Minimums Matter for Maximum Results
By Mike Krass on September 21, 2011
- Cost per click - no minimum, but results achieved through constant manual optimization
- Cost per acquisition - no minimum, but results achieved over longer spans of time
- Cost per thousand impressions - $25k minimum with maximum results achieved with minimal manual optimizations
Cost-per-click is the most cost effective. Google Display Network is the most popular for this purchase model. You create a list of keywords then Google scans for content that contains the most keywords within the articles then delivers your ad. You only pay per click.
Little spend is needed to get this up and running, but in order to achieve results that were worth the spend, hourly optimizations need to be spent, constantly looking at which keywords are driving the most clicks and end actions. It’s time consuming and results aren’t guaranteed. The more you spend the more data that is delivered and a quicker rate so smarter optimizations can be made less frequently and you’ll achieve better results.
Cost per acquisition is less common and is only successful when there is an action or acquisition that is free and easy for users to access. Minimums are also not required, but if little money is invested then you’ll be bidding on terms and placements that have very little visibility. It could take a very long time for you to meet your goals.
A CPM-priced DSP (or learning platform) delivers best results, providing the most premium content, guaranteeing better control over placement and alignment with the right target audience. However, minimum spend and timing for a national campaign are required, for two reasons:
- Demand Side Platforms (DSPs) need enough data to be considered statistically significant.
- DSPs need time to learn. It takes about two weeks for Demand-Side-Platforms to get enough data needed for them to start making optimizations.
CPM is the strongest platform in terms of delivering results. It’s also less manual as it uses technology that identifies users based on behavioral browsing from users who have already converted. $25,000 is usually a required minimum. While this feels like a lot of money for smaller brands, this kind of spend is usually spent on a CPC or CPA campaign, but over a longer period of time and the results are not as strong.