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Performance metrics – Which ones should I check?

Discussion in 'Display Media Buying' started by Mobidea, Oct 1, 2015.

  1. Mobidea

    Mobidea Affiliate Manager Affiliate Manager affiliate

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    Today, I am going to give you a clear image of what you should take in consideration when you’re launching or analyzing campaigns/performances. But before that, we need to distinguish some basic definitions.

    Earnings per thousand impressions (eCPM): The abbreviation can be tricky because eCPM works with gains and impressions. This is mediabuyers’ main reference, our compass! Calculating the earning per thousand impressions will offer you more accuracy to measure your performance and be able to place your bid. We will know how many gains we got and how many costs we should have in maximum to have profitable campaigns. This value will give you a reference but you need to analyze and compare it with other features to take conclusions. To calculate eCPM you can use the formula:

    [​IMG]

    Payout: Payout is value that you will gain for each conversion. In Mobidea you can notice different payouts per segment (country > operator > operating system) because we have more than one offer rotating inside each segment. The payouts can vary a lot between countries and usually the most expensive countries have higher payouts. One of the main factors to define the payout is the billing. A simple billing with one step will convert more easily than a billing with 3 or 4 steps before the conversion.

    Conversion Rate (CR): This ratio will tell you how many impressions you need, in average, to get a conversion. The CR has also positive correlation with billings and websites and targets performances.

    Bid: The maximum value you are willing to pay for a thousand impressions. If you’re launching the campaign you should have in consideration the country, impressions available and spots characteristics. In other hand, if you run the campaign and collect data you can calculate your eCPM to adjust your bid.

    Cost per Thousand Impressions (CPM): To compare costs and gains correctly, mediabuyers use the thousand impressions as a reference. CPM provides you how many costs you had in average to get thousand impressions.

    Effective Cost per Acquisition (CPA): An average of how many costs you had until you get a conversion.

    [​IMG]

    Now let’s face some myths:

    “Belgium payout is 14.70€ and India payout is 0.35€, so Belgium will be most profitable”

    It’s very common to see affiliates confusing payouts with performance. As we told you before, payouts don’t measure profitability. With payouts we have an idea of what we will receive for each conversion. If you receive hundreds of small payouts you can make more money than with few huge payouts. The key point in this myth is the CR. The best balance between CR and Payout will make the difference in your performance. Also, the payout is really important to set the amount of traffic you need before optimizing. If you are promoting an offer with an average payout of 0.40$, spending 30$ in the campaign is enough for you to start optimizing it. On another hand, if you promote, for example a PPS offer, where the payout can be 70$, you will need to spend 500$ or more to have data to optimize properly.

    “With lower payouts I won’t have good performances”

    Some affiliates are afraid to work with small payouts. Once again, the payout is not the best performance metric. You always need to be focused on the eCPM.

    “Mobidea’s opportunities shows eCPM=132.43€ for Portugal/MEO and I only got 87.30€”

    Let’s focus on Mobidea’s eCPM. Your eCPM is calculated based on your gains and the visits that reached Mobidea. When we provide eCPM’s we get aggregated data from mediabuyers, webmasters, networks and social networks. Their performance may vary between them but we have the global average from all the accounts. When you work with Mobidea your account will reflect only your results. You may have a lower, similar or even bigger performance than the main average according to the quality of the users.

    “I only work with big ratios”

    Lower ratios don’t have necessarily less gains. When you check CR’s you should also look to payouts and the eCPM’s. Consider the same amount of impressions for the following scenarios:

    Scenario 1: CR = 1/20; Payout = 0.50€; Revenue = 25€.

    Scenario 2: CR = 1/40; Payout = 2€; Revenue = 50€.

    A higher payout can compensate a lower CR. Each segment has different behavior, your traffic quality also influence the ratios, the offer’s flow, etc. You must look at all the data you have, compare similar parameters and work according them. In those scenarios the one with lower CR has a better performance, because have the best combination of CR vs Payout vs eCPM.

    Working with high CR’s will provide you data sooner and that’s a huge advantage to mediabuyer’s.

    “Portugal global eCPM is 25€ and my Payouts were 1€!!!”

    Payouts are not eCPM. We should always look at eCPM’s to analyze performances, the real gains per thousand visits. You can have good performances with low payouts and bad performances with huge payouts. To compare performances you should calculate your eCPM.

    “If Mobidea shows eCPM=25€ it means that I will receive 25€ if I get 1000 impressions”

    It’s false! The eCPM shows an average of all Mobidea’s accounts for a specifc segment. This means that eCPMs are not fixed numbers. To reach that eCPM you should get 25€ in average for a thousand visits (not impressions) in Mobidea. If you get a thousand impressions, you need to check how many were counted as visits in Mobidea and then check how much your signups had done.

    “How many signups will I have with an eCPM=20€?”

    It depends. You can have only signup, you can have many of them or none of them. eCPM is an average. For example, with a 1€ payout, in a thousand visits you have 10 signups and in the next thousand you can have 30. The average will display 20€ per thousand impressions. Also, with one thousand visits, you can have one signup with a payout of 20€ or 20 signup with a payout of 1€.

    “I sent the same amount of traffic than my friend and I got less revenues”

    Even with the same traffic source and with the same offers, the performances won’t be the same for everybody. The eCPM’s are an average of all performances. The banner spot, content, the payout or the operators can explain different performances for the same amount of traffic. Optimize your campaigns, look for the best combination of offers VS traffic characteristics to get the best performance possible.

    I think this article can be a useful help to clarify and distinguish this concepts. When you check Mobidea remember that your performance is made by a combination of different factors and not only by a specific payout or a good conversion rate. The eCPM is always the best metric to take into consideration when you want to know

    If you have any doubt or question please comment below. Cheers!
     
    T J Tutor likes this.
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