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Moneyball
        How buying by “On Base Percentage”
rather than “RBIs” drives results in Display Advertising


                         Olly Downs
              Consulting Chief Scientist, AdReady




                                                           1
THE ART OF WINNING
AN UNFAIR GAME




  2002 New York Yankees   2002 Oakland Athletics


                                                   2
THE ART OF WINNING
AN UNFAIR GAME
          $125,000,000




                            $41,000,000




  2002 New York Yankees   2002 Oakland Athletics


                                                   2
WHY?
 BASEBALL & DIGITAL ADVERTISING



                                  Baseball        Digital Advertising
                                  Runs                  Actions
Goal
                          (more than opponent)   (more than alternative)

Asset                              Players            Media / Data


Budget                        Player Salaries       Media Purchased

                                  9 Innings
Constraint                                        Campaign Duration
                                  (27 outs)

                                                                           3
WHY?
  BASEBALL & DIGITAL ADVERTISING



                                      Baseball                            Digital Advertising

                                 RBI (runs-batted-in)
  How to Evaluate                                                                eCPC / eCPA
                               OBP (on-base-percentage)


The Premium Strategy                     A-Rod                            Home Pages / Sponsorships


  The Non-Obvious         Find Undervalued Talent/Use Different              Find Undervalued,
      Strategy                          Metrics                          Non-Obvious Sites/Segments

                           Pick More Mature Players or Identify
                                                                  Intelligently Initialize and/or Quickly Adapt/
                          Commonalities of Younger Players with
                                                                         Optimize Campaign Parameters
                                     Known Players


                                                                                                                   4
MONEYBALL
STRATEGY




            5
MONEYBALL
STRATEGY


• We might want to buy runs, but we benefit from players who get on base

  • Purchase Established Players based on different metrics – OBP vs. HR
  • Selectively draft College Baseball players rather than High School Players – stable statistics
  • Buying High School Players, look for similarities with mature players who have the right metrics




                                                                                                       5
MONEYBALL
STRATEGY


• We might want to buy runs, but we benefit from players who get on base

  • Purchase Established Players based on different metrics – OBP vs. HR
  • Selectively draft College Baseball players rather than High School Players – stable statistics
  • Buying High School Players, look for similarities with mature players who have the right metrics




                                                                                                       5
MONEYBALL
STRATEGY


• We might want to buy runs, but we benefit from players who get on base

  • Purchase Established Players based on different metrics – OBP vs. HR
  • Selectively draft College Baseball players rather than High School Players – stable statistics
  • Buying High School Players, look for similarities with mature players who have the right metrics

• It’s been 9 years since the Oakland A’s incredible season

  • Moneyball principles have garnered significant adoption across MLB
  • BUT inefficiencies still exist




                                                                                                       5
THE “EFFICIENT FRONTIER”
BASEBALL




                           100%
     Signing Probability




                           50%


                                  Salary Offered
                            0%



                                                   6
THE “EFFICIENT FRONTIER”
BASEBALL


                                  What at least one other
                                   team is willing to pay


                           100%
     Signing Probability




                           50%


                                                            Salary Offered
                            0%



                                                                             6
THE “EFFICIENT FRONTIER”                               W
BASEBALL




                           100%
     Signing Probability




                           50%


                                  Salary Offered
                            0%



                                                   6
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS




                                      7
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS


 • Top 10 players                     Players by Salary   Team                           Salary
                                      Alex Rodriguez              New York Yankees                $32,000,000
   • By 2011 Salary                   Vernon Wells               Los Angeles Angels               $26,642,857
                                      CC Sabathia                 New York Yankees                $24,285,714
                                      Mark Teixeira               New York Yankees                $23,125,000
                                      Todd Helton                 Colorado Rockies                $20,275,000
                                      Miguel Cabrera                  Detroit Tigers              $20,000,000
                                      Roy Halladay               Philadelphia Phillies            $20,000,000
                                      Ryan Howard                Philadelphia Phillies            $20,000,000
                                      Alfonso Soriano                 Chicago Cubs                $19,000,000
                                      Carlos Lee                    Houston Astros                $19,000,000




