Optimizing Your Digital Marketing Campaigns

Arjun Dev Arora

Idea to IPO

Optimizing Your Digital Marketing

Campaigns

October 2014

Follow me!

@arjundarora

#RTChat

Arjun Dev Arora, Chairman and Founder of ReTargeter

Arjun was the founding CEO of ReTargeter and bootstrapped

the company to be in the top 100 of Inc's Fastest Growing

Companies list. He is a recognized expert in display

advertising and retargeting. Arjun also advises various

advertising and technology start-up companies.

1 Core Metrics

CPM, CPC, and CPA

3 Intelligent Spending

4 Execution & Optimization

Table of Contents

Impressions, Clicks, Conversions, RoAS

5 Summary & Conclusion

2 Core Dimensions

Inventory, Creatives, Time, Landing Page

Core Metrics

1

Impressions

Core Metrics

• Whenever your creative is displayed, it’s considered an impression.

Why they matter

Impressions are the point of contact and between you and your

audience.

Campaign optimizations focus on serving impressions at the right

time, to the right people, and in the right place.

What they tell youThe way viewers respond to impressions gives you insights into

your audience and brand.

What they don’t tell you

You can apply some learnings across campaigns, every

campaign is different and requires its own set of tests and

optimizations.

How they can change

Impressions vary dramatically depending on your campaign and

spending goals.

Do you care what websites display your ads? Or are you interested in

displaying as many impressions as possible, regardless of location?

Clicks

Core Metrics

• A click occurs when a user clicks your advertisement

Why they matter

If an impression is the point of contact between you and a

viewer, a click is the viewer engaging in the conversation.

Although clicks are a common way to measure campaign

performance, it should not be the main driver of your campaign

What they tell you

Clicks can tell you how effective your creatives are.

You can also gather intelligence about how much demand there is

for your offering.

What they don’t tell you

Bot traffic skews click data.

You can identify bot traffic and segment this group to be excluded

from your campaign.

How they can change

Clicks are desirable because they imply inbound traffic.

Sometimes however, all that matters is that somebody saw the ad.

A campaign urging people to “tune in” to a sitcom is pushing for

awareness. The number of people who click through isn’t as

important as whether or not they watch the show.

Conversions

Core Metrics

• Conversions occur when a user performs a desired action and differ depending on the individual

campaign goals.

Why they matterConversions are often the end goal of display campaigns and are

affected by numerous factors.

What they tell you

Low conversion rates can have several causes:

- poorly designed creatives,

- wrong audience,

- not serving enough impressions,

- poor landing page UX.

What they don’t tell youIf you aren’t satisfied by your conversion rate, it could be an issue

with your display advertising, but it could also be an issue with

your pricing, website, messaging, etc.

How they can change

Conversions will vary depending on your business and campaign

goals.

Conversions can be as small as a social share, or as big as purchasing

a vacation package. The most common conversion types are a

purchase, a share, and data submission (e.g.

subscriptions/registrations)

Click Through Conversions

Core Metrics

• Attribution: Click through conversions are easier to attribute than view through conversions. You

know what creative a person saw, when they saw it, and you know that they engaged with it before

actually converting.

• Measurement: Click through conversions are measured by click through to conversion rate

conversions/clicks.

• What does it mean? A low click through conversion rate could mean that your creative isn’t

displaying to the right audience. It could also suggest that your landing page needs work to move

visitors to convert.

View Through Conversions

Core Metrics

• Attribution: Attribution is hazier for VTCs but it’s still an extremely valuable metric. Although viewers

don’t click on the creative, studies have shown that display campaigns result in an 80% increase in

branded search, meaning people see the creative and use a search engine to find the business

later.

• View through window: View through windows help define VTC attribution. For example, a 14 day

view through window will attribute conversions to a creative if it was viewed within 14 days of the

conversion.

• Intelligence: The VTC rate is an important measurement of the value and effectiveness of your

campaign. A low VTC rate could indicate that you’re serving the wrong audience. Is this audience

behaving differently than other audience segments that you are not targeting/retargeting? You might

even set up a test to find out!

Core Metrics

Ad Spend

Ad spend is simply the amount you paid for advertising.

• Spend = Impressions/1000 x CPM

Revenue

In this case, revenue refers to any income that results from your campaign.

