CPC and CPA payment types
Networks are often paid on a CPC and CPA basis by their advertisers and would like to buy from publishers in the same manner. The Cross-Network CPC and CPA Payment Types allow networks to buy and sell from each other on a CPC or CPA basis, instead of conducting all business on a CPM basis. CPC and CPA Payment Types allow buyers to pay sellers only when the user clicks or converts. Because sellers are taking on more risk by accepting these payment types, we have built in a risk premium feature to allow publishers to demand more revenue for taking on this risk.
Buying inventory on a CPC/CPA basis
Note
The ability to combine CPM booked revenue with either the Pay on a Per-click (CPC) Basis or the Pay on a Per-conversion (CPA) Basis buying strategy is being deprecated soon. Although this combination will remain functional for existing campaigns, you will no longer be able to use this combination on new campaigns or duplicate existing campaigns that use it. For best results, use the Performance Goals section on your line item and use Optimize to a % Margin of Booked Revenue as your campaign buying strategy. For more information, please see Add a Performance Goal to a Line Item and Using Performance Goals with CPM Booked Revenue.
In the Buying Strategies section of a campaign, you can choose to bid on inventory outside of your network on a CPC or CPA basis. You can continue to bid on a CPM basis as well.
You can choose multiple payment types in one campaign. The campaign will submit a bid for each buying strategy you use. We do this for two reasons:
- Sellers choose which type of deals they accept on their inventory, and some sellers do not accept CPC or CPA deals. For this reason, you may want to submit a flat CPM bid along side a CPC or CPA payment type to ensure that you have the option to win the impression. Currently all non-network supply partners only accept CPM deals.
- Even if sellers accept CPC and CPA deals, they have the ability to set a "risk premium" which allows them to insist that the expected payout for a CPC or CPA bid to be a certain percent higher than a flat CPM bid. Read more at Selling Inventory on a CPC and CPA Basis.
Example with multiple bids:
The Cheese of the Month Club pays Network A $10 per conversion. Network A decides to pay for media on a per-impression basis (CPM), per-click basis (CPC), and a per-conversion basis (CPA).
CPM: Network A chooses to optimize to a CPA goal of $6.50. This would give Network A a 35% margin, with some risk.
CPC: Network A decides they are willing to pay $0.50 per-click based on Network A's historical data. I.e. they believe that a $0.50 CPC will result in a profitable CPA.
CPA: Network A decides they will pay $8 per conversion. This would give Network A a 20% margin with no risk.
Note
When entering CPC and CPA Payment Types, enter a value that ensures that you are making a margin. This is the amount you will pay for media.
Based on these buying strategies, Network A would fill out the third-party bidding strategies section like this:
CPA and CPC payment bid calculations
In order to submit a bid for CPC and CPA payment types, your CPC/A bid must be converted by Microsoft Monetize into eCPMs to compete with all CPM bids. Microsoft Advertising uses historical click-through-rate (CTR) and conversion-rate data to calculate an eCPM.
Example:
| Payment Type | Historical CTR/Conversion Rate * 1000 | eCPM |
|---|---|---|
| $6.50 CPA Goal | 0.0001 | $0.65 |
| $0.50 CPC | 0.001 | $0.5 |
| $ 8.50 CPA | 0.0001 | $0.85 |
The bids above would be sent to the Impression Bus for decisioning. For CPC/A Payment types, Microsoft Advertising is taking the risk of calculating correctly. The bidder pays only on a click or conversion. This is different from using our optimization system which uses a networks goal to create a CPM bid; the network is paying for each impression.
Targeting inventory when using CPA/C payment
Currently, only Network inventory is available on a CPA/C basis, so if you choose to buy inventory in this manner, please ensure that you are targeting Network inventory, not just exchange inventory. Please reach out to your Microsoft Advertising Implementation Consultant for insight into what inventory is available on a CPC/A basis.
Reporting on payment types
We are very excited about the ability to report on payment types for Buyers and Sellers. In order to do this, select "Payment types" as a dimension in Network, Advertiser, and Publisher Analytics.
Buyers: Payment types can be CPM, CPC, or CPA.
Sellers:
Owner CPM: Publisher is paid on a CPM basis
Owner Revshare: Publisher is paid on a Revshare basis (CPC or CPA)
No Payment: Unfilled impressions (Defaults and PSAs)
Important
Please note that if you have reserve prices set at the placement level, and you enable CPA / CPC payment types at the publisher level, your net CPM for the publisher may fall below your reserve price (depending on the number of clicks /conversions your placement is generating).