Archive for Display Advertising

Quantifying The Necessity To Do Display Remarketing Ads

In Google Analytics under Audience > Behavior > Frequency & Recency you can find the count of visits report. Add the Built-In segment Visits with Transactions. This way you can see how many visits it takes for people to purchase. Compare year over year count of visits for purchasers. There is a good chance the amount of visits it takes for people to convert has gone up year over year.

Count Of Visits

A few thoughts on this:

  • As the internet becomes more ingrained in our daily routines we all browse more. A visit to an ecommerce site is no longer a signal of high purchase intent like it used to be.
  • Retargeting is more important. Visitors are taking more time comparing prices and sites. While they’re weighing their options it’s worth it to remind them of your offering with display ads.
  • Do you offer discounts so often that visitors waiting for your products to go on sale?

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Algorithm Fatigue

An algorithm is a set of instructions and multivariate calculations that learn and adapt over time. The premise for using algorithms for digital advertising are enticing because an algorithm can take in bigger data sets than any person could analyze on their own and make smart decisions based on the instructions it is given. An algorithm should meet customers’ goals and create value in the most cost-effective and transparent ways possible.

Unfortunately, the word algorithm is often one of the first talking points that vendors in digital advertising refer to but can say very little about given that most platforms are built on proprietary technology.  This overuse of the word has created ‘algorithm fatigue’ and resulted in loss of meaning. The value proposition for many vendors is, “our algorithm does the heavy lifting and will meet your advertising goals, so sit back and don’t worry about how.”

The problem is that I want to worry about how. I’m glad that the algorithm has figured out how to meet my advertising goals, but were they the right goals- should I have set them higher/lower? What does the algorithm know about my customer, competition or industry that I don’t? How much money is it keeping for itself from arbitrage between me and the publisher?

Vendors and advertisers alike should focus the conversation around algorithms on customization to fit their needs and bottom line revenue results that are transparent.

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Arbitrage In Real Time DSP Display Advertising

Demand Side Platforms (DSPs) enable you to bid for individual ad impressions in real-time auctions across multiple ad exchanges. Instead of buying impressions in bulk from hand picked sites, you can use behavioral targeting data collected from cookies and data exchanges that determine the value of the impression and place a bid accordingly. This allows you to focus on the individuals that meet your advertising criteria rather than focusing on running ads across a site that meets your criteria.

There are opportunities for manipulation and arbitrage from the middle men in these transactions with display inventory. This is due to the large gaps in what advertisers are willing to bid and the fact that there is more inventory than there are advertisers looking for placements.

Take the following scenario for example:
An impression shows up for bid. It has the following attributes:

  1. Female
  2. 24 years old
  3. $60,000 income
  4. Orlando DMA
  5. Has kids
  6. Apparel Shopper
  7. Health club member
  8. Impression is 300×250 pixels
  9. Site category is entertainment

Four advertisers participate in the auction:
Advertiser 1: Pampers bids $1 because they want to sell her diapers as she fits in their new mom demographic.

Advertiser 2: Piperlime bids $10 because they know she has purchased from their site before and was recently at their site looking at clothes and she fits in their typical young female demographic.

Advertiser 3: 24 Hour Fitness bids $5 promoting their time sensitive campaign to promote their new gym in her local Orlando neighborhood.

The agency acting as the middleman handling these bids from the advertisers and deciding which one will get the placement have their own margin constraint and internal auction. There’s no reason that an agency using a DSP couldn’t withhold bids from its stable of advertisers so that only the top bid available for any advertiser for each impression would be placed. They want to take home the biggest markup on the media as possible. So if the publisher asks $4 for the impression then the agency will choose to place the Piperlime ad because they stand to make the most profit – the difference between $4 and $10, even if the 24 Hour Fitness ad is more relevant.

At the end of the day the advertiser may not care because the decisions of the agency are ultimately held to the goals of the advertiser, and if those goals are met who cares how much the agency takes? The problem is they are leaving volume and potentially higher quality placements/users on the table because the placement doesn’t meet the margin constraint that the agency has in place. Ask for this level of transparency from your real time bidding DSP agency and you likely won’t get it because they don’t want you to know how much they are serving their own interests before yours.