You can usually use a revenue pixel to track your revenue and tie it to a

specific campaign.

Return on Ad Spend RoAS

If you know your ad spend and your revenue, you can calculate your RoAS

(Return on Ad Spend).

• RoAS = (Revenue – Spend) / Spend

You should define what RoAS works for your goals and use this metric to

compare your overall advertising efforts.

Ad Spend, Revenue, and RoAS

Core Dimensions

2

Inventory Source

Core Dimensions

• Inventory source refers to the particular ad network that provided the inventory space. Understanding

how your campaign performs against different inventory sources will help you optimize.

Creatives

Core Dimensions

• Creatives are the actual ads you display. Continuously test and optimize your creatives.

Creatives

Core Dimensions

• These are the most common inventory sizes

Time of Day

Core Dimensions

• Your audience may be more active online at certain times of the day. Tailor your campaign to fit your

audience.

Landing Pages

Core Dimensions

A well-designed and relevant ad, will probably drive a lot of clicks. But what happens after the visitor

clicks your ad? Your ads and landing pages should align so the user has a smooth path to conversion.

• The role of the landing page

o The landing page links your creative and your offering

o The landing page should move users through your funnel

• Optimize forever

o Keep an eye on: bounce rate, conversion rate, and quality score (a propriety measure built by

Google that indicates how relevant your ads, keywords, and landing page are to a person seeing

the ad).

Landing Pages

Core Dimensions

• Elements of a good landing page

o Design and messaging of your

landing page should be

consistent with your creative

o Should reiterate what was in

the ad and specify what the

visitor can expect

o Clearly communicate the

conversion action

Intelligent Spending

3

Inventory Buying Methods

There are three main ways to buy ad inventory in display advertising. The standard buying method

is CPM, but depending on your campaign goals, it may be more appropriate to pay on a CPC or

CPA basis:


CPM

Cost-per-mille

CPC

Cost-per-click

CPA

Cost-per-acquisition

Cost-per-milleCPM

CPM

Cost-per-mille


How it Works Advertisers pay per 1,000 impressions.

Cost Range

Programmatic: $0.50-$3.00

Programmatic Premium: $5-$15

Premium Direct: $10-$100+

Who it benefits

• Industry standard for purchasing display media.

• Appropriate for most display campaigns.

• Works to the advantage of advertisers and adtech

companies.

Campaign Goals

Works for just about all campaign goals (brand

awareness, click through, reach, conversions)

because it allows room for optimization toward any goals.

Cost-per-clickCPC

CPC

Cost-per-click


How it WorksAdvertiser pays for every click, regardless of the number

of impressions displayed

Cost RangeProgrammatic: $0.50-$5.00

Premium publishers don’t typically allow CPC

Who it benefits

• Best for advertisers that care less about brand

awareness and more about site traffic

• Doesn’t always work for adtech companies looking to

protect their downside risk

Campaign Goals Advertisers focused on generating site traffic

Cost-per-acquisitionCPA

CPA

Cost-per-acquisition


How it WorksAdvertisers pay by conversion, regardless of number of

impressions and clicks.

Cost Range

Highly variable depending on the campaign. For example,

pricing will differ if the acquisition is the sale of $10,000

software product versus a $3 pair of sunglasses.

Who it benefits

• Good for advertisers trying to drive conversions

regardless of traffic source.

• Can be VERY difficult for adtech companies as they

take all the inventory risk.

Campaign goalsCompany needs to drive conversions within a fixed cost per

conversion.

Buying methods

vs.

Campaign Goals


Measure

CPC/CPA

CPA

Cost-per-

acquisition

Set up and optimize toward CPC and CPA goals even though you pay on a CPM basis

• Paying by CPM gives advertisers and clients the opportunity to see campaign conversion performance

• Reach the largest possible audience

So why not pay on a CPA/CPC basis?

• For CPA, view-through and click-through attribution must be defined before campaign launches

• CPA and CPC pricing can result in less flexibility for your campaign manager to test

• CPA/CPC pricing structures don’t always work well with adtech companies since they might not have great

control over campaign assets and performance (creative, landing pages, pricing, etc.), but take on the risk

of the actual media cost.

