to reduce it
• Remember to set the account daily budget and modify the account budget for the next day

Author: Erbai

Source: Schrödinger's Information Flow (W77PPT)