Selling On A CPM Model? Read This

Diversifying your pricing model can lead to surprising benefits.

We’re going out on a limb with a guess: You’re relying on CPM as your primary pricing model. Are we right?

Either way, we’re betting CPM is a core component of your sales strategy. Let’s talk about why relying on CPM can lead to money left on the table.

Missed Opportunities When Solely Selling on a CPM Model

On its face, CPM is great. When pricing is based on basic impression delivery, publishers (seemingly) make more money. The value exchange resides squarely in your favor: Advertisers pay you for ad impressions served on your site, regardless if the ad is viewable or not.

Here’s where the “but” comes in.

Advertisers today are savvier than ever before. They want solutions that meet their goals, and aren’t afraid to avoid inventory they don’t like or force publishers into site redesigns for better performance - at the expense of under-utilizing site real estate.

What this all means for you: While CPM will always have its place, it can’t be the sole star of your pricing strategy. Not if you want to have a competitive edge in market, develop deeper advertiser relationships and make the most of your inventory.

Luckily, there are a host of delivery and performance-based pricing models better aligned with advertiser goals to choose from.

Delivery Based Pricing Models

Delivery-based pricing models are designed for campaigns committed to providing advertisers with a specific, predictable number of impressions. CPM is a classic example, as is it’s slightly more advertiser-attractive cousin, viewability-based pricing.

Viewability-based pricing is, you guessed it, based on how many impressions are actually viewable, or in other words, how many people actually see the ad. Advertisers love pricing models based on viewability because it helps provide transparency to the impressions game. There’s no more guessing involved: They know exactly how many people actually saw their ad on your site. Common delivery-based pricing models include 100% viewable, 70% viewable and video viewable guarantees.

Performance Based Pricing Models

Here’s where things get fun. Performance based pricing models align your pricing with actual advertiser performance goals. Using performance based pricing gives advertisers clearer insight into campaign success, which in turn can help open up access to net-new client budgets. There are a lot of performance based pricing models out there, but the most common is based on cost per click (CPC). CPC campaigns have a primary goal of driving a specific user behavior: ad clicks. Other common performance-based pricing models include cost per conversion, cost per view and cost per completed view.

An up-and-coming pricing model to keep an eye on is cost per engagement (CPE). CPE pricing models empower you to charge advertisers based on sponsored content performance. Sometimes referred to as cost per read, CPE pricing models count user actions on a piece of sponsored content as the billable metric. Pricing models like CPE are incredibly attractive to advertisers, as they deliver exactly what they want from content distribution: user engagement.

One last thing

Diversifying your pricing model doesn’t just provide advertisers with attractive buying options that set you apart from the competition. It’s also an often-overlooked way to make better use of your inventory. By leveraging different delivery and performance based rate types across your properties, you’re better able to play to the strengths of your available placements. Have ad spots with low viewability? CPC campaigns can help turn the $0.00 you’re making on them right now into revenue.