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Programmatic 2.0 - Optimization for Next Generation of Digital Advertising

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Programmatic is eating the world. With more ad formats, data signals, and competitors than ever, smart marketers need to have the right strategy to succeed in the next generation of digital advertising. Joe Luchs from Beeswax will discuss modern optimization and the tactics sophisticated marketers are using to win.

Published in: Marketing
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Programmatic 2.0 - Optimization for Next Generation of Digital Advertising

  1. 1. Programmatic 2.0 Optimization for the Next Generation of Digital Advertising
  2. 2. VP, Enterprise Joe Luchs
  3. 3. 1994 The Genesis of Digital Advertising 44% CTR!
  4. 4. 2000 Ad Networks Take Shape
  5. 5. 2007 The Advent of Programmatic
  6. 6. 2013 Mobile Breaks $10B
  7. 7. 2016 Video Breaks $10B
  8. 8. 2016 2017 2018 2019 2020 $25.91 $36.31 $47.37 $57.35 $68.87 +47.1% +40.2% +30.5% +21.1% +20.1% “Programmatic is Eating the World” Today
  9. 9. Video Audio Display Mobile Digital OOH CTV / OTT Linear Native And It’s Only Getting More Complex
  10. 10. Optimization: The Key to Success in the New Era of Programmatic
  11. 11. op·ti·mi·za·tion /ˌäptəməˈzāSHən,ˌäptəˌmīˈzāSHən/ noun “Finding an alternative with the most cost effective or highest achievable performance under the given constraints, by maximizing desired factors and minimizing undesired ones.”
  12. 12. So Why is Optimization So Important?
  13. 13. Business Outcomes > Proxy Metrics Incrementality ROAS The Value of Optimization 1 2 3
  14. 14. 1 Outcomes > Proxies Optimize Towards True Goals CTR / VCR Viewability/ Time-in-view CPA / CPI ROAS / LTV / OFFLINE INCREMENTALITY
  15. 15. 2 Drive Incremental Performance Don’t Pay For Organic Actions A B
  16. 16. 3 ROAS Show Me the Money = Precision Results
  17. 17. The Way Forward: A New Approach to Optimization
  18. 18. The Optimization Landscape Standard Strategies Shared optimization algorithms that are great for upper-funnel
  19. 19. The Optimization Landscape Standard Strategies Bid Modifiers Adjust bids against any RTB input to drive results Shared optimization algorithms that are great for upper-funnel
  20. 20. Standard Strategies Get all the features of a traditional DSP on Day 1 Bid Modifiers Adjust bids against any RTB input to drive results Bring Your Own Algorithm Upload multivariate models directly to the bidder The Optimization Landscape
  21. 21. Nothing Exists in a Vacuum The Importance of Multivariate Modeling
  22. 22. Key Factors that Power Optimization The who, the where, the when, and the $$$ User Data T H E W H O How valuable are your customers? Inventory Factors T H E W H E R E How valuable is the inventory? Time Decay T H E W H E N How long has it been? Price Data T H E $ $ $ How much is every impression worth?
  23. 23. User Classification: "Good" Bidding Strategy: Bid always Users as Segments User Classification: "Bad" Bidding Strategy: Bid never Users as Scores User Classification: Score 1.67 for offer ABC Bidding Strategy: Increase bid by 67% User Classification: Score 0.21 for offer ABC Bidding Strategy: Decrease bid by 79% VS.
  24. 24. Platform Exchange domain value iOS Rubicon nytimes.com 1.50 iOS Index cnn.com 2.50 Android Pubmatic cnn.co.uk 3.50 ... ... ... Android AdX axios.com 4.50 Multivariate Inventory Factors Set bid prices based on a specific, verified inventory source
  25. 25. Time Matters! Adjust your bid price based on engagement recency Visited 5 minutes ago Increase Bid Price by 48% = Time Decay Bidding StrategyUser Visited 2 days ago Decrease Bid Price by 23% =
  26. 26. Real World Example 3.1 X User is worth average. A user with 3 past purchases just put $150 worth of goods in their shopping cart 2.4 X Recency is worth average. This same user appears in a programmatic auction 7 minutes later 1.1X Site/Exchange/OS combo is worth average. They appear on a low quality site, in an urban geolocation, on an iOS device 0.062% Likelihood of for conversion. Based on historical data, a $6.24 bid is warranted.
  27. 27. Auction-Level Data First-Party Data Real-World Insights ● Wins ● Bids ● Conversions Collect & Model Data Combine data sets and build multivariate models to predict optimal bid price Traffic Campaigns Get results Upload Model Upload your model Create a Feedback Loop
  28. 28. Programmatic is More Complex Than Ever Great Data and Optimization is Key Flexible Tech Can Help You Win Key Takeaways 1 2 3
  29. 29. Thank You!

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