Promotion School: what is CPS and what are the pitfalls here
How does the purchase of traffic using the CPS model work? What are the pitfalls when working with such traffic? Nikolay Marchenko, a media buyer at Mobio, told about this as part of a series of articles “School of Promotion”.
Nikolay MarchenkoWhat is CPS?
CPS (Cost-per-Sale) is the payment of advertising for the purchase made in the game by the attracted user, that is, the scenario when the advertiser pays for the event only after he receives payment for the purchase inside the application.
CPS is the most expensive work option. The payout usually significantly exceeds the purchase price and is the same for all payment options (especially in games, because there are not so many options).
Why is it significantly higher?
Because only the first purchase is paid for within 7-30 days, which means that users who have made a purchase can do it again. Plus, it is assumed that once a purchase was made by one attracted user, then other users can also go for it over time.
Some advertising partners in CPS also pledge a certain percentage of the money that the advertiser will receive from the attracted users. This value can range from 30% to 200%. Such a system is called Revenue Share.
How to collect data?
A prerequisite for working with this model is to install the necessary SDKs, depending on the traffic source. This is necessary not only to determine the number of events, but also to optimize traffic for a specific event.
How to calculate the cost of CPS?
If the application is new, then you can take the average market value of CPS to start, which can suggest the agencies that advertisers will work with, or start from the recommended rates in the sources. And then adjust these values.
If the application already has a user base and, for example, purchased traffic using the installation payment model, then you can calculate the average cost of a user who makes a purchase within the first 30 days after installation.
Should the advertiser work according to this model?
It is definitely worth trying if, according to statistics, payment occurs in the first few days. In this case, you will be able to buy high-quality traffic in large quantities.
Separately, it is worth noting the games where there is a promotion for the starter kit, which is valid for 3-4 days from the date of installation. This is the case when CPS fits perfectly.
In other cases, if the payment does not always occur in the first days, but usually goes after 2 weeks or more, then this payment model will be very slow to recruit new users and in the future will be ineffective (it will not scale quickly).
The most profitable payment model for yourself can be found only through tests.
See also:
- What is an offer?Who is an advertiser?
- What is an advertising network and how to work with it?
- What is an advertising inventory?
- What is an advertising mediator?
- What is CPI?
- Who is a publisher?
- What is an advertising conversion?
- What is vertical in advertising?
- How can the arbitrageur regain interest in the offer?