                                                                                                                7
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS


 • Top 10 players                     Players by AVG    Team                         Salary
                                      Skip Schumaker          St Louis Cardinals               $2,750,000
   • By 2011 Salary                   Jimmy Rollins          Philadelphia Phillies             $8,500,000
   • By 2011 Batting Average          Chase Utley            Philadelphia Phillies            $15,285,714
                                      Jorge Posada            New York Yankees                $13,100,000
                                      Brett Gardner           New York Yankees                  $529,500
                                      Ryan Braun             Milwaukee Brewers                 $4,287,500
                                      Kelly Shoppach            Tampa Bay Rays                 $3,000,000
                                      David Freese            St Louis Cardinals                $416,000
                                      Chris Young        Arizona Diamondbacks                  $5,200,000
                                      Magglio Ordonez             Detroit Tigers              $10,000,000




                                                                                                            7
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS


 • Top 10 players                     Players by HR     Team                      Salary
                                      Jose Bautista           Toronto Blue Jays             $8,000,000
   • By 2011 Salary                   Matt Kemp           Los Angeles Dodgers               $7,100,000
   • By 2011 Batting Average          Mark Reynolds          Baltimore Orioles              $5,333,333
                                      Dan Uggla                  Atlanta Braves             $9,146,942
   • By 2011 Home Runs                Mike Stanton              Florida Marlins              $416,000
                                      Jacoby Ellsbury          Boston Red Sox               $2,400,000
                                      Jay Bruce                 Cincinnati Reds             $2,791,667
                                      Michael Morse       Washington Nationals              $1,050,000
                                      Paul Konerko          Chicago White Sox              $12,000,000
                                      Troy Tulowitzki        Colorado Rockies               $5,500,000




                                                                                                         7
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS


 • Top 10 players                     Players by OBP    Team                      Salary
                                      Jose Bautista           Toronto Blue Jays             $8,000,000
   • By 2011 Salary
                                      Matt Kemp           Los Angeles Dodgers               $7,100,000
   • By 2011 Batting Average          Mark Reynolds          Baltimore Orioles              $5,333,333
                                      Dan Uggla                  Atlanta Braves             $9,146,942
   • By 2011 Home Runs                Mike Stanton              Florida Marlins              $416,000
   • By On Base Percentage            Jacoby Ellsbury
                                      Jay Bruce
                                                               Boston Red Sox
                                                                Cincinnati Reds
                                                                                            $2,400,000
                                                                                            $2,791,667
                                      Michael Morse       Washington Nationals              $1,050,000
                                      Paul Konerko          Chicago White Sox              $12,000,000
                                      Troy Tulowitzki        Colorado Rockies               $5,500,000




                                                                                                         7
EFFICIENT FRONTIER
HIGH-COST, HIGH PERFORMANCE PLAYERS


 • Top 10 players                      Players by OBP   Team                      Salary
                                      Jose Bautista           Toronto Blue Jays             $8,000,000
   • By 2011 Salary
                                      Matt Kemp           Los Angeles Dodgers               $7,100,000
   • By 2011 Batting Average          Mark Reynolds          Baltimore Orioles              $5,333,333
                                      Dan Uggla                  Atlanta Braves             $9,146,942
   • By 2011 Home Runs                Mike Stanton              Florida Marlins              $416,000
   • By On Base Percentage            Jacoby Ellsbury
                                      Jay Bruce
                                                               Boston Red Sox
                                                                Cincinnati Reds
                                                                                            $2,400,000
                                                                                            $2,791,667
                                      Michael Morse       Washington Nationals              $1,050,000
                                      Paul Konerko          Chicago White Sox              $12,000,000
                                      Troy Tulowitzki        Colorado Rockies               $5,500,000



 • Optimizing these metrics and combinations of them at all costs is great if you
   don’t have a constrained budget…
                                                                                                         7
EFFICIENT FRONTIER
HIGH-PERFORMANCE PER DOLLAR PLAYERS




                                      8
EFFICIENT FRONTIER
HIGH-PERFORMANCE PER DOLLAR PLAYERS


• Now let’s look at the Top 10 Players per $ against the same metrics
• Top 10 batters Per $                 Players by AVG/$ Team                        2011 Salary
                                      David Freese             St Louis Cardinals            $416,000
  • By 2011 Batting Average           Ryan Roberts        Arizona Diamondbacks               $423,500
                                      Brett Gardner            New York Yankees              $529,500
                                      Jason Jaramillo          Pittsburgh Pirates            $422,500
                                      Jason Donald             Cleveland Indians             $423,200
                                      Don Kelly                    Detroit Tigers            $423,000
                                      Lucas Duda                 New York Mets               $414,000
                                      Starlin Castro               Chicago Cubs              $440,000
                                      Emilio Bonifacio            Florida Marlins            $425,000
                                      Jason Bourgeois            Houston Astros              $423,000




