Commentary

Bots Change The Rules For CPMs More Than You Think

The CPM has long been our default currency, within both the direct sale of yesteryear and today’s programmatic marketplace. As a marketer, you habitually evaluate the base value of your media by the CPM. But you want to ensure your media spend is as efficient as possible, because you are spending dollars and impressions to actually reach your audience. Unfortunately, thanks to bots, the long-favored CPM is a polluted measure that keeps you from doing so. So, what’s the wiser alternative? Let us consider the human CPM (hCPM): effectively, how much you spend to reach humans.

For example, if you’re comparing two different vendors, if you know the rate of bots for impressions with both vendors, you can calculate the hCPM. Don’t be surprised if this figure looks radically different than the rate card CPM. The hCPM can be calculated by taking the rate card CPM divided by % of human impressions. Thus, if a vendor has 60% bots, it’s 40% human. (hCPM = rate card/ 0.4 in that case.)

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Not on My Media Plan

The classic assumption that only exchange media has bots is demonstrably wrong. Big sites have bots, just as small sites do.  The easiest way to fall victim to bots is by doing content targeting instead of audience targeting. Most bots are on properties that buy traffic, so content targeting is more prone to it. Still, this is not an absolute rule, since some user targeting, such as retargeting, also falls victim to bots. To be diligent on this issue, it’s important to consider your inventory mix and the targeting methods your media team is employing.

While there isn’t a single simple solution, if we start evaluating the bot percentage per vendor, we can start to have the data needed to compare offerings effectively. Don’t expect that you’ll find vendors that are 100% human; the bots take every effort to mitigate, and nothing will work perfectly.

Here’s an example of how you might evaluate two vendors on the same plan. At first glance, they have identical CPMs of $10 -- so the cost seems on par. But if you dig under the hood, the results may surprise you. Suppose one of those vendors, BotsForCash, is delivering heavily toward bots (typical rates across all sites approach 60%). The other vendor, HumansAreBest, takes steps to reduce bots and is only around 10% bots.  

If we compare those same vendors based on their Human CPM, the results are very different. BotsForCash’s hCPM is $25 ($10/0.4) , because 40% of its impressions are to humans, while the HumansAreBest is about $11.11 (10/0.9), for its hCPM. Two vendors that appeared to have equal cost based on CPM now show a radical shift in expense -- and of course, value. This is what happens when we place due value on the human impression over the bot impression. As a marketer, given your focus on ROI, why wouldn’t you?

Shortcuts and easy measures are tempting. After all, the CPM is familiar. But, if you truly care about connecting with and persuading your audience -- who doubtless is human and not bot -- why bear the cost of the shortcut? As marketers, we’ve got to start asking the question and doing the evaluation in order to come to the best possible equation for ROI.

3 comments about "Bots Change The Rules For CPMs More Than You Think".
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  1. dorothy higgins from Mediabrands WW, April 28, 2015 at 3:47 p.m.

    CPMS are derived from impressions across multiple platforms and vehicles.  How about we just factor down the impressions based upon the bots and then we will be able to develop cost comparisons across media.  Remember, we have always used hCPMs for all other media...we just call them CPMs.

  2. Greg Alvarez from iMeil, April 28, 2015 at 7:58 p.m.

    (sic) "Still, this is not an absolute rule, since some user targeting, such as retargeting, also falls victim to bots."

    Would you be so polite as to offer your source or provide/point to certain articles/studies/research that back your assumption?

  3. Niels Meersschaert from Qualia, April 28, 2015 at 9:58 p.m.

    Greg, retargeting is technically very easy to manipulate.  All that is required is to have the bot load the segment pixel and then appear on the target publisher's site to gain impressions and command a higher CPM.  Look at what happened to AdRoll last year http://www.thesempost.com/adroll-retargeting-bot-attack-behind-ie7-traffic-surges/.  Or even the article on Mediapost late last year about retailers and retargeting http://www.mediapost.com/publications/article/240542/retailers-waste-more-than-half-of-digital-budgets.html. Generally speaking, the lower the threshold to the data (like implied intent), the easier it is to manipulate.  That doesn't mean that all content or retargeting impressions are to bots, but marketers should understand the risks.

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