What should I set up as Initial CPM? Should it be high?
At the beginning of a campaign, there are many benefits to have the CPM you bid to be as high as possible. In general, having a high Initial CPM will help the reach of your campaign and, somewhat counter-intuitively, also to have lower media costs/better performance. These are some of the reasons why:
Soft Price Floors: Some publishers configure what is normally called “soft price floors”. This means that a price-floor can be used only to define the minimum bids accepted, but not to determine the winning price. Let’s see it with an example: If a publisher has a soft price-floor of $10, this means that any time you bid for less than $10, your bid rate or win rate (depending on the SSP) will always be 0%. However, if you bid over $10, you can win the auction and pay a price that is below $10. In fact, if nobody else has placed a bid for that impression, the price you actually have to pay may be considerably lower.
Selective callouts: Most supply partners have a selective filtering process on their side by which they will send us more inventory of any given characteristics the more we bid on them. If your campaign, with its particular targeting, is not bidding because it is below the price-floor, you may get little inventory if not many other campaigns in our system are bidding for the same exact target. However, if you bid higher and win, the ad exchange will automatically start sending us more of that compatible inventory (some times with a lower price-floor).
Learning process for pricing algorithm: If your campaign has some pricing goal beyond CPM, the CPM it bids may be automatically higher than the initial CPM once you can enough “goal events” (i.e. clicks, conversions, video starts…). However, if your initial CPM was low, the initial set of data that the campaign has gathered in order for our pricing algorithm to calculate its optimum CPM is going to be heavily biased by publishers with low price-floors, which may not necessarily be the best performing ones. By starting with a higher CPM, which in any case will only apply for a small period of time (you can soon configure a CPC) you have a wider selection of publishers to gather its initial data from and increase the changes of the campaign being successful in the long run.
We recommend your CPM to be high to begin with, even if it is only for the first few hours. What high means will depend on the country your campaign is running on (France will require higher CPMs than India), the format (Video CPMs should be higher), etc… Anything between $5 and $30 may make sense. But if you feel uncomfortable having a high CPM for your whole campaign, you can always just set it in a specific strategy and control how much of your budget you spend with this strategy using its spend limits.