In today's wide world of retargeting, most vendors buy media the same way. Once the inventory has been purchased, many retargeting vendors will resell that inventory on a CPC (cost per click) basis.
At MNTN, we sell this inventory on a CPM (cost per thousand impressions) basis for good reason. Using a CPM pricing model, it doesn't matter how that inventory is purchased, whether it be through exchanges or from publishers.
Before we dive deeper, you should first understand the difference between the two pricing models:
CPM vs. CPC
CPM (cost per thousand impressions)
The advertiser pays the vendor a transparent rate based on the actual CPM cost of the inventory. The vendor makes their margin by applying a fixed percentage to the inventory purchased.
CPC (cost per click)
The advertiser pays the vendor every time a user clicks on an ad. The vendor makes their margin by maximizing the difference between the actual cost of acquiring the inventory and the CPC the advertiser pays.
The reason we use a CPM model is that it best serves the retargeting goals of our advertisers (i.e. you). The idea that we spend on a CPM basis, combined with a low budget spend, ensures that the retargeting platform optimizes for the specific goals you are striving for; in our case ROAS (return on ad spend) or eCPA (effective cost per acquisition). This approach ensures that you are receiving total transparency and maximizing your reach. You can read more about choosing the right goal here.
Ensuring transparency
CPM pricing promotes transparency and allows us to optimize your specific goals, whether that be ROAS or eCPA.
Retargeting vendors that price on a cost-per-click (CPC) or cost-per-acquisition (CPA) model have a good incentive to hide the actual cost of the media, and also where those ads are placed.
By doing this, they are also incentivized to increase margins without alerting you. Also, should a retargeting vendor purchase on a CPM basis and then translate it back to a CPA pricing model, they are also less inclined to share their margins or reveal which inventory sources are providing better performance.
With a CPM pricing model, we focus on your goals and adjust campaigns based on your specific requirements, and at the same time show all the publisher sources that have provided the best performance.
Hitting your goals
It's imperative to remember that CPM represents a much lower risk to you, the advertiser because instead of paying for clicks, we take a goal and won't spend your budget unless it's in the range of (or better) than the goal for which you are aiming.
The way media is purchased shouldn't interfere with your achieving and measuring actual campaign goals. Let's say your goal is to maximize ROAS; how you measure this may differ depending on your campaign type and goal.
By pricing around CPM – the same model we use to buy inventory – we can focus on meeting campaign goals without having to worry about arbitraging our media spend.