Have you ever wondered if the price floors and other preferences you set in your Google Ad Exchange (AdX) settings actually affect the performance of your campaigns? Well, we were curious, and so we managed to find data that indicates to what degree setting pricing rules for direct response campaigns could actually change the campaign's performance.
Our data shows that we have positive correlation between pricing rule and click-through rate (CTR). For example, ad impressions priced at $30 result in a 0.75% CTR, compared to 0.2% to 0.3% CTR for impressions at the $5.00 mark.
The correlation we see indicates that the pricing used by AdX can directly influence the key performance indicators (KPIs) seen by the advertisers. Armed with this knowledge, you can experiment with pricing rules and, using your own data, you can effectively select the performance of your ad campaigns by setting pricing rules corresponding to the CTR that you want.
Click-through rate per AdX pricing rule
It's equally important for advertisers to understand how pricing rules affect CTR, especially if CTR is the primary KPI for a campaign.
For example: if an advertising campaign has a target KPI of 0.5% CTR, then the budget for the campaign should also take into account the pricing rules needed to return that CTR ” which, according to this data at least, should be in the ballpark of $10. If the advertiser had expected to reach a 0.5% CTR while paying a $2 CPM (cost per thousand impressions), they wouldn't be happy with the actual results.
It's important for publishers to understand how AdX settings can impact KPIs like CTR, and it's equally important to ensure that their advertisers understand the correlation too. Being transparent about settings that can impact campaign KPIs can only improve the advertiser-publisher relationship - and is accomplished by managing expectations and ensuring that goals are aligned.
Sortable has been exploring how the different technologies we use affect our KPIs. We think it's important to realize that the technologies used to manage your ad operations can change how ads are served, and that those changes can have consequences for your business.
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