Pay by CPM While Optimizing Toward CPA/CPC Goals

Execution & Optimization

4


• Part of understanding your audience involves knowing when they browse the web. If you know this,

you can tailor your campaign to display ads when they are online. For example, B2B sellers may find

that they are most successful during business hours while an entertainment company may do better

showing impressions in the evening.

Time of Day

Is your audience really looking at 3AM on a Sunday?


• Different ads appeal to different kinds of audiences

• Your audience will get bored of even the best ads, it’s imperative to constantly rotate creatives

• How do you know what creatives work best? A/B test and iterate!

• Decide what element you want to test, then make an alteration to your existing creatives. For

example, try changing the color of a CTA or the wording of a tagline. Then compare the

performance of the creatives. Make sure you don’t alter too much in the test version, that way

you know exactly what drove a change in the creative’s performance.

Creative

Test, test, test


• Segmentation is a way to decide who is being targeted based on where they are engaging with your

website. Segments can be as complicated as SKU based or as simple as choosing between two

sections of the site.

Segmentation

Organizing your audience

Two different products Two different ad experiences


• Display advertising is great for reconnecting with site visitors, but extra care should be taken not to

overexpose yourself. Setting a frequency cap will limit the number of times tagged users see your

ads and will prevent potential customers from feeling bored, overwhelmed, or stalked. We

recommend showing 17-20 ads per user per month.

Frequency Caps

How to use them properly and with different segments


• Don’t waste your ad spend showing advertisements to an unqualified audience. If you’re selling an

app that is only compatible with iPhone, don’t advertise to Windows phone users.

• A more advanced optimization would be to target based off conversions driven by browser type. For

example, if Chrome users tend to convert more, you may place more of your budget advertising to

Chrome users.

Browser/Device

Only show ads to certain types of devices or browsers

Image Link

http://germinateapps.com/wp-content/uploads/2012/04/laptop-tablet-phone-600.jpg


• Some inventory sources focus on specific site types like sports, gaming, entertainment, news, etc.

Depending on your audience, it may make sense to concentrate your ad spend on some inventory

sources while avoiding others. Similarly, you should remove underperforming inventory sources and

optimize for top performing sources.

Inventory Sources

Remove the wrong inventory sources, and get more from the right inventory sources


• First party data is any information you collect about your audience. In the context of display

advertising, first party data is cookie-based data, and it’s the most valuable data you can collect

about your audience.

• Because first party data specifies your users, it’s the key component to site retargeting, facebook

retargeting, and CRM retargeting.

• You will probably find yourself in a position where you want to reach an audience that you don’t have

information about. This is where second party and third party data can come in handy.

First Party Data

What is your audience telling you?


• Second party data is essentially somebody else’s first party data. Second party data isn’t usually

commoditized, but you can work out an arrangement with trusted partners to share customer data.

For example, a high-end watch company might partner with a yacht blog to find new customers. The

possibilities are endless, but the key is to form and maintain good partnerships.

Second Party Data

Can you get proprietary access to transparent data?


• Companies such as BlueKai, Peer39, and eXelate sell third-party data. These companies are also

known as DMPs or Data Aggregators and they are the behemoths of the data world. Their data is

typically purchased on a large scale from publishers. The benefit of third party data is the sheer

volume of user data you can access, but this data is also widely accessible to competitors so you

aren’t necessarily gaining unique audience intelligence.

• Third party data is great for demographic, behavioral, and contextual targeting, but can also be used

to remove bot traffic

• Third party data providers charge a fee to use their segments, usually on a CPM basis. Depending

on the the data, the CPM can be anywhere from $0.50 to $5.00

Third Party Data

What’s out there, and what’s right for your business


Bidding Styles

Bid to win all vs. bid to win most

Bid to Win All Bid to Win Most

Win as many impressions as quickly as possibleManage your costs so inventory is cheaper,

willing to lose some bids

Appropriate for hard-to-win audiences

Ex: High-level Executives

Appropriate for easy-to-find audiences

Ex: College Students

Exhausts budget rapidly Preserves budget longer


The world of display advertising is fast-moving and ever changing so it’s imperative to keep

up, or else you might be left behind. Keeping up can mean building new technologies in-

house, but it can also mean finding novel ways to combine existing technologies.

