Going once, going twi…too late! Smoked by Real-time bidding.

Stopwatch and Money

In less than 100 milliseconds, Real-time bidding (RTB) initiates and completes the process to deliver a single online ad exposure via programmatic auction to the viewer.

100 milliseconds. How fast is that? In 134 milliseconds, light can travel around the Earth’s equator, and it takes 200 milliseconds for the human brain to recognize emotion in facial expressions.[i]

We explained the role of data-driven user profiles in “Stop guesstimating and get with the program” as the key to precise audience targeting in large scalable quantities for programmatic display campaigns.

Now consider that Real-time bidding is a per impression auction for those campaigns.

When someone visits a Web site – while the page is being loaded into the user’s browser window – the site publisher sends a bid request for each of the display ad slots available to one or more ad exchanges. The ad exchange submits the details for each slot to multiple advertisers who submit their bids in real time. The winners’ ads are then displayed in the banner and other slots when the page is loaded…all in less than 100 milliseconds.

RTB and User Profile data-driven targeting work in tandem to deliver ever-increasing ROI for the campaign budget over the duration of the campaign.

The criteria that created the high-value User Profile target audience can dictate whether to bid and the value of the bid. As viewers click on ads, user and campaign data are updated, and that information, in turn, improves the performance of the next ad to be bid and served.

Since multiple RTB exchanges (and there are dozens) serve bid opportunities simultaneously, data management platforms have emerged that centralize these bid calls. At the same time, the growth of centralized User Profiles of first hand, online history for millions of anonymous users – you and me – means the best campaigns can find us and show us the ads that match us ever-more precisely.

This is where size matters to our campaign outcomes. The more first hand data in the Profiles and the more RTB exchanges available in those 100 milliseconds, the better our ROI.

Access to this size is not the exclusive province of the largest advertisers and their agencies. Any business that has significant expenditures in print, broadcast, or digital should be re-balancing their mix of channels to test and include this combination of User Profiles and Real-time bidding. The more data in the profiles and the more simultaneous auctions you’re in, the better you’ll do.

Otherwise, your business could end up, “Going once! Going twice! Gone!”

[i] http://en.wikipedia.org/wiki/Millisecond

 

Stop guesstimating and get with the program.

Stop guesstimating with programmatic advertising

We contrasted the differences between data rich User Profiles for ad targeting and the shallower profiles used by search engines and social networks in our recent post “Getting personal” .

For targeted campaign success, data rich User Profiles can win out in a big way.

Here’s a real-world example where the same advertiser tried both – a Google-based strategy by a search engine agency and a User Profile strategy that we provided.

By every measure, the MarketServ™ strategy out-performed the Google strategy.

Google Campaign by Others
Name Spend Clicks Cost/Click Impressions
Display $6,625.77 2,748 $2.41 614,090
Search $5,908.56 2,461 $2.40 82,306
TOTAL $12,534.33 5,209 $2.41 696,396
MarketServ Campaign by Iris
Name Spend Clicks Cost/Click Impressions
Audience Targeting $7,500.00 6,456 $1.16 2,425,040
Content Targeting $9,700.00 10,992 $0.88 4,741,133
Site/Search Retargeting $2,799.00 16,962 $0.17 1,082,862
TOTAL $19,999.00 34,410 $0.58 8,249,035

The reasons shed light on the rapid growth of Programmatic Advertising, which applies data analytics and information technology to advertising tactics and operations.

Programmatic Advertising has arrived in full force because it works. Computers replace guesswork in ad spending to deliver higher ROI.

Big sets of data and machine-driven analytics develop User Profiles for better targeting precision from campaign planning through execution. And information technology similar to the stock market optimizes the “next ad served” at the most efficient price throughout the campaign rather than human guesswork to make “wait & see” adjustments in the Google campaign.

Audience and Content Targeting:

The MarketServ™ campaign served ads to an Audience developed from proprietary User Profiles of recorded behaviors that match those of the client’s customers. Detailed online histories identified their lifestyles, shopping habits, browsing and search habits, and the web sites they visited regularly and on what type of device.

Google served ads to those who searched and discovered the client’s site regardless of any match to characteristics of its customers or objectives of the campaign.

Site/Search Retargeting/Remarketing:

Because the MarketServ™ audience was so highly qualified in the first place, retargeting to its audience resulted in a very high click through rate and correspondingly low Cost Per Click compared to Google.

