How to Reduce CPM in DV360

DV360, or Display and Video 360, is one of the most powerful programmatic advertising platforms for running display, video, and other digital campaigns. It gives advertisers access to premium inventory, advanced targeting, and smart bidding strategies. However, one challenge that many advertisers face when using DV360 is controlling their CPM (Cost Per Thousand Impressions).

CPM is an important metric because it directly affects your campaign costs and return on investment. If CPM is too high, your campaign becomes expensive, and you may struggle to achieve profitability. Reducing CPM while maintaining quality impressions can help you reach more people within the same budget and improve your overall results.

In this blog, we will discuss why CPM becomes high in campaings running in DV360 account and share practical strategies to bring it down without compromising performance.

What Is CPM and Why Does It Matter?

CPM stands for Cost Per Mille, which means the cost for every thousand ad impressions. In simple terms, if your CPM is $5, you are paying five dollars for every thousand times your ad is shown.

CPM matters because it determines how much reach you can achieve for your budget. For example, if your daily budget is $500 and your CPM is $10, you can buy 50,000 impressions. But if you reduce your CPM to $5, you can buy 100,000 impressions with the same budget. This means more exposure, more chances for clicks, and potentially more conversions.

However, it is important to understand that the cheapest CPM is not always the best. Low CPM does not guarantee quality or conversions. The goal is to reduce CPM without losing quality, which means keeping your ads in front of the right audience in premium placements.

Why Does CPM Get High in DV360?

Before we jump into the solutions, let us understand the reasons behind high CPM in DV360:

• Competitive Inventory: If you are bidding for premium inventory or popular placements, there will be competition from other advertisers, which pushes CPM higher.
• Narrow Targeting: If your targeting is too specific, the available inventory becomes limited, and prices rise.
• High Viewability Requirements: If you apply strict viewability filters, you may only get impressions in premium placements, which can be costly.
• Aggressive Bidding: If your bids are too high, the system spends more to win impressions, resulting in higher CPM.
• Limited Data for Optimization: New campaigns without enough historical data may experience high CPM initially until the system learns and optimizes.

Now that you know the reasons, let us look at the strategies to bring CPM down.

Strategies to Reduce CPM in DV360

Reducing CPM requires a combination of smart bidding, efficient targeting, and inventory optimization. Here are the most effective strategies:

1. Review and Adjust Your Targeting

Targeting is one of the main factors that influence CPM. If your targeting is too restrictive, DV360 will have fewer options to find impressions, which increases the price. To reduce CPM:

• Broaden Your Audience Segments: Instead of only targeting one very specific audience, consider combining related audiences to expand reach. For example, if you are targeting “luxury fashion buyers,” you can also include “high-end lifestyle” audiences.
• Use Open Exchange Inventory with Filters: Private deals and premium inventory are expensive. While they offer quality, they also increase CPM. Use open exchange inventory but apply brand safety and viewability filters to maintain quality.
• Leverage First-Party Data: First-party data is usually cheaper to target because it is based on your own users. Create audience lists from your website visitors or CRM and run campaigns for them.

2. Use Automated Bidding Strategies

Manual bidding often leads to higher CPM because you do not have complete visibility of auction dynamics. DV360’s automated bidding strategies like Maximize Clicks or Target CPM can help reduce CPM because they use machine learning to bid efficiently.

For example, if you set a Target CPM bidding strategy, DV360 will automatically adjust bids to meet your target while optimizing for delivery. This is more effective than guessing bid amounts manually.

3. Optimize Your Inventory Sources

Inventory quality and availability affect CPM. If you are only buying from premium publishers or programmatic guaranteed deals, CPM will be high. To optimize:

• Use a mix of premium and open exchange inventory to balance cost and quality.
• Test DV360’s deals marketplace for high-quality yet affordable deals.
• Exclude expensive placements that are not driving conversions. You can find these in placement reports.

4. Monitor and Control Viewability Settings

High viewability is important for brand awareness, but strict requirements like 90 percent viewability often increase CPM significantly because fewer impressions meet that standard. If you want to reduce CPM:

• Set a balanced viewability threshold, such as 50 percent or 60 percent, instead of very high numbers.
• If you are running performance campaigns, focus more on conversions rather than viewability alone.

5. Adjust Frequency Caps

If your frequency cap is too low, DV360 will constantly look for new users, which may lead to expensive impressions. If your frequency cap is too high, you waste impressions on the same users. Set an optimal frequency cap, such as 3 to 5 impressions per day per user, to keep CPM efficient without overexposure.

6. Use Creative and Format Optimization

Ad formats and creative sizes affect CPM. For example, large-format ads like 970x250 billboards usually cost more. If your campaign can perform well with standard sizes like 300x250 or 728x90, include them in your line items. Also, test multiple creatives because ads with higher click-through rates (CTR) often lead to lower CPM over time, as the system sees them as more engaging.

7. Leverage Dayparting and Geo Adjustments

Serving ads when your audience is most active can improve efficiency. If you are running ads at times when engagement is low, you may end up paying more for impressions that do not convert. Analyze performance data and schedule ads for the best-performing times. Similarly, check which geographies deliver the best results and allocate more budget there while reducing bids for underperforming locations.

8. Exclude Non-Performing Placements

Run placement reports regularly and check which sites or apps have high CPM but low engagement or no conversions. Exclude these placements to avoid wasted spend. This will allow your budget to go towards inventory that gives better value.

9. Test Different Buying Methods

DV360 offers multiple buying methods, including open auction, private deals, and programmatic guaranteed. Open auction usually provides lower CPM, but private deals sometimes offer better value if you negotiate fixed rates. Test different buying types and compare results to find the most cost-effective option.

10. Optimize Based on Performance Data

The best way to reduce CPM over time is to let data guide your decisions. Analyze reports for metrics like viewability, CTR, and conversion rate along with CPM. If a specific audience or creative consistently delivers low CPM and high engagement, allocate more budget to it. If a certain placement or targeting combination drives high CPM without results, reduce or remove it.

Example: Reducing CPM for an E-commerce Brand

Let us take an example of an e-commerce company that sells home decor products. They were running DV360 campaigns for brand awareness with a CPM of $8. Their goal was to reduce CPM to $5 without losing impression quality.

Here is what they did:

• Broadened their targeting by including similar audiences instead of just one narrow segment.
• Switched from only premium inventory to a mix of open exchange and curated deals.
• Implemented a Target CPM automated bidding strategy.
• Reduced their viewability threshold from 90 percent to 60 percent.
• Excluded placements that had high CPM and low engagement after analyzing reports.

After making these changes, their CPM dropped from $8 to $4.80 in three weeks, and their total impressions increased by 60 percent without sacrificing quality.

Reducing CPM in DV360 is not about chasing the lowest possible cost but about finding the right balance between cost and quality. The strategies we discussed—such as optimizing targeting, using automated bidding, adjusting viewability, and making data-driven decisions—can help you achieve lower CPM while maintaining effective campaign performance.

Always remember that every campaign is different, so keep testing, learning, and optimizing. Start small with these adjustments, monitor the impact, and scale the best-performing strategies. Over time, you will not only reduce CPM but also improve the overall efficiency of your DV360 campaigns.