                                                                                                        8
EFFICIENT FRONTIER
HIGH-PERFORMANCE PER DOLLAR PLAYERS


• Now let’s look at the Top 10 Players per $ against the same metrics
• Top 10 batters Per $                 Players by HR/$  Team                       2011 Salary
                                      Mark Trumbo            Los Angeles Angels             $414,000
 • By 2011 Batting Average            Mike Stanton               Florida Marlins            $416,000
 • By 2011 Home Runs                  Andrew McCutchen        Pittsburgh Pirates            $452,500
                                      Neil Walker             Pittsburgh Pirates            $437,000
                                      Carlos Santana          Cleveland Indians             $416,600
                                      J.P. Arencibia          Toronto Blue Jays             $417,400
                                      Freddie Freeman             Atlanta Braves            $414,000
                                      Gaby Sanchez               Florida Marlins            $431,000
                                      Logan Morrison             Florida Marlins            $414,000
                                      Danny Valencia           Minnesota Twins              $437,500




                                                                                                       8
EFFICIENT FRONTIER
HIGH-PERFORMANCE PER DOLLAR PLAYERS


• Now let’s look at the Top 10 Players per $ against the same metrics
• Top 10 batters Per $                 Players by OBP/$ Team                        2011 Salary
                                      David Freese            St Louis Cardinals                  $416,000
 • By 2011 Batting Average            Allen Craig             St Louis Cardinals                  $414,000
 • By 2011 Home Runs                  A.J. Ellis           Los Angeles Dodgers                    $421,000
                                      Lucas Duda                 New York Mets                    $414,000
 • By 2011 On Base Percentage         Jason Donald             Cleveland Indians                  $423,200
                                      Dexter Fowler           Colorado Rockies                    $424,000
                                      Mike Stanton                Florida Marlins                 $416,000
                                      Emilio Bonifacio            Florida Marlins                 $425,000
                                      Jason Jaramillo          Pittsburgh Pirates                 $422,500
                                      Carlos Santana           Cleveland Indians                  $416,600




                                                                                                             8
“David Freese completed a
startling night of comebacks
with a home run leading off
the bottom of the 11th
inning to beat Texas 10-9 on
Thursday, and suddenly fans
all over got something they
have waited a long time to
see: Game 7 in the World
Series."

2011 World Series MVP...
...and Top Moneyball Pick in
the Major Leagues!
                           DAVID FREESE
                                          9
EFFICIENT FRONTIER
COST-EFFECTIVE WAYS TO LOAD THE BASES




                                        10
EFFICIENT FRONTIER
COST-EFFECTIVE WAYS TO LOAD THE BASES
• On-Base Percentage is still uncorrelated with Salary!!
                    0.4




                                                                                                                     OBP
                      0.3



                          0.2

                                                                                                             A-Rod
                                                                                                   $26,000,000
                            0.1                                                            $15,000,000
                                                                                  $7,500,000
                                                                         $3,500,000
                                                            $1,500,000         Salary
                                  0
                                                 $750,000
                                      $250,000


                                                                                                                           10
EFFICIENT FRONTIER
COST-EFFECTIVE WAYS TO LOAD THE BASES
• Which means it’s clear where to put your money to
  maximize OBP per $MM!
                   0.5




                                                                                                                  OBP/$MM
                    0.4



                     0.3
                                                                                                          A-Rod
                                                                                                $26,000,000
                                                                                        $15,000,000
                         0.1
                                                                                $7,500,000
                                                                      $3,500,000
                                                         $1,500,000         Salary
                               0
                                              $750,000
                                   $250,000


                                                                                                                            10
EFFICIENT FRONTIER
  PLAYER PERFORMANCE PER $



                           175

• Looking for the hitter




                                                                                                                        RBI/$MM
  to deliver the RBI’s     131


• There’s a pretty good      88
  valuation of home-
  run hitters
                                 44                                                                             A-Rod
                                                                                                     $23,000,000
                                                                                            $15,000,000
                                                                                   $7,500,000
                                                                         $3,500,000
                                  0                         $1,500,000
                                                 $750,000                       Salary
                                      $500,000
                                                                                                                                  11
EFFICIENT FRONTIER
  PLAYER PERFORMANCE PER $



