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Bidding, Commissions, and Auctions 10/24/2016 11:42:00 AM

Traffic sources are always trying to maximize their EPM by maximizing your
Convenience and economic risk

Fill rates: how many potential impressions are being filled

Traffic sources will charge you in a number of ways:

Per impression (CPM)
Each impression has its own cost (usually for 1000 impressions)
Flat self-serve CPM (for a single impression)
Per click recorded by the adv not you

CPM: cost per million

You pay per 1000 impressions (m=mille)

CPM: cheap traffic, CPC

CPM charges u regardless of the outcome
Most traffic sources will favour CPM over any other
Higher cliq thru rates= lower CPC

CPC: advantage: ur paying for something that is tangible

There is always an effective cost per click and per impression

If youre bidding CPC you can calculate on CPM or CPC

Commissions and Conversions

SOI: adv just wants leads, emails, phone numbers, even if theyre poorly

DOI: submit email and verifying email

Another step, so less conversion. But the fact that epopel did it means more
intent by the user
For a pub: costs more to get better data which the pub needs
conversions for to look into. Pubs cant track throughout the

Auction Models:

What do we pay and what does it come from?

The amount you pay relative to the bid is not always the same. It comes
from the systems used and algorithm types and competitions.
You need to bid higher for an impression when theres more competition.
So what you actually have to pay depends on the competiton.

Auction types that are reflected in bidding modes and auction modes:
Vickrey- Clarke-Groves:
o Silent auction, no one knows how much you bid
o The person who bids highest wins, but pays whatg the 2nd
higher person bid
o Used by FB- doesnt reward low bids
oFB low bidding leads to low quality traffic
related to Generalized Second Price Auction
oThe second highest bidder gets the first impression slot.
oMakes sense when theres an enciroment where theres a lot of
things to buy
o Makes it easy to show bidders their position compared to
everyone else
o Used by google, adwords, and lots of display sources
o Rewards conservative bidding
o First price sealed bid (blind auction)
Highest bidders wins impressions

Youre basically in the stock trading market

Everything is being reconciled and recalculated
The experience u have in a platform will lead to effective bidding strategies,
Funnels and Landers:

What is a sales funnel?

The construction that you form around the product in terms of efforts to
drive the user to convert and for sales. Follow-up calls and emails are also
part of the funnel.

In your funnel, where would people bounce out? How do you split test?

Bounce rates: where people leave the page or funnel

Funnels often breaks things into smaller user commitments to increase their
intent to increase conversions. Basically its the way to maximize the value u
can monetize from a user. Its the process from A-Z, like going to ikea.

Banner will not convert easily, itll take you to a LP that will help convert.

LPs should load fast: amaozns reduction from 4s to 3s in the shopping cart
page, made them millions.

Ad copy: the words you sell

Week 3 10/24/2016 11:42:00 AM

Split Testing

What is split testing?

Split testings goal is to improve something, ie improving click thru rate or


What do we test? The banner itself

-ad types
angels and ad copy
10/24/2016 11:42:00 AM