First Mover Advantage

Using and building new solutions

In-House

If you want something done right, sometimes you’ve got to do it yourself. Unsurprisingly

this takes a lot of time and effort, but it can pay off if it makes you stand out in the

marketplace.

Example: Trulia dynamic creatives

Partner Up

Innovation doesn’t have to mean building a new solution from the ground up. Existing

technologies can be combined in novel ways to create brand new solutions. The key is

to identify these technologies, and forge a strong partnership with the technology’s

providers.

This form of innovation is faster and requires less effort. However, it can leave you at

the mercy of another organization that you have little control over, so make sure to

choose your partners wisely.

CRM ReTargeting – This is a product that ReTargeter offers, and is built using technology from LiveRamp.

CRM ReTargeting lets you show advertisements to an audience defined by your CRM data.

Conversation ReTargeting– ReTargeter has also taken on the role of technology provider to power other

company’s products. PrimeLoop recently announced Conversation ReTargeting, a tool that allows advertisers

to tag users who click on links that don’t lead to their website. PrimeLoop uses ReTargeter technology and

combines it with their own link-shortening technology to offer a new solution to its clients.


First Mover Advantage Partners sharing technology to provide new solutions to customers

Real Optimization

Tests and Results

Optimization: Dayparting (Time of Day)

We set a group of campaigns to only display ads from 7am-10pm and compared the results to letting the

campaign display ads throughout the day.


Impressions 34%A decrease in impressions expected, as

you’re displaying impressions for a smaller

window of time

Clicks/CTR 5% 59%Clicks and CTR rate both increased,

potentially because the campaigns didn’t

engage night owls.

Conversions/Click 38%Conversions per click decreased, suggesting

that dayparting generated greater interest but

the audience may not have been ready to

convert

The decrease in conversions is accompanied by an increase in CTR may be caused by

people browsing more during the day while at work, but not actually spending money until

they’re at home at the end of the day.

What’s next: A next step would be to test this hypothesis by focusing more impressions on

times when people are at home, and advertising less during work hours.

Optimization: Bot Traffic

Bots are an unfortunate part of the ad industry but if you identify and remove bot traffic, you will likely see

an improvement in your ad spend. Here’s the result of excluding some segments identified as bot traffic.


Impressions 4%A decrease in impressions reflects the bot

traffic that has been weeded out

Clicks/CTR 17% 20%Clicks and CTR rate both decreased, both

promising results as this was probably all

bot traffic

Conversions/Click 13%

Conversions per click increased, suggesting

that at least some bot traffic has been

successfully removed and ads are now

being more concentrated on an engaged

and interested audience

No advertiser wants to waste their ad spend on bots so making any effort you can to

minimize bot traffic should only have a positive impact on your campaign.

What’s next: Unfortunately fraudsters are extremely adaptable and optimize quickly so

always be on the lookout for ways to eliminate bots.

Optimization: Inventory Quality

Some advertisers only want to display ads on certain sites while others appreciate as much exposure as

possible. We tested what happened when we only displayed ads on select inventory.


Impressions 38%A decrease in impressions is caused by the

decrease in overall available inventory.

Clicks/CTR 20% 28%The decrease in overall clicks is likely

driven by the decrease of impressions. Of

the impressions displayed however, there

seems to be more audience engagement.

Conversions/Click 75%

Again, although overall impressions and

clicks went down, the rate of conversions to

clicks went up substantially. This suggests

that displaying ads on quality inventory

reaches a more qualified audience.

What works for one advertiser won’t necessarily work for another. You should always test

your own campaign.

What’s next?: More optimizing, always.

Summary and Conclusion

5

Summary

What you know:


Core MetricsImpressions, Clicks, Conversions, RoAS

Core DimensionsInventory Source, Creatives, Time of Day, Landing

Page

Intelligent Spending CPM, CPC, CPA

Execution and Optimization

There are a myriad of ways to optimize your

campaign once you have an understanding of your

core metrics

Conclusion

Main Takeaways

Congratulations! You’re ready to create, manage, and optimize your own display campaigns. Don’t forget

that just about anything is possible with RTB, make sure you constantly test, and always be optimizing


Questions?

Arjun Dev AroraChairman/Founder

ReTargeter

@ArjunDArora

[email protected]

Thank You