Cost-per-click (CPC) line items compete against CPM line items based on their calculated effective cost per thousand impressions (eCPM). This calculation is dependent on a number of variables, including the age of the campaign and whether the network is optimized.
Pricing rules are not applied at all during the first few days and are not applied on a small percentage of requests throughout the lifetime of the CPC line item. This is because we need to collect data on the click-through rate, to convert the CPC to eCPM for use in the auction.
Start-up vs. steady-state logic
Because CPC ads use a calculated eCPM to compete against CPM ads, it’s important to let them accrue value before calculating their individual eCPM. If eCPMs were calculated immediately based on the line item’s true CTR, it would not serve because it would start with a CTR of zero. Applying a separate start-up calculation allows ads to compete fairly within the network from the get-go.
Non-optimized vs. optimized networks
Non-optimized networks
For networks that don't use Optimization:
- If our system has logged clicks for a creative, its empirically-calculated CTR is used to calculate its eCPM.
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If the creative is new or our system has not logged any clicks, the creative’s eCPM is based on:
- Its line item’s CTR if the line item has 100,000 or more impressions; or
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A system-wide CTR if the line item has fewer than 100,000 impressions.
Networks using Optimization
For networks that do use Optimization, eCPM is calculated based on a CTR that is determined by a predictive model, which aims to generate a more reliable estimate than the default system-wide CTR.
See the available features for Programmatic Direct.
