Since April 2018, a new principle of traffic purchasing has been in effect in Yandex.Direct search advertising. If earlier bidding was for positions, now it is for traffic volume. The pricing principle has not changed. In search advertising, a VCG auction (Vickrey-Clarke-Groves) is in effect inside blocks. Additional payment is made only for additional traffic that advertisers receive after placing ads in higher positions.
Review of popular bid managers
The most common type of advertising issuance is 3-4 ads under the search bar and 4 ads below, under the organic results.
Let's consider the operation of the VCG auction using an example. Let's assume that four advertisers are vying for three places in the top block, bidding 10, 7, 5, 2 rubles. For simplicity of calculations, let's agree that the CTR and quality coefficients of the ads are the same. Consequently, the desired positions will go to advertisers with bids of 10, 7 and 5 rubles.
Under these conditions, the first georgia email list advertiser will receive 75% of the traffic at the same price as the second and third, i.e. 2 rubles each, and he will receive 10% of the clicks at the same price as the second advertiser - 5 rubles each. And only for those additional 15% of the traffic that he is entitled to as the winner of the auction, he will pay 7 rubles per click. In the reports, the advertiser sees the average cost of a click:
CPC = (2r x 75 + 5r x 10 + 7r x 15) / 100 = 3.05 rub.
This means that with a bid of 10 rubles, the first advertiser actually pays 3 rubles 5 kopecks for clicks. As a rule, in a VCG auction, the written-off click price is almost always less than the bid.
If all advertisers raise their rates (to 15, 12, 10 and 7 rubles), then the price per click will be much higher:
CPC = (7r x 75 + 10r x 10 + 12r x 15) / 100 = 8.05 rub.
This is called warming up the auction.
For use in search campaigns, it is recommended to calculate sincere bids - maximum bids corresponding to the profitability limit. To determine them, you can use the built-in eLama calculator. Let's figure out how the use of a sincere bid affects the click price.
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Example 1. Unheated auction
Let's assume that all advertisers' CTRs are equal to 10%. The CPM indicator is important for distributing positions in the search results: the system will place the advertiser's ad in a more advantageous place if it brings in more income per 1000 impressions.
Let's assume that each auction participant decided to indicate in Yandex.Direct a pre-calculated honest bid, and for all bidders it exceeds the current one by 100 rubles.
The ads will remain in the same positions, but the budgets will increase by 85%, and this is not the limit, there can be a greater increase. Therefore, overbidding in an unheated auction leads to its rapid heating.