Why dCPM is Best for ROI

The Fourth Digital Advertising Campaign Type - PART 2

A dynamic CPM or dCPM campaign works the same as a CPM campaign in that you set a bid that is a flat price for one thousand impressions and add a CPC or CPA goal to optimize toward. The important difference is that with CPM, the ad server can only pay the exact bid amount for each impression, regardless of the goal. With dCPM and with the advent of RTB exchanges, each ad call can be evaluated in real time to determine what the impression is worth and the DSP can bid that price. In the end, it will average out to the set bid price or just under.

For example, if you have a dCPM bid of $2.00, your DSP might bid 50 cents for one impression and $3.50 for another, depending on its value. The dCPM model is ideal for RTB exchanges because, depending on the DSP's technology infrastructure, it can potentially maximize performance by having the flexibility to "hand pick" each impression and pay exactly what it's worth. With a flat CPM model, you would never have access to those more valuable impressions, which are the more likely to convert. Likewise, you may overpay for many impressions that are worth far less than the CPM bid amount.

Every advertiser is after the same goal: To maximize their ROI. The power of dCPM combined with RTB exchanges creates a whole new level of competition and performance potential that has been and will continue to generate significantly higher ROIs for advertiser's who have access to the technology and infrastructure.

 

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