Introducing Cost-Per-Impression Bidding with Pinterest
In class we studied bidding on ads based on cost-per-click slots, but this article discusses how Pinterest has transitioned to auctions on cost-per-impression to set prices on ad slots. What is cost-per-impression? Cost per impression is the cost that advertisers pay for each potential customer who views the advertisement(s). What’s interesting is how clicks and impressions are different metrics to how customers will interact with online ads, and I wonder how they differ and if one way of bidding is more cost effective and better than the other for the companies who bid on the ad slots. According to the article, “In theory, brands will be able to optimize their media spend better to achieve either more impressions or cheaper ad prices with the new tool.” Rather than paying potentially expensive fixed prices for cost-per-impression ads, companies can bid at times where the slot that they want is cheaper than the price that they value the slot at.
But perhaps cost-per-click is a better estimate of how the company’s ads will interact with the customer. An impression can only guarantee a customer simply viewing the ad, but a click guarantees actually clicking and interacting with the linked content. I think that both methods differ in the sense that one pricing is concerned with interaction, while the other pricing style is concerned with visibility. Companies who value how visible their brand/product is may be more interested in bidding on cost-per-impression slots while companies who value more customers interacting with their brand/product will want to bid on cost-per-click slots.
Cost-per-impression Wikipedia page – https://en.wikipedia.org/wiki/Cost_per_impression