                           175

• Looking for the hitter




                                                                                                                        RBI/$MM
  to deliver the RBI’s     131


• There’s a pretty good      88
  valuation of home-
  run hitters
                                 44                                                                             A-Rod
                                                                                                     $23,000,000
                                                                                            $15,000,000
                                                                                   $7,500,000
                                                                         $3,500,000
                                  0                         $1,500,000
                                                 $750,000                       Salary
                                      $500,000
                                                                                                                                  11
MONEYADS
THE STRATEGY




               12
MONEYADS
THE STRATEGY

Baseball                                         Digital Advertising
We might want to buy runs, but we benefit         We want to drive consumer action, but we can
from players who get on base                     benefit by growing our remarketable audience
   • Purchase Established Players based on         • Target campaigns to optimize audience
     different metrics – OBP vs. HR                  acquisition rather than actions, which
                                                     demands a lower premium per impression
  • Selectively draft College Baseball players     • Find pockets of inventory that we know
    rather than High School Players – stable         from historical data will deliver high-quality
    statistics                                       click-based audience at low cost

  • Buying High School Players, look for           • Buy previously unseen media based on
    commonalities with the background of             commonality with seen media that performs
    mature players who now have good                 well against our new target metrics
    “different metrics”

                                                                                                      12
MONEYADS
THE STRATEGY

Baseball                                         Digital Advertising
We might want to buy runs, but we benefit         We want to drive consumer action, but we can
from players who get on base                     benefit by growing our remarketable audience
   • Purchase Established Players based on         • Target campaigns to optimize audience
     different metrics – OBP vs. HR                  acquisition rather than actions, which
                                                     demands a lower premium per impression
  • Selectively draft College Baseball players     • Find pockets of inventory that we know
    rather than High School Players – stable         from historical data will deliver high-quality
    statistics                                       click-based audience at low cost

  • Buying High School Players, look for           • Buy previously unseen media based on
    commonalities with the background of             commonality with seen media that performs
    mature players who now have good                 well against our new target metrics
    “different metrics”

                                                                                                      12
MONEYADS
THE STRATEGY

Baseball                                         Digital Advertising
We might want to buy runs, but we benefit         We want to drive consumer action, but we can
from players who get on base                     benefit by growing our remarketable audience
   • Purchase Established Players based on         • Target campaigns to optimize audience
     different metrics – OBP vs. HR                  acquisition rather than actions, which
                                                     demands a lower premium per impression
  • Selectively draft College Baseball players     • Find pockets of inventory that we know
    rather than High School Players – stable         from historical data will deliver high-quality
    statistics                                       click-based audience at low cost

  • Buying High School Players, look for           • Buy previously unseen media based on
    commonalities with the background of             commonality with seen media that performs
    mature players who now have good                 well against our new target metrics
    “different metrics”

                                                                                                      12
MONEYADS
THE STRATEGY

Baseball                                         Digital Advertising
We might want to buy runs, but we benefit         We want to drive consumer action, but we can
from players who get on base                     benefit by growing our remarketable audience
   • Purchase Established Players based on         • Target campaigns to optimize audience
     different metrics – OBP vs. HR                  acquisition rather than actions, which
                                                     demands a lower premium per impression
  • Selectively draft College Baseball players     • Find pockets of inventory that we know
    rather than High School Players – stable         from historical data will deliver high-quality
    statistics                                       click-based audience at low cost

  • Buying High School Players, look for           • Buy previously unseen media based on
    commonalities with the background of             commonality with seen media that performs
    mature players who now have good                 well against our new target metrics
    “different metrics”

                                                                                                      12
THE “EFFICIENT FRONTIER”
DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA




                                                                                        Delivery=Spend/Budget
            1.5


             1.1


              0.8


              0.4                                                                     $1.60
                                                                              $1.30
                                                                     $1.00
                                                             $0.80
                    0
                                                     $0.60
                                             $0.40      CPC Bid($)
                                   $0.20
                        $0.00

