CPC reconciliation

[dennisgorelik]

Main source of revenue for PostJobFree now is advertising jobs from other job boards on CPC (cost-per-click) basis.

It works like this:
1) Advertiser (job board) gives us a link to their XML job feed.

2) Every job element in that XML job feed has associated CPC bid (or we use default CPC bid for the whole job feed).
Typical CPC bid is around $0.20/click, but it usually varies between $0.08/click and $0.50/click.

3) After some cleaning, PostJobFree saves all job feeds into a unified list of jobs (database table + ElasticSearch index).

4) When job seekers are searching for jobs, we prioritize jobs according to:
- How well this job posting matches with what job seeker is searching for.
- Advertiser jobs quality, that we measure as "clicks/unsubscribe" ratio -- based on clicks history for that specific advertiser (the higher clicks/unsubscribe ratio - the better).
- CPC that advertiser pays for jobs (the higher CPC bid is - the higher this job will be listed in search results).

5) After the end of month - PostJobFree generates invoices and emails them to the advertisers.

6) Advertisers pay on "Net 30" basis. That means "pay within 30 days from invoice period").

Usually, this CPC advertising business in uneventful, but sometimes a bit unusual email exchanges happen.

In the email exchange below an advertiser (a buyer that represents job board "Mumu") and I resolve a discrepancy between "PostJobFree outgoing clicks" number and "Mumu incoming clicks" number.
(I changed names and simplified/trimmed this conversation a little bit).

Advertiser

Hi Dennis,
We see some discrepancies for May in our numbers
PostJobFree invoice: $269
Mumu internal counting: $223
We are asking for an invoice reduction of $32

Dennis

1) You are welcome to pay that corrected invoice amount ($237).

2) Going forward could you please adjust (reduce) your bids in order to accommodate the discrepancies.
We may assume that discrepancies next month would be similar to discrepancies in May.
So, your bid should, probably, be about 12% less.

3) Do you measure your CPA conversions from PostJobFree traffic?
Does it perform better or worse than you expected?

Advertiser

1) Great. Have the invoices been re-sent?
2) I will ask for the bid mins to be reduced, no problem and thanks for the suggestion.
3) No, we measure conversions based on intention to apply, you perform very well!

Dennis

1) We did not resend invoices.
Our invoicing system currently does not support sending corrected invoices.
If it is important for you - we may send you manual corrected invoice, but this is labor-intensive.

2) Please note that if you reduce your CPC bid then PostJobFree would send you less candidates going forward.
That may or may not be the right course of action, depending on how satisfied you are with current results (e.g. "cost per application").
If you are satisfied with the results - bid the same.
If results are better than your target CPA - bid more.
If CPA is below your target CPA for that campaign - going forward bid less.

Does it make sense?

Advertiser

Thanks for the additional info.

We'll leave the bids the same, especially since it seems to be easy enough to share the discrepancy and bill off our numbers.

I'll ask our AP team if it's ok on our side to pay (our numbers) without you needing to re-issue an invoice.

Dennis

1) While one-time invoice correction is OK, it is not OK to correct our invoices on a regular basis.

If you want to have long-running adjustment - please lower your bid (and, correspondingly, have lower traffic from us).
We are running an auction [advertisers bid for job seekers' attention] and it is not ok to bid more than what you are going to actually pay (not in a long term anyway).

2) I appreciate traffic analysis on your end. It brings an interesting feedback.
In response to your feedback we may, eventually, tweak our system a little bit (e.g. discourage out-of-country candidates even more than we do now).
But there are only 2 immediate actions we can take right now:
- Allow you to pay discounted invoice (once).
- Bid less if you think that our job seekers' traffic does not worth what we charge for it.

Does it make sense?

Advertiser

Since we haven't had these discrepancies in past months, I would like to see what we see next month.

Both of the options you present penalize Mumu... either we pay for traffic that we wouldn't charge our own clients for, or we bid lower and see less traffic... neither of those are great solutions to me. I'd much prefer something that suits both you and us - we generally allow a 10% margin of error, for example, and only reach out for reconciliation when a discrepancy goes outside this range.

Dennis

1) We do not single out Mumu.
We are sending traffic that we have to all advertisers (at the prices that advertisers bid).

2) If occasionally you see lower quality traffic from us, then the best course of action - is to bid a little bit less.
For example, if once per 4 months you see 20% decrease in quality of PostJobFree traffic, you may want to bid 5% less than you would otherwise bid. In the course of ~4 months that would compensate for occasional decrease in traffic quality.

3) It is still nice to receive your analysis of our traffic quality, especially if it is something that you did not see before.

4) I suggest to increase "margin of error threshold" from 10% up to 20%
Smaller changes are easier to address by adjusting CPC bids.

Reconciliation process is time-consuming and only makes sense when quality changes significantly from regular level.

Advertiser

Thanks Dennis,

I appreciate you taking the time to go through the 'theory' behind your advice - it makes sense.

We'll definitely take it under consideration.

Have a nice afternoon