Ads
eCPC = CPM / (1000 x CTR)That identity is the whole argument. Under cost-per-click billing, click-through rate does not appear in your cost per click at all — you pay what the auction cleared, and a better creative buys the same clicks from fewer impressions. Under cost-per-impression billing, click-through rate sits in the denominator of the price you pay. The same creative improvement that was worth nothing becomes worth a proportional cut in the cost of every click you buy [1].
To be explicit before anything else: no Southeast Asian marketplace has announced a move from click billing to impression billing, and this post does not claim one is coming. It is contingency analysis — the algebra of what would change, worked out in advance, because the input it promotes is the one sellers here are least prepared to have priced. In our fleet data across 84 Shopee shops and 9.11 million clicks between 1 February and 16 August 2026, click-through rate is the flattest of six inputs we measure: 1.14x between the best and worst daypart, against 2.24x for CPM and 2.01x for CPC. Sellers vary their prices, their baskets and their conversion rates far more than they vary their creative [4].
The thesis: under click billing, click-through rate is a delivery lever — it changes how much you can spend, not what a click costs you. Under impression billing it becomes a price lever, and profit responds to it more than proportionally. What would falsify this: a marketplace moving to impression billing without sellers’ realised cost per click moving inversely with their click-through rate.
What a Target ROAS actually instructs
A Target ROAS is not a promise about the return you will earn. It is a price ceiling on what the platform’s bidder may pay for traffic on your behalf [6]. Write CR for the probability a click converts, V for the attributed order value when it does, and R* for the target you entered. Expected attributed revenue per click is CR x V, and the target says that revenue must be at least R* times what you paid for the click. Rearranged, that is a bound on the bid.
CPC_max = CR x V / R*
Example: CR = 4%, V = THB 900, R* = 6
CPC_max = 0.04 x 900 / 6 = THB 6.00Two things follow that are routinely read backwards. First, the target enters the denominator, so it is an inverse control: raise it and the permitted bid falls. Raising a Target ROAS does not raise the return your campaign earns — it lowers the price it is allowed to pay, and the return is whatever the auction delivers at that price. Second, on Shopee GMV Max you never see this number. Per Shopee’s own seller documentation the campaign is auto-bid; you set a budget and a target, and the platform sets the per-click bid [2]. The ceiling describes what constrains the platform’s bidder, not a field you fill in.
A Target ROAS is a price ceiling, not a profit promise. Raise it and you lower the bid, not the return.
The same ceiling, priced per thousand impressions
An impression becomes a click with probability CTR, and under click billing you pay only when the click happens. So the expected cost an impression may carry is the click ceiling discounted by the click rate — which means the auction is already valuing your impression at CTR x CR x V, whether or not your invoice mentions CTR.
CPM_max = 1000 x CTR x CPC_max
Example: CTR = 2.6%, CPC_max = THB 6.00
CPM_max = 1000 x 0.026 x 6.00 = THB 156This is why a settlement change is a smaller event than it first appears, and why it is not a redesign of the auction. The quantity being priced is identical under both bases. What changes is the moment money moves: click billing charges on the click, impression billing charges on the impression. Everything below follows from that one change, and nothing else.
Why a better creative is worth nothing under CPC
Take two sellers, X and Y, identical in every respect — same conversion rate, same basket, same Target ROAS, same daily budget, same clearing price. X improves its creative and lifts click-through by a fraction g. Y leaves its creative alone. Under click billing, at a fixed budget S and a clearing price CPC, the number of clicks you buy is simply S divided by CPC, and click-through rate is nowhere in that expression.
Clicks C = S / CPC <- no CTR
Cost/click eCPC = CPC <- no CTR
Revenue G = (S / CPC) x CR x V <- no CTR
Impressions I = S / (CPC x CTR) <- CTR only here
So: eCPC_X = eCPC_Y, G_X = G_Y, profit_X = profit_YX’s better creative bought the same clicks from fewer impressions. That is not worthless — it means X wins more auctions at a given bid and can therefore spend more, because both auctions rank on expected revenue per impression. But at a fixed budget, the gain is exactly zero. The price of a click did not move, and neither did the return per baht.
Under impression billing the same comparison inverts. Now the budget buys impressions directly and clicks are what the click rate makes of them, so every quantity that was immune to CTR becomes proportional to it.