Information Technology and Management:

The software that managed the MarketServ™ campaign is used by the biggest brands for their campaigns. Its algorithms continuously optimized the campaign to serve the next ad based on predictive analytics of preceding responses in the campaign.

Experienced ad traffic managers directly at the data management platform interpret statistical results and manage adjustments.

Google campaigns require intensive management time by the advertiser (or at least a surrogate). Its software does not have optimization capabilities. The human interface has to “best guesstimate” everything from keyword refinements to what bid price will win to expose the ad.

Will every advertiser get the same results? Of course not.

But rather than replace the human element, Programmatic Advertising helps advertisers make educated decisions to best achieve marketing and campaign objectives to drive traffic to your web site whatever your goals – such as generate leads for your funnel, build sales, or create awareness to support other advertising channels.

To maintain competitive edge, businesses need to get on board to the transformational opportunities of Programmatic Advertising.

Return on Investment (ROI) for the digital marketing manager

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Marketing and advertising managers need to understand that their business owners and financial colleagues are – first and foremost – risk-averse. So while they give you budget to grow their business, they really see you as the ones taking their capital and putting it at the greatest risk of loss.

Lose too much, too often, and you’ll lose your job.

On the other hand, like a successful financial advisor, if your track record is growth over the long-term, then you gain their trust and more funds to invest.  As long as you provide overall financial growth as their Return on Investment, those that control your purse strings will understand that sometimes campaigns don’t work and loose money, and some just return enough Contribution Margin to break-even and preserve capital.

So for digital marketers in Small and Medium Businesses’ (those with sales less than $50 million), here’s the first dilemma. We know that building brand awareness is important to the process, but we often do not have the budget to measure and report any ROI.

Even other benchmarks like number of followers, page visits, click through rates, cost per acquisition, and cost per thousand are just market indicators. They’re useful to us, but don’t trump Bottom Line Metrics when evaluating our track record. We need to produce more customers, sales revenue, and net profit.

Take heart. Some of the fundamental advantages of digital advertising also provide solutions.

Long-term commitments to Digital Display and SEO provide tools to manage those investments better than in print or broadcast.

1. Digital Display and SEO are a continuous flow of campaign dollars (not a series of single jolts like sending the mail or publishing the ad). Like Wall Street analysts, we can continuously monitor our invested dollars; e.g., opens and completed actions (such as online orders or forms submitted), and adjust our next spends accordingly.

2. A real-world case study by Harvard Business School Professor Sunil Guptai (1) – a leading researcher of how digital technology is changing consumer behavior, transforming businesses and influencing society – had important conclusions bearing on ROI.

Gupta and his group studied a commercial bank’s efforts to gain new checking account customers through combined campaigns of Display and SEO. They broke down results and attributed revenues and costs to both campaigns.

They concluded:

  • Display supports Search: a sustained increase in display impressions drives a significant increase in search visitation and search clicks.
  • When the long-run dynamics of Display and Search campaigns were reviewed, the ROI were better – about 10% and 38% higher respectively.

All of that’s well and good for big banks with money to spend on attribution research, but how can we apply this knowledge to our tasks at SMB’s?

Part of it’s perception – manage how you are viewed by others.

1. Recognize your role as an investment manager of your company’s working capital for business development.

2. All members of your advertising and marketing team are facing increasing pressure to produce results. So develop a culture with them that thrives on creativity, but understands that the company has entrusted all of you with its working capital.

3. Reach out to your business owners and financial colleagues, and convey that perspective to them. Let them know that you are working to increase Contribution Margin for the company as a result of your campaigns. (What others do with the money after that is outside your control, but you’re a team player).

And part of it’s reality – manage how you use the funds entrusted to you.

1. Remember that Display has significant impact on your Search results. So allocate enough funds to Display to have an impact.

2. Make sure you’re excluding the search engines’ display networks from these display buys so you actually serve ads to audiences based on behaviors, not search histories.

Not only will this properly leverage the investment for better results for Search, it satisfies the dilemma to grow brand awareness to a wide audience.

3. Ask for reports from your financial colleagues that compare year-over-year results (last year compared to this year). Monthly and quarterly comparisons will help you gauge how your investments are doing.

The results of your organization – including yours – are measured in dollars. That’s where Return on Investment will help you develop your brand as not just the marketing genius you are, but as the trusted financial advisor who leverages the company’s working capital.

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(1) “Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising”, Working Paper 13-070, Sunil Gupta, Pavel Kireyev, Koen Pauwels, February 9, 2013, http://www.hbs.edu/faculty/Publication%20Files/13-070.pdf.