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What would be a reasonable price for a CPM ad?

Mobile Advertising: Should my minimum CPM match my eCPM?

  • This question is not about understanding the calculation of eCPM. I simply want to know if my minimum CPM(floor price) should be close to my eCPM. In other words as my eCPM goes up should I be commanding more $$ per mille? Here's an image of my dashboard to give an idea of what I'm talking about. Each blotted line is an app. Below each app are the ad units inside the app. "Listview banner ad" is the same as 320x50, not that that's relevant. Under the minimum CPM column is where I set my price floor for each ad unit. To the left of that column you see the column "ECPM". The ECPM figures fluctuates day to day but keeps the same general range. Question is: Should I be raising each ad unit's minimum cpm to match closer to it's ecpm to increase my revenue? and if so whats a good ratio or percentage?

  • Answer:

    The eCPM is an average so if you set the floor to match it you'll cut out a lot of cleared impressions below that. Your eCPM will subsequently go up but the number of impressions sold and raw revenue may go down, possibly too much. However, the raw number of impressions in the example above is small and the demand available on MoPub is substantial so you may be able to raise the floor quite a bit without negatively impacting the number of impressions cleared and thus simply increase your total revenue. In your case I would inch the floor up in nickel increments until the number of cleared impressions starts to drop off too much.

Ben Perry at Quora Visit the source

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Very nice question. Here's my perspective. The Floor Price is an indicator to all participating advertisers of what price does your inventory command. Your eCPM is not only a measure of potential revenue, it is also an indicator of how much advertisers think your inventory is worth across all bid methods - CPM, CPC, CPA, or RTB. Now, what is missing here is our knowledge of the traffic allocation algorithm of the network / SSP you are using. Despite that, matching Floor Price to eCPM will have the following impact - 1] For CPM advertisers who are bidding around your expected price, you might appear expensive and your access to booking campaigns may reduce. 2] For CPC and CPA advertisers, your inventory might get discovered later as they exhaust cheaper sources and start bidding higher for either better quality or fresher audiences. 3] For RTB bidders who are almost always working to a CPC / CPA goal, your inventory will only be bid on if it is within the range that the bidder thinks it can score a win for the set goal. My advise is to see if the eCPM to Floor Price ratio is consistent over at least a month (lesser if your revenues are over 100 USD a day). If it is, then you can test a different floor price every week and observe its impact on eCPMs. Bottom line, raising your floor price should not reduce your bookings. Hope this helps.

Alap Ghosh

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