Campaign optimization: The relationship between CTR, CPC and CPI

The concepts in this article

  1. CTR (Click-Through Rate): Click-through rate per thousand ad impressions. If the ads is displayed 1000 times and has 50 clicks, the CTR is 5%.
  2. CPC (Cost Per Click): The cost that Advertisers pay for each time users click their ads.
  3. CPI (Cost Per Install): The cost that Advertisers pay for each time users download/purchase their product/app.
  4. CVR (Conversion Rate): user conversion rate from interactions on the ad, the interactions here can be clicks, views, …
  5. Advertiser: The campaign owner, spending money to run ads for the product, in this article is an Android app.
  6. Publisher: ad placement provider, be it AdMob app publisher or YouTuber / Blogger, who make money from Adsense ads.

The truths need to be revealed

  1. Publisher: Is Asia’s eCPM low?
    No
  2. Advertiser: Low CPC won’t be able to target US, UK users?
    It depends on how handsome you are

A. CTR affects the priority of the ad and CPC

Because Google ads are mediated to maximize Publisher profits. Therefore, ads with higher CPMs will be given priority (Publishers will receive higher eCPM, more money).

B. Conversion rate (CVR) affects CPI

After you understand how the CTR affects CPC and ad visibility. We need to understand more about the relationship between Conversion Rate (CVR) and CPI.

C. Answers of 2 questions at header

For Publisher: Why is Asian eCPM low?
Because the campaigns in Asian is less, the number of ads is always insufficient. Therefore, ads with low CPMs are “dredged” and delivered all.

Notes

Hopefully the article will help you with the most specific and understandable perspective to be able to manually optimize your campaign.
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