                         2nd Price Auction Model     Google KW CPC Delivery

                                                                                                                13
THE “EFFICIENT FRONTIER”
DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA




                                                                                        Delivery=Spend/Budget
            1.5


             1.1


              0.8


              0.4                                                                     $1.60
                                                                              $1.30
                                                                     $1.00
                                                             $0.80
                    0
                                                     $0.60
                                             $0.40      CPC Bid($)
                                   $0.20
                        $0.00

                         2nd Price Auction Model     Google KW CPC Delivery

                                                                                                                13
THE “EFFICIENT FRONTIER”
DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA




                                                                                        Delivery=Spend/Budget
            1.5


             1.1


              0.8                                                                                               Diminishing Returns

              0.4                                                                     $1.60
                                                                              $1.30
                                                                     $1.00
                                                             $0.80
                    0
                                                     $0.60
                                             $0.40      CPC Bid($)
                                   $0.20
                        $0.00

                         2nd Price Auction Model     Google KW CPC Delivery

                                                                                                                                 13
THE EFFICIENT FRONTIER
DISPLAY ADVERTISING - PERFORMANCE


               4.00




                                                                                                             1/CPA Perf
                3.00



                 2.00



                  1.00
                                                                                                $5.50$6.00
                                                                                      $4.50$5.00
                                                                  $3.00 $3.50 $4.00
                        0                             $2.00 $2.50
                                                $1.50
                                          $1.00                Bid, CPC ($)
                                    $0.50
                            $0.00


                                                                                                                          14
THE EFFICIENT FRONTIER
DISPLAY ADVERTISING - PERFORMANCE


                 4.00




                                                                                                               1/CPA Perf
 At low bids, we 3.00
                  win
      low quality
  impressions that
 have low CTR and  2.00
   convert poorly

                    1.00
                                                                                                  $5.50$6.00
                                                                                        $4.50$5.00
                                                                    $3.00 $3.50 $4.00
                          0                             $2.00 $2.50
                                                  $1.50
                                            $1.00                Bid, CPC ($)
                                      $0.50
                              $0.00


                                                                                                                            14
THE EFFICIENT FRONTIER
DISPLAY ADVERTISING - PERFORMANCE

                                                                                        At high bids, we buy premium
                 4.00                                                                   impressions that result in high
                                                                                                CPC and CPA




                                                                                                               1/CPA Perf
 At low bids, we 3.00
                  win
      low quality
  impressions that
 have low CTR and  2.00
   convert poorly

                    1.00
                                                                                                  $5.50$6.00
                                                                                        $4.50$5.00
                                                                    $3.00 $3.50 $4.00
                          0                             $2.00 $2.50
                                                  $1.50
                                            $1.00                Bid, CPC ($)
                                      $0.50
                              $0.00


                                                                                                                            14
THE EFFICIENT FRONTIER
DISPLAY ADVERTISING - PERFORMANCE

                                                                                        At high bids, we buy premium
                 4.00                                                                   impressions that result in high
                                                                                                CPC and CPA




                                                                                                               1/CPA Perf
 At low bids, we 3.00
                  win
      low quality
  impressions that
 have low CTR and  2.00
   convert poorly

                    1.00
                                                                                                  $5.50$6.00
                                                                                        $4.50$5.00
                                                                    $3.00 $3.50 $4.00
                          0                             $2.00 $2.50
                                                  $1.50
                                            $1.00                Bid, CPC ($)
                                      $0.50
                              $0.00


                                                                                                                            14
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA




                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run




                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run




                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run

 • This allows us to identify optimal
   combinations of media sources, budgets to
   apply and bidding delivery and performance
   curves




                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run

 • This allows us to identify optimal
   combinations of media sources, budgets to
   apply and bidding delivery and performance
   curves




                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run

 • This allows us to identify optimal
   combinations of media sources, budgets to
   apply and bidding delivery and performance
   curves

 • At each node of the tree we have both
   spend, initial bid, delivery and performance
   models



                                                           15
EFFICIENT FRONTIER
FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA

 • We use predictive models to discover
   statistically similar media to media not
   previously run

 • This allows us to identify optimal
   combinations of media sources, budgets to
   apply and bidding delivery and performance
   curves

 • At each node of the tree we have both
   spend, initial bid, delivery and performance
   models



                                                           15
EXAMPLE
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                                   1.50                                                                                          $300.00
                                                                                        $276.45



                                   1.13                                                                                          $225.00
           Delivery=Spend/Budget




