Many advertisers in the mobile advertising industry see CPC or CPM as models they’d rather avoid, and tend to focus on risk free CPA model.
I’d argue this view is a common mistake.
Our Dynamic CPC model is one of the hardest to sell for a 2 main reasons:
The majority of advertisers prefer running risk-free on a CPA model. The advantage of that model is that they don’t have to worry about the immediate results and they are less vulnerable to losing money. But we all know there’s no such thing as a free meal.
Most CPA traffic is being sold by Affiliate networks, while premium publishers sell on CPC or CPM. Running on Affiliate networks reduces the control advertisers have on the media they get and may cause illegal, incentivized, or fraudulent traffic. For that reason conversions can be invalid or have very low user value. On average, CPC traffic has 40% more ARPU than CPA traffic.
On the contrary, running on CPC gives the advertiser much more control on the media they get. Most advertisers will try to buy their inventory on the lowest CPC possible, and end up purchasing the cheapest traffic available. What many advertisers aren’t aware of is the majority of premium publishers actually sell their quality inventory on high CPCs and the low priced traffic is usually remnant.
Above we can see the correlation between CPC price and eCPA. In several case studies, we saw that the cheaper traffic produced lower conversion rates and higher eCPAs. When advertisers chose to run on a lower CPC, they prevented their campaigns from receiving high quality publishers, whose traffic could have potentially met their CPA goals and generate higher ARPU.
On dCPC we focus only on media that is around the CPA goal, from $0.01 CPC to $1 CPC, and thereby expose our advertisers to the entire inventory available to his targeting and goals. With our advanced optimization tools we are able to optimize the inventory we get towards the CPA goal and also get valid users that are highly engaged to the product.
Yuval Ron is a Mobile Team Leader at dmg