# [METHOD] Ultimate Guide To Profits On RTBs

Discussion in 'Making Money' started by Optic88, Aug 29, 2015.

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No matter what paid traffic source you're working with, the backend technology is an ad server.

The ad server is in charge of calculating which ad is to be served milliseconds before a page load. Once a winner is calculated the ad is served on the publishers web site or app and the advertiser is charged for the impression.

One thing I want you to take note of, is how the ad server is calculating all of this based on the price of an impression.

Now

You may be asking yourself how does this work if I am paying per click?

Even if you pay per click the most ad servers still rank you based on what?s called your eCPM (Estimated Cost Per Thousand impressions).

Say an advertiser was bidding \$1 / CPM - then their eCPM would be \$1.

However....

With a CPC bid it gets a bit more tricky.

Say you are bidding \$.15/click and you have a average CTR(Click thru rate) is 1%.

That means that out of 1,000 impressions you would get on average 10 clicks at a price of \$.15/click.

This would make your eCPM \$1.50. The formula is:

1000 * CTR * CPC = eCPM so in this case: 1000 *.01 *.15 = \$1.5

So in the example above, if everything else was equal you would win the auction bidding \$.15/click.

But here's the kicker:

If your CTR dropped down to 0.5% you would lose the auction 1000 *.005 *.15 = \$0.75

Most marketers would simply raise their bid. Others would add a few new creatives.

A few would write off the campaign as a loss and move on...

To be honest, once your campaign gets to this point on most RTBs it?s DEAD.

The reason for this is very simple:

If your CTR was already dropping while you were the very first ad shown, just imagine your CTR at position 2, 3, 4, etc. *Hint not very good.

So it is an endless cycle and your campaign will eventually die off.

Instead of setting up one campaign with \$1,000 daily cap targeting US mobile traffic.

Break up the campaigns like so:
US - iPhone - 300x250 : \$250/day @ \$.05 CPC
US - iPhone - 320x50 : \$250/day @ \$.05 CPC
US - Android - 300x250 : \$250/day @ \$.05 CPC
US - Android - 320x50 : \$250/day @ \$.05 CPC

Each campaign would have 10 of the SAME banner.

Want to test another creative for the same ad size?

Your campaign break up would then look something like this:
US - iPhone - 300x250-1 : \$250/day @ \$.05 CPC
US - iPhone - 300x250-2 : \$250/day @ \$.05 CPC

Also, I like to always start a campaign with the minimum bid possible.

This allows me to see how much traffic I can get at that rate & test the quality of traffic.

If for whatever reason, I can't get traffic at that rate only then will I raise the bid.

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