Since programmatic advertising is conducted in an auction environment, the CPMs set by you during the ad group creation are your base and maximum bids in the ad auction. CPM, or cost per mille, is the price you pay for every 1,000 impressions.
The higher your base CPM, the greater the chance that your ad will appear, as you will win more ad auctions. When deciding on your bids, please note that the base is more impactful than the max. For example, if your base bid is $3, and your max is $50, you will still only enter into auctions with a $3 floor price. When looking to increase your win rate, you will want to raise the base bid first, but we would recommend that you raise your max in accordance with a 1:2 ratio.
As always, the ad exchange will charge you only what is needed to place your ad above the next-highest ad. If your base is $3 and your max is $6, your media placement cost will be somewhere in between depending on how competitive you needed to be in order to beat the next-highest advertiser.
Your CPM is comprised of two core costs:
- Data CPM: The cost to utilize the audience third-party data to find targeted prospecting or look-alike audiences
- Media Placement CPM: The cost per mille to serve the ad to an open ad slot in the inventory matching your campaign/ad group parameters
In general, more narrowly targeted ad groups will need a more aggressive bid in order to win factors such as type of data, size of the user pool, site categories, geolocation and premium content of site lists, all impact the price. For North American markets, good rules of thumb include:
- Broad contextual category, keyword or site targeting: $1-$4
- Bids with data-driven audiences: $3.00 –$ 15.00
- Bids for retargeting campaigns: Can vary widely depending on the size of your cookie pool. If you have a very small cookie pool, you will need to bid more aggressively to win those users.
- Large cookie pools: $3.50 – 6.00
- Small cookie pools: $6.00 - 8.00
- Max bid should be at least 2x base bid
Exclusive Bidding Adjustments
The Exclusive Bidding Adjustment is a tool reserved specifically for site/application lists, categories, and keyword lists. When you alter the Exclusive Bidding Adjustment, you are giving the system updated bidding instructions.
If you would like to bid on inventory outside of your site lists, categories, or keywords that are outlined, leave the Exclusive Bidding Adjustment off.
If you would like to ONLY bid on inventory that is in your site lists, categories, or keywords, toggle the Exclusive Bidding Adjustment on.