dCPM stands for Dynamic Cost Per Mille. It’s a variant of the standard CPM pricing model. This dynamic pricing model provides more advantages to the advertisers to reach their goals.
Those who want to understand about dCPM model will get clarified by reading this article.
What is dCPM?
The expansion of dCPM is dynamic cost per mille. That means, cost for each ad impression will vary based on many aspects like goal, competition, domain, time, placement, etc.
Example:
When you run an advertising campaign, you have two options to choose the pricing model.
CPM (Flat CPM)
dCPM (dynamic CPM)
Let’s take, you choose the CPM pricing model and give the CPM price as $10. In that situation, the cost for 1000 impressions is $10 and the cost for 1 impression is 10/1000 = 0.01.
So, this campaign spent 0.01 for each delivered impression. Due to the static price, this campaign will deliver its expected impressions. If this campaign budget is $20 then it will deliver 2000 impressions.
How does the dCPM model work?
In a fixed pricing model, the price should be fixed for each impression. But, the price varies in a dynamic model to achieve the desired goal.
When you choose the dCPM model, you should select the expected goal for your campaign. You can set CTR, CPA, VCR, etc. Also, you need to provide an average cpm price for your campaign.
Let’s take, you have selected the dCPM pricing model and kept the expected goal as 0.30% CTR and give average cpm price as $10. Instead of CPM price, we only provided the average price. That means, the platform can adjust the bid price for each impression but the average cost for 1000 impressions will not be higher than $10.
Here, we gave the goal instruction (0.30%) and average cpm price $10 to the ad campaign. If the CPM price is $10 then the bid price for one impression is $0.01. In the dCPM model platform can adjust the bid price of each impression based on the goal expectations, competition, placements, domain, etc.
Bid from user 1 : Let’s take, the platform identifies that the chance of this user will click this ad is high based on historical data. In that situation, another advertiser also bid against this ad impression with a $0.015 bid price.
Here to win, our ad platform raises the bid price to above the competitors bid price example: $0.017 or $0.018 etc.
Bid from user 2 : Already, the platform spent additional few cents to win the above impression. To maintain the average cpm price, here the platform reduces the bid price example: $0.008, etc.
Likely, the ad platform calculates and adjusts the bid price for each impression to reach the desired goal.
What is the difference between fixed and dynamic CPM?
Already, I wrote a detailed article regarding the “differences between CPM and dCPM“. You can read that article also.
Expansion:
CPM : Cost Per Mille
dCPM : Dynamic Cost Per Mille
Other Names :
CPM : Flat Bidding
dCPM : Dynamic Bidding or Automated Bidding
Bid calculation method :
CPM : It never adjusts the bid price, that means the price is fixed.
dCPM : Adjusts the bid price to reach the desired goal.
Goal Achievement:
CPM : It doesn’t adjust the price so it can’t achieve the goal under certain conditions.
dCPM : It can achieve the goal because of the flexibility in bid adjustment.
Campaign Types :
CPM : Flat bidding is more suitable for brand awareness campaigns.
dCPM : Dynamic Bidding is more suitable for performance based campaigns.
Conclusion
Flat bidding and Automated Bidding are the two common types of pricing model available in the ad platforms. Based on your campaign type you can choose the pricing model. Dynamic bidding can adjust the bid price for each impression based on the competition, placements, domain, probability for goal, etc.
