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We're excited to announce a major update to Promote – the bidding system. This is designed to empower users to more effectively reach potential buyers and optimize their promotional strategies.
We're excited to announce a major update to Promote – the bidding system. This is designed to empower users to more effectively reach potential buyers and optimize their promotional strategies.
Advertisers set their bid amounts in terms of what they are willing to pay for every 1000 impressions.
- CPM (Cost Per Mille): Advertisers pay for every 1,000 impressions of their ad.
- Auction System:
- Ads are placed in an auction format where multiple advertisers compete for the same audience.
What is the maximum bid you can make on Promote?
Currently the maximum bid on Promote is $100.
How much will I be charged if I have the winning bid amount?
When you place a bid, you’re only charged $1 more than the next highest bid. This ensures you pay just to outbid others without overpaying.
Scenario 1: Advertising with a $5 Budget and $100 CPM Bid
Let’s pretend you’re running a digital ad campaign for your track with a total budget of $5. You decide to set a maximum bid amount of $100 for every 1,000 impressions (CPM).
Key Components:
- Bid Amount: $100 per 1,000 impressions (this is the maximum amount you’re willing to pay for 1,000 views of your ad).
- Total Budget: $5 (the maximum amount you are willing to spend for the entire campaign).
Cost Breakdown:
- Impressions:
- Since you’re bidding $100 for 1,000 impressions, your cost per impression is:
- Cost per impression=100/1000=$0.10
- With a $5 budget, you can calculate how many impressions you can afford:
- Total Impressions = Budget/Cost per impression = 5/0.10 = 50 impressions
- Since you’re bidding $100 for 1,000 impressions, your cost per impression is:
- Potential Reach:
- With your $5 budget at a $100 CPM, you can expect to reach a total of 50 impressions before your budget runs out.
Conclusion:
With a $100 CPM and a $5 budget, you can achieve 50 impressions of your ad.
To increase visibility, you may want to lower your CPM bid, allowing for more impressions within the budget, or consider increasing the budget if you want to reach a wider audience. Adjusting these factors will help you achieve better results for your advertising campaign.
Scenario 2: You vs. a Second Bidder
Let’s assume you’re running a digital ad campaign with the following details:
- Your Bid: $100 CPM (you’re willing to pay $100 for 1,000 impressions).
- Second Bidder’s Bid: $90 CPM (the competitor is willing to pay $90 for 1,000 impressions).
- Total Budget: $5.
Auction Dynamics:
- Winning the Auction:
- In this auction-based model, you win because your bid of $100 CPM is higher than the second bidder’s $90 CPM.
- However, the price you pay is not always your full bid of $100 CPM. Instead, you only pay $1 more than the second-highest bid. So in this case, you pay $91 CPM, which is $1 more than the second bidder’s $90 CPM.
- Cost per Impression:
- Since you’re paying $91 for 1,000 impressions, your cost per impression is:
- Cost per impression:
- 91/1000=0.091 per impression.(Cost per impression)
- Total Impressions:
- With a $5 budget and paying $0.091 per impression, you can afford to reach:
Total Impressions=5/.091≈ 54 impressions
The new bidding system on Promote offers you a dynamic and cost-effective way to maximize your ad campaigns. By understanding key concepts like CPM bidding, auction dynamics, and cost per impression, you can tailor your strategies to fit your goals and budgets. Whether you’re aiming to make the most of a small budget or outbid competitors for premium visibility, these updates provide the tools to refine your approach and reach your target audience more effectively. Experimenting with bid amounts and budgets will help you discover the optimal balance for achieving meaningful results in your campaigns.
Additional Resources:
