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Amazon Sponsored Display - CPC vs. vCPM

Jeremy Brown
|
July 6, 2022

What’s the difference between Amazon CPC and vCPM cost models?

It’s important for brands to measure their digital marketing metrics, including comparing CPC vs vCPM (cost per thousand viewable impressions). CPC is based on the number of actual clicks the ad receives, while vCPM is based on the number of times an ad is viewed, regardless of whether shoppers click on it or not. Sponsored Display vCPM adheres to the MRC definition for an ad view: at least 50% of the ad should have been in the shopper’s view port for at least one second for it to be registered as a viewed impression.

CPC = Total Spend / Total Clicks

vCPM = Total Spend / ((Total impressions * % in-view) / 1000)

vCPM is often used for advertisers focusing on brand awareness or delivering a specific message, because this pricing model is more focused on exposure as opposed to a cost-per-click model. 

In Marin, brands can use both metrics, considering the implications of each, for a more comprehensive view of the performance of their ad campaigns. This information will help advertisers better understand the impact of their Sponsored Display campaigns, regardless of whether you are using click-based (CPC) or view-based (vCPM) attribution.

How does Amazon’s vCPM cost model work?

Conversions and Revenue for Sponsored Display vCPM campaigns are an ESTIMATED value that is attributed to BOTH viewable impressions AND clicks (because the cost type is based on viewable impressions - vCPM). To put it simply, alongside the actual Conversions and Revenue generated via the vCPM campaign, Amazon is also including estimated Conversions and Revenue when someone VIEWs your Sponsored Display Ad, but does not click on it.

It's also worth noting that the vCPM Conversions and Revenue are attributed to your brand sales and not the products in the campaign. For example if you run an 'Advertised Product Report' from Amazon you'll notice that the orders and sales do not match what is being displayed in Amazon's UI at campaign level. See below screenshot from a Sponsored Display Advertised Product Report:

 

  • The 14 Day Total Orders (#) and 14 Day Total Sales columns reflect the Cost Type of a campaign
  • The 14-Day Total Orders (#) - (Click) and 14-Day Total Sales - (Click) columns are based on click attribution (CPC Cost Type), regardless of whether your campaign cost type is set to CPC or vCPM
  • Campaign A has parity across all 4 columns - because it’s campaign Cost Type is set to CPC
  • Campaigns B to M, unlike Campaign A, differ because their campaign Cost Type’s are set to vCPM - the (Click) columns are your actual Orders and Sales, whereas your non-click columns are a combination of actual Orders and Revenue as well as Amazon’s estimated Orders and Revenue based on your ad being ‘viewed’.

Example

Campaign C generated 8 orders with a total revenue of £112.96 and to identify the estimated view Orders and Revenue, you subtract the (Click) column away from the regular column;

207 [14 Day Total Orders (#)]  -  8 [14-Day Total Orders (#) - (Click)]   =   199 estimated ‘view’ Orders

£2,564.39 [14 Day Total Sales]  -  £112.96 [14-Day Total Sales - (Click)]   =   £2,451.43 estimated ‘view’ Sales

How does this impact reporting of Amazon Sponsored Display campaigns in Marin?

Regardless of the cost type that you specify when creating your Sponsored Display Campaign (CPC or vCPM), Marin is able to report on both attribution models against that campaign.

For example, if you create a Sponsored Display campaign with vCPM as the Cost Type, Marin is still able to show you the Conversions and Revenue generated from the ad being clicked on (CPC Cost Type), alongside the ‘estimated’ view Conversions and Revenue (vCPM Cost Type) that Amazon is providing, and vice-versa. 

In the screenshot above you can see that, regardless of cost type, for a Sponsored Display campaign Marin is able to report on both traditional Conversions and Revenue (click based) and also the ‘view’ Conversions and Revenue - which is the combination of both actual and estimated Conversions and Revenue set by Amazon.

The table below shows the Conversion Types available via the MarinOne column selector that you can bring into view alongside your Sponsored Display campaigns.

How should I bid on this activity?

The decision is entirely yours. In Marin you have the option to either bid based upon actual clicked Conversions and Revenue or use the estimated ‘View’ Conversions or Revenue to target a CPA or ROAS goal - regardless of the cost model you’ve chosen to set up for your Sponsored Display campaign.

If your goal is performance (CPA / ROAS) Marin’s recommendation is to optimise towards actual clicked Conversion and Revenue and not ‘View’ Conversions or Revenue (even if your campaign is set to vCPM) because this is the actual performance of your Sponsored Display campaign and not an ‘estimated’ number of Conversions or Revenue. 

If you've used Marin's automated bidding tool to manage Bid Strategies for other publishers, then managing bids for Amazon Advertising accounts should be pretty familiar. Marin manages keyword-level and target-level calculated bids and supports all ‘performance’ Goals for your Amazon activity:

  • Maximise Conversions to CPA
  • Maximise Revenue to ROAS

If your goal is awareness advertisers and registered sellers in CA, DE, FR, ES, IT, IN, JP, UAE, UK and the US can set up an “Optimise for Viewable Impressions” strategy directly in the Amazon Ads UI to help create product awareness.

If you have any further questions related to the above please reach out to your Account Representative.

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