How do CPM and cost-per-click work in-game?
Posted: Wed Mar 08, 2023 4:24 pm
While I understand advertising economics IRL, I don't really understand how they work in-game. If I am in a city of 1,000,000 people and the media company has a reach of 50% and a CPM of $1 and my budget is $10,000 per month, does it work like this:
Reach of media company (in people) = 1,000,000 x 50% = 500,000 people
Budget of $10,000 at $1 CPM = 10,000,000 ad impressions per month
This means in a month each person (within that half of the city's population) on average is exposed to the ad campaign 20 times.
How does all this impact the game's brand awareness variable? That is, what trade-offs am I making when I choose a media company? Based on a post from a couple of years back I saw, I just need to worry about ratings and budget:
- Ratings of a media company are a cap on the game's brand awareness value, that is, a 50% reach media company will cap out at 50 brand awareness. To get to 100 you would need to commission two 50% media companies at the same time.
- The rate at which you gain brand awareness is proportional to how much money you put in.
Therefore, is CPM only important for deciding the cheapest way to deliver a fixed number of impressions, e.g. Media company A is reach 50 and $1 cpm and Media company B is reach 50 and $2 cpm, so A is always the best choice?
Reach of media company (in people) = 1,000,000 x 50% = 500,000 people
Budget of $10,000 at $1 CPM = 10,000,000 ad impressions per month
This means in a month each person (within that half of the city's population) on average is exposed to the ad campaign 20 times.
How does all this impact the game's brand awareness variable? That is, what trade-offs am I making when I choose a media company? Based on a post from a couple of years back I saw, I just need to worry about ratings and budget:
- Ratings of a media company are a cap on the game's brand awareness value, that is, a 50% reach media company will cap out at 50 brand awareness. To get to 100 you would need to commission two 50% media companies at the same time.
- The rate at which you gain brand awareness is proportional to how much money you put in.
Therefore, is CPM only important for deciding the cheapest way to deliver a fixed number of impressions, e.g. Media company A is reach 50 and $1 cpm and Media company B is reach 50 and $2 cpm, so A is always the best choice?