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For Online Display Ads: Who Is More Important Than Where

When you see a completely irrelevant ad on TV you have to excuse the advertiser to a degree. They don’t know any better. They don’t know who is watching and whether or not you may be interested in their product. They are trying to reach their target audience with what limited data they have available and you happened to see it too. Mass media will always be extremely wasteful. The same level of forgiveness towards irrelevant ads online should not be excused.

This mindset, carried over from buying print and TV, when buying media online is that the placement of the ad is very important because its “borrowing brand equity” from the placement. With limited information on who is looking at the ad, this is a good way to go – its seems obvious that you wouldn’t put a diaper ad in Sports Illustrated. Publishers make a fortune convincing advertisers that their online placements are worth more than others placements because of this “equity” that they also give the advertiser. I disagree. Placements don’t matter online. What matters is the user.

The internet provides data about the mindset and behavior of the user that is impossible to know with print and TV media buying. If you know that the user is male, has a household income above $100K, recently visited sites about shaving, and did a search on Google for razors, than who cares if your ad for razors is shown to the user on a site selling diapers? It might even be more impactful because the ad is very different than the content on the page.

Stop buying placements, start buying individuals. This is possible online with demand-side platforms that bid in real-time for placement across multiple ad exchanges. Along with algorithmic and dynamic bidding that goes beyond rules-based tools to leverage data in a way that’s unique and evolves with consumers, you can focus on who sees your ads rather than where your ads are seen.

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Exploiting Frequency Capping In Remarketing Ads

In AdWords Campaign Settings is the option to set frequency capping. You can set an impression cap per user per day, week or month, and on the campaign, ad group or ad level. This is particularly useful under display remarketing campaigns because it allows you to limit the amount of impressions a visitor sees in a given time period.
Frequency Capping AdWords
Plus, AdWords allows you to set up a remarketing list, what they call an Audience, to target visitors for up to 540 days. A cool way to set up a campaign is to put the remarketing code that is set for 540 days on the site and then use the frequency capping option together. For example, put a frequency cap of 5 impressions per user per month per campaign. This way the same person will only see the same ad 5 times in a month. Then at the beginning of the next month they get another 5 impressions. If you updated your ad creative on a regular basis you could message that person every month for over a year by giving them one piece of information at a time about the features and benefits of the product you’re selling – instead of hitting them with the same ad over and over for 10 days and then giving up on them.
Couple this with a custom combination made up of other audiences, and once that person purchases, they could then get dumped into the post purchase audience and be messaged to become a repeat customer. I think there is definitely potential for a constant pipeline of educating and converting and re-converting visitors through out the purchase funnel with this strategy.

Remarketing Display Funnel

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Online Display Remarketing Planner

There are quite a few metrics to consider when planning a display remarketing campaign. In the Display Remarketing Planner (download below) I put together all of the relevant metrics that need to be considered when setting up and planning a successful remarketing campaign. The bold boxes in the top row are the ones you need to adjust to fit your site including budget, click-through-rate, conversion rate, view-through conversion rate, average order value and the amount of attribution you will give to view-through conversions.

It’s hard to say what click through rate, conversion rate and view-through conversion rate will be for your site if you’ve never ran display before.

A lot also depends on how you have the tagging set up on your site. If you’re only serving ads to shopping cart abandoners, chances are your conversion rate will be higher since those people have already shown they are very interested in buying, on the other hand your view-through attribution should be lower since it’s likely that people who have added items to their cart were planning on buying anyway, regardless of seeing any display ads. That view-through attribution % is a pretty subjective metric unless you’ve got some kind of test and control methodology to really measure incrementality.

Another thing to consider is the creative you are using in the display ads themselves – if it’s heavy in promotion, like “get 25% off,” expect higher click through and conversion rates.

Download Online Display Remarketing Planner (.xlsx)

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