Change in cost per click = -g / (1 + g)
Clicks, revenue, ROAS = x (1 + g)
Example: g = 25% better click-through
eCPC falls 25 / 125 = 20%
clicks, attributed revenue and ROAS all rise 25%| Click-through gain | Cost per click (CPM) | ROAS (CPM) | Cost per click (CPC) | ROAS (CPC) |
|---|---|---|---|---|
| +10% | -9.1% | x1.10 | unchanged | x1.00 |
| +25% | -20.0% | x1.25 | unchanged | x1.00 |
| +50% | -33.3% | x1.50 | unchanged | x1.00 |
| +100% | -50.0% | x2.00 | unchanged | x1.00 |
Measured against a seller who holds its creative fixed and faces the same clearing price. The CPM columns are -g/(1+g) and 1+g; the CPC columns are the algebra above. Same auction, same seller, same budget — only the billing basis differs.
The reduction is g/(1+g), so it is concave: the first improvements are worth the most per point of CTR. Under click billing every bar here is zero.
The profit effect is larger than the ROAS effect
The table above understates the case, because profit is a difference and not a ratio. A creative gain adds g times your gross contribution — not g times your profit. When ad spend is large relative to what is left over, those two are very different numbers.
Monthly ad spend S = THB 10,000
Contribution the ads earn muG = THB 12,000
Profit after ads pi = 12,000 - 10,000 = THB 2,000
A 25% click-through gain under CPM:
contribution 12,000 -> 15,000
profit 2,000 -> 5,000 (+150%)
Because the gain is g x (pi + S) = 0.25 x 12,000 = THB 3,000A 25 per cent improvement in click-through produced a 150 per cent improvement in profit. That multiple is not a coincidence — it is the elasticity of profit to click-through, and it equals gross contribution divided by profit [1]. The closer a campaign runs to break-even, the larger it gets, without bound. A campaign at THB 11,500 of contribution on THB 10,000 of spend has an elasticity of 7.7; one at THB 10,500 has an elasticity of 21.
The nearer a campaign runs to break-even, the more a creative improvement is worth — and under click billing, it is worth nothing at all.
The competitive consequence is sharper still. Under click billing, X’s bid ceiling does not move at all when its creative improves — the ceiling formula has no CTR in it. Under impression billing the permitted bid itself rises by (1+g) at the same target, so X can outbid Y on every impression while still satisfying the identical Target ROAS, and pay less per click for the impressions it wins. The billing change does not just reprice the winner; it hands the winner a higher ceiling.
Where this argument breaks
Four limits, in the order they would bite.
- The comparison holds one seller against another at a given clearing price. It is not a market equilibrium. If every seller improves click-through at once, the clearing CPM rises and the advantage competes away — what survives is the relative position, not the absolute cut in cost per click.
- Impression billing usually arrives with view-through crediting: conversions credited to an impression that produced no click. That makes the unclicked impression both billable and creditable at the same time. Whether the credit compensates for the charge depends on the view-through conversion rate and value, which nobody outside the platform can observe in advance.
- Every figure here is on attributed revenue, which is not the revenue advertising caused. The gap between the two is organic sales the attribution rule absorbed, and at a fixed target that gap converts directly into permitted spend. A wider attribution window is spend headroom, not performance.
- The rates are per traffic opportunity, not campaign averages. Substituting a campaign-average click-through rate into these expressions is an approximation whose error grows with how much the underlying rates vary — and broad attribution makes the value term vary a lot.
And the standing caveat: this is derived from definitions, not measured against a live CPM marketplace, because there is not one to measure here. The lemmas are exact given their assumptions. The magnitudes are not claims.
Methodology
The one empirical claim in this post is the input-spread figure. It comes from DataGlass fleet data: 84 Shopee shops, 1 February to 16 August 2026, single-product campaigns only so that a campaign’s clicks can be attributed to one product’s economics, on broad attribution. 9.11 million of 9.21 million clicks matched (98.9 per cent). "Spread" is the ratio of the best to the worst of six dayparts on that input: click-through 1.14x, margin 1.13x, conversion rate 1.23x, basket value 1.42x, CPC 2.01x, CPM 2.24x. These are aggregates across our own connected accounts, not a population claim about Southeast Asian sellers, and no individual shop is identified. The five lemmas use no data at all — they follow from the definitions stated in the PDF.