CPC and CPA Demand: A Subtractive Approach

“Tips On Tuesdays” is a blog series written by AppNexus’ clients and partners. The series features practical insights on how various companies have been successful in today’s digital advertising ecosystem and how you can be too. Today’s post is written by Phil Matarese, Senior Manager Programmatic Demand of Beanstock media.

Michelangelo famously said, “Every block of stone has a statue inside it, and it is the task of the sculptor to discover it.” Most read this and think of the flawless work of art. But we at Beanstock Media think it’s essential to first consider the raw block of stone that the statue emerged from.

In the world of online advertising, quantity is the key to quality—stone, in other words, before statue. We put additional bids into an effective CPM (eCPM) auction by allowing CPC bids to compete on an eCPM basis. Then, we test over several weeks and carve away the underperforming bids to determine where our focus should be.

We call this the “subtractive approach.” Here’s how it works.

  •  Test, Add, then Subtract. Identify your top publisher zones by volume and CTR. Then add CPC demand buyers that should match the supply. Remember, the early stats tend to misrepresent the long-term opportunity. As you increase your exposure, careful subtractive management becomes critical.
  • Document and Learn. Make note of when you add or remove a CPC demand partner from the mix. After each iteration of subtractive changes, give your optimization algorithm at least seven days to recalibrate. Once the demand-side is complete, you can take the same approach with the supply-side placement.
  •  Don’t Pull Both Levers at Once. If you’d rather start with the supply-side and then move on to optimizing the demand-side, that’s fine. But don’t pull both levers at the same time, or you won’t have a clear picture of cause and effect.

We learned from the original master: quantity breeds quality. Carve away, subtract, and stay focused on eCPM yield until you find the right CPC demand partners and inventory. Done correctly, CPC demand can drive a nice stream of incremental revenue.

Good luck!

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