This article explains the relationship between CPM, ECPM, and OCPM.

Why is CPM so high? Why is ecpm so high but not measured yet? What exactly is ocpm? Is there any connection between these three? Is there any impact on the account? How should I adjust?

Let’s talk about the relationship between the three today.

01 | Basic Concepts

Cpm: stands for cost per thousand impressions, which is a data indicator and also a bidding method. Represents the cost of showing it 1,000 times, that is, how much money you have to pay to the media for showing it 1,000 times

Calculation formula: cpm=cost/impression*1000.

Ecpm: ① For media , it measures the estimated revenue of the media (including advertising space revenue and user experience) and is an effectiveness measurement indicator. The simple understanding is that the media sells these 1,000 advertising spaces to you and asks you how much it can charge.

②For advertisers, it means high ranking and high exposure, which is a bidding value.

This value changes in real time; each ad will be displayed many times every second, and each display will affect your ecpm score. There are tens of millions of ads in the traffic pool, and a difference of 0.00001 will result in a difference of many rankings; and there will be a Matthew effect, the better the better, and the worse the worse; everyone knows the ecpm formula, but as for the estimated click-through rate and estimated conversion rate, there is an additional estimate, and there is no way to determine this value manually, because the system changes according to the situation of each display (whether it is clicked, whether it is converted, browsing depth, target behavior desire), so we can only make a rough prediction over a long period of time (one or two days).

Calculation formula: ecpm = estimated click-through rate * estimated conversion rate * bid * 1000 (under ocpm mode)

Ocpm, which can be understood as the "automatic bidding" version of cpm , is a bidding method targeting conversion goals . It is real-time and dynamic.

This is the bid calculated by the advertiser based on his or her actual cost situation.

The principle is that the system determines the possibility that the user is the target user of the advertisement through the behavior of the crowd. Then, a premium is set for users with high likelihood. The higher the likelihood, the higher the premium, and the price is lowered for users with low likelihood.

For example: Now there are four types of people, A, B, C, and D. Suppose A clicked but did not convert, B clicked and converted, and C and D did not click at all.

Under the traditional bidding method (cpm), when the bid is 6 yuan, when the advertisement is displayed to four groups of people, A, B, C, and D, 6 yuan will be deducted. It is always 6 yuan, without any deduction.

Let’s take a look at ocpm again. The bid is still 6 yuan, but the system will give a premium of x% to people with a label similar to b, so the actual bid is 6+6*x%. The system will reduce the bid by x% for people with label a, so the actual bid is 6-6*X%. There will be no bid for people with label cd, or a very low bid.

This also explains why costs fluctuate and why data analysis needs to be viewed over a longer period of time.

02 | What is the impact of these three?

Under the Ocpm bidding method: cpm only indicates the value of traffic, has nothing to do with the quality of traffic, and has nothing to do with the starting volume.

Let's take a look at the system's traffic distribution mechanism:

In the early stage of advertising, you will be placed in a very small traffic pool. In this pool, if you perform well, you will be placed in a larger traffic pool. If you perform well, the traffic will continue to be amplified. If you are eliminated by other advertisements in the same pool, there will generally be no volume. ECPM is the value that measures whether you can enter the next level of traffic pool.

ECPM is an indicator of advertising quality for many platforms. The higher the ECPM value, the more revenue the ad can bring to the platform (money from selling ad space and user experience), so the platform is willing to give the ad more exposure opportunities.

Dimensions for measuring effects: likes, reposts, browsing time, replay rate, clicks, conversions, browsing depth, behavioral desire (Facebook), etc.

The system should also have other dimensions to judge the quality of the plan. This is not important. For optimizers, we only need to know that ecpm is only used to measure the effect . If your Ecpm is high, your plan will be ranked high, but a high ranking does not mean that you have quantity . It is possible that the players ranked lower than you are all poor students.

Now let’s talk about this Ecpm value. Is the bigger the better? Not necessarily, because since ecpm represents revenue for the system, the higher the ecpm, the higher the system revenue, which may not necessarily meet the advertisers' demand for low costs.

03 | What is the connection between these three?

There is no direct connection, they are concepts of different dimensions.

Q: If cpm is high, does that mean ecpm is also high?

Answer: No, cpm and ecpm are concepts of two dimensions and have no connection.

Does the higher the CPM, the more accurate the traffic?

Answer: No, the level of CPM can only indicate the value of traffic, and has nothing to do with the quality of traffic. The high CPM may be due to the fierce competition in the market environment, or because the cost-effectiveness of the population explored by the system is low, and the population is relatively expensive. For the same 1,000 impressions, you have to spend 50, while others only spend 40.

Q: What should I do if the CPM is high? Need adjustment?

Answer: Generally, the CPM will be very high if a new account is not running well. Or the user changed the product, resulting in the new population being different from the historical population, and the system could not react quickly, so the display cost was high. Whether to adjust it depends on the effect. If the conversion effect is ok, continue running . The premise of all optimization is to put results first , not to look at cpm, ecpm, cpc, etc. If you think the value is abnormal, you should adjust it.

If the effect is good, keep running. If not, analyze it in combination with other dimensions, such as whether it is an old or new account, whether the data of the newly created plan is abnormal or the entire account, whether your data is high or everyone else's is high, whether it is high today or has been abnormal for several consecutive days. In case of short-term fluctuations or individual cases, you may consider continuing to observe.

Question: If the ecpm is high, does it mean that the probability of passing the learning period is high? Can the plan for passing the learning period also achieve explosive growth?

Answer: There is no absolute relationship between ecpm and the learning period and whether the volume can be increased.

Whether you can pass the learning period has nothing to do with the amount you start with. It’s just like when you were in school, the end of the study period only means that you graduated, it doesn’t mean that you were a good student. Students who do not get a diploma or graduate are not necessarily bad students.

Question: Does a high CPM affect the final conversion cost?

Answer: Domestic information flow is not affected, the CPM is high but the conversion rate is high, and the cost is generally acceptable. The only things that affect the cost are the product, conversion goal, and bid.

Question: The planned ecpm is particularly high, and it is shown above as being higher than the industry average, but why is it not displayed in the plan?

Answer: ①.ecpm has little to do with consumption and magnitude, and is a sufficient but not necessary condition. For example, the system says your ecpm value is higher than 73% of the plans, but your display is only 100. Maybe the planned display of that 73% is only 30? The system is not wrong.

②. What determines your exposure level is your bid and creativity, as well as the market capacity of your product (whether the market is broad). Your product has only 100 users, but you want to expose it to 100,000 people. Sorry, the system does not allow you to waste money like this (under smart bidding).

③. In addition, it is possible that other accounts are running the same material and the same product, and others have occupied the traffic position, and you cannot grab their traffic inertia. (Pure speculation)

④. The market's ecpm is higher, and your plan is not competitive

⑤. The data is abnormal and is controlled by the system frequency.

⑥. Go to the wrong group of people and create a new plan.

The above are some of my thoughts on epm, ecpm, and ocpm, which only represent the author’s personal opinions.

Author:Bodyfo

Source: The nonsense of the square-faced fat boy