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Retargeting Through CPC or CPA: The Network Perspective

Retargeting Through CPC or CPA: The Network Perspective

Since the retargeting boom through affiliate networks in 2011, the two distinct remuneration models (CPA and CPC) have been a cause of great debate. It’s a discussion worth having and in a position of true impartiality, the pros and cons of each are well worth exploring.

Post View

Retargeting has historically been on a CPC model, similar to search and so the question is asked why post view has suddenly emerged as a viable alternative.

First and foremost, post view retargeters benefit from their ability to tackle the issue that many affiliate managers do not have access to budgets. Advertisers frequently tell me that post view CPA is a considerably easier sell to internal bosses than budget sign off and this has been the spark for the model’s emergence.

Post view windows represent a seemingly risk free route to market as CPA models only pay for a sale. All of the risk sits with the retargeter and with sensible de-duping (i.e. de-duped against all known marketing sources), an advertiser will ensure that post view doesn’t encroach on other marketing channels, guaranteeing incrementality.

Understanding and Rewarding Influence

Retargeters display ads on a variety of social sites including hotmail; great for brand exposure and keeping you fresh in a consumer’s mind but it’s widely accepted that these are not environments to instigate purchases even though they influence sales. Both models seek remuneration for this branding but it’s a tough choice to know whether a click or a view is the most suitable metric.

Those in favour of post view point to recent research that suggest clicks aren’t necessarily the best metric when it comes to understanding influence on sales. comScore (2012) looked into the strength of the click when outlining the relationship between conversion and engagement methods. The conversion rates show clicks to be least effective:

hover/interaction (0.49%) |viewable impressions (0.35%) |clicks (0.01%)

CPC retargeters would respond that the comScore research does not account for highly targeted and relevant banners like theirs and that these holistic stats do not apply to the performance of their campaigns specifically.

Those in favour of CPC will also say that a click is a much fairer method as the user has shown a true intent. They will highlight that post view retargeters can buy cheaper inventory (below the fold) from ad networks and serve impression out of sight from a consumer hoping to secure commission for cheap. This argument is leant credibility by the fact that post view retargeting struggles to offer transparency on specific websites used for promotion and position of ad placement. There can be no such doubt with CPC retargeters who offer transparency and clear user influence by way of a click.

Optimisation

The most successful and sustainable post view campaigns have operated by using the post view window as a testing ground rather than a long term remuneration model. This testing period is a necessity as inventory is purchased on high traffic sites and an understanding of user behaviour is gleaned. The post view window therefore helps to cover this risk and cost of a new campaign, note though that a successful retargeter will seek to optimise and eventually move to a purely click based CPA.

Click based retargeters will ask for a budget up front to carry out the same optimisation test but these tests come with more risk since the budget is eaten into by clicks rather than sales.

Conclusion

Both models work, there can be no denying that. Arguably the most successful retargeter works on a CPC but within the affiliate channel, the most successful are those who begin working on a post view CPA, eventually moving to a post click CPA.

With the right constraints on de-duping, ad visibility and website placements I would work with a post view retargeter hoping to move to a post click CPA after a suitable test period. To encourage debate, I’d like to ask; if the sale arrives, does it really matter whether it came from a view or a click?

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Chris Said

Chris Said

Chris Said has worked at Affiliate Window for two years with experience both advertiser and publi

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