All retargeting vendors buy media the same way. The pricing model is known as CPM (Cost Per Thousand Impressions), and it’s always the same, whether the inventory is purchased through exchanges or directly from publishers. Once a retargeting vendor has purchased inventory, they can then resell it to advertisers in a variety of ways.
Common pricing models
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 they purchased.
CPC (Cost Per Click):
The advertiser pays the vendor for 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.
CPA (Cost Per Acquisition):
The advertiser pays the vendor for every time a user who engaged with the campaign completes a transaction. Since it’s difficult to know definitively what role the ad played in the final conversion, this can be a tricky model to implement fairly. As long as a person completes the transaction within a certain amount of time after they see or click an ad, the vendor can attribute that conversion to the ad campaign and charge the advertiser accordingly.
We use a dynamic CPM model because it best aligns the retargeting platform to the interests of our advertisers (you). Dynamic CPM pricing combined with no minimum spend ensures that the retargeting platform optimizes for the specific goals of the advertiser (at the risk of the advertiser canceling the campaign). For you, it ensures greater transparency, flexibility, and control over your campaign.
Dynamic CPM pricing encourages transparency and allows us to optimize for your specific goals, whether they are CPC, CPA, CPL, or any other key performance metric.
Retargeting platforms that price on a cost-per-click (CPC) or cost-per-acquisition (CPA) model have an incentive to hide the actual cost of media and where the ads run, so that they can increase margin without alerting the advertiser. If a vendor purchases media on a CPM and translates it back to a CPA, they are less inclined to share their margins or reveal which inventory sources are driving the best performance.
With dynamic CPM pricing, we can focus on customer goals and adjust campaigns based on their specific requirements, while remaining transparent about which inventory was used to deliver the best results.
There are a range of campaign types, and even a single advertiser might want to accomplish different things from one program to the next. A pricing model shouldn’t dictate campaign goals.
Dynamic CPM gives you the flexibility to appropriately target audiences at any level of the purchase funnel (awareness, intent, etc.) and for all different types of campaigns (reengagement, product announcements, content marketing, etc.). That way, your marketing strategy isn’t restricted to a limited set of outcomes simply because your vendor’s goals are rigidly tied to a certain result. Pricing on dynamic CPM gives advertisers the option of running a variety of different campaigns, targeting a wider spectrum of users, and optimizing those campaigns over time to meet a range of advertising goals.
Ultimately, we believe the pricing model shouldn’t steal focus from achieving (and measuring) actual campaign results. Your goal is to maximize ROI, but how you measure this may differ depending on your campaign type and goal.
You may want to tweak a campaign in ways that actually lower performance, such as adjusting frequency caps, running a seasonal flight, or excluding publishers. If the retargeting platform is only rewarded for clicks or conversions, there is no incentive for allowing those campaigns or for reporting on their success.
By structuring pricing around dynamic CPM—the same model we use for buying inventory—we can focus on meeting campaign goals without having to worry about arbitraging our media spend.