What is Baidu's oCPC bidding model

oCPC (Optimized Cost Per Click) means conversion bidding. This bidding method has been discussed in the search channel for years and is now commonly used on Search and in-feed ad platform （信息流广告平台. So, what exactly is conversion bidding? Let ’s take a look here.

To bid by conversion, you first need to set the conversion goal of the advert based on your own goals and then bid on the acceptable cost per conversion (CPA/CPL/CPS).

Conversion goals usually have two categories, namely Mobile App Downloads and Lead Submission. The goals of mobile app promotion are usually the number of downloads, installations, activations, in-app behaviour (registration, payment, etc.). On the other hand, the lead submission category usually includes the lead collection (form submission), online consultation, adding items to the shopping cart and checkout payment, etc. In the actual bidding process, the system will also estimate the click-through rate (CTR) and conversion rate, and then finally determines whether the ad will be displayed to the target audience. The important point here is the estimation of click-through rate and conversion rate as it requires the system to have a large data sample for the algorithm to improve the accuracy.

Meanwhile, the setting of conversion goals and target cost per conversion is particularly important. It is the key factor that determines the success of advertising. This requires advertisers to be fully aware of the performance of a given platform, and the differences in the effects of various products on that platform. If it is a new product or a new distribution channel, it is recommended to conduct the testing through the traditional bidding method in the early stage. After testing the initial performance of the ad platform, the bidding strategy can then be switched to oCPC (conversion bidding).

Theoretically, the ad campaign performance of conversion bidding is better than traditional CPC or CPM method, but due to the fact that this method itself has a threshold for data accumulation, it may not be as always the case for advertisers with small ad spend. Meanwhile, advertisers need to pay attention to changes in ad delivery volume and build up solid advertising plans with different goals and bid methods to achieve balanced traffic flow.