                                                                                                 $165.98




                                                                                                                                           CPA($)
                                   0.75   Commonality-Based                                                                      $150.00
                                           Intelligent Initial Bid                                                     $127.89

                                               (Bid=$2.20)
                                                           $69.15
                                   0.38                                                                                           $75.00



                                     0                                                                                               $0
                                          1     2      3        4     5     6       7        8        9     10   11   12   13
                                                                                Data Points
                                                                     Delivery                             CPA
                                                                                                                                                    16
EXAMPLE




                                                                                                                                           Delivery=Spend/Budget
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                 1.5

                                   1.50                                                                                                   $300.00
                                                                                                 $276.45
                                          1.1

                                   1.13                                                                                                   $225.00
           Delivery=Spend/Budget




                                          0.8
                                                                                                          $165.98




                                                                                                                                                                        CPA($)
                                   0.75 0.4 Commonality-Based                                                                   $127.89
                                                                                                                                          $150.00
                                                    Intelligent Initial Bid
                                                        (Bid=$2.20)
                                                0                   $69.15
                                   0.38                                                             CPC Bid($)                             $75.00



                                     0                                                                                                                             $0
                                                1        2      3        4     5     6       7        8        9     10   11   12   13
                                                                                         Data Points
                                                                              Delivery                             CPA
                                                                                                                                                                                 16
EXAMPLE
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                                   1.50                                                                                          $300.00
                                                                                        $276.45
                                              First Bid Optimization
                                          (Optimize Delivery Bid=$3.85)
                                   1.13                                                                                          $225.00
           Delivery=Spend/Budget




                                                                                                 $165.98




                                                                                                                                           CPA($)
                                   0.75   Commonality-Based                                                                      $150.00
                                           Intelligent Initial Bid                                                     $127.89

                                               (Bid=$2.20)
                                                           $69.15
                                   0.38                                                                                           $75.00



                                     0                                                                                               $0
                                          1     2      3        4     5     6       7        8        9     10   11   12   13
                                                                                Data Points
                                                                     Delivery                             CPA
                                                                                                                                                    16
EXAMPLE
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                                   1.50                                                                                          $300.00
                                                                                        $276.45
                                              First Bid Optimization
                                          (Optimize Delivery Bid=$3.85)
                                   1.13                                                                                          $225.00
           Delivery=Spend/Budget




                                                                                                 $165.98




                                                                                                                                           CPA($)
                                   0.75   Commonality-Based                                                                      $150.00
                                           Intelligent Initial Bid                                                     $127.89

                                               (Bid=$2.20)
                                                           $69.15
                                   0.38                                                                                           $75.00



                                     0                                                                                               $0
                                          1     2      3        4     5     6       7        8        9     10   11   12   13
                                                                                Data Points
                                                                     Delivery                             CPA
                                                                                                                                                    16
EXAMPLE




                                                                                                                                           Delivery=Spend/Budget
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                 1.5

                                   1.50                                                                                                   $300.00
                                                                                                 $276.45
                                          1.1       First Bid Optimization
                                                (Optimize Delivery Bid=$3.85)
                                   1.13                                                                                                   $225.00
           Delivery=Spend/Budget




                                          0.8
                                                                                                          $165.98




                                                                                                                                                                        CPA($)
                                   0.75 0.4 Commonality-Based                                                                   $127.89
                                                                                                                                          $150.00
                                                    Intelligent Initial Bid
                                                        (Bid=$2.20)
                                                0                   $69.15
                                   0.38                                                              CPC Bid($)                            $75.00



                                     0                                                                                                                             $0
                                                1        2      3        4     5     6       7        8        9     10   11   12   13
                                                                                         Data Points
                                                                              Delivery                             CPA
                                                                                                                                                                                 16
EXAMPLE                   6.00
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly




                                                                                                                                       1/CPA Perf
                                    1.50
                                   4.50                                                                                            $300.00
                                                                                          $276.45
                                                First Bid Optimization
                                            (Optimize Delivery Bid=$3.85)
                                   1.13                                                                                            $225.00
           Delivery=Spend/Budget




                                   3.00

                                                                                                   $165.98




                                                                                                                                                CPA($)
                                   0.75     Commonality-Based                                                                      $150.00
                                    1.50                                                                                 $127.89
                                             Intelligent Initial Bid
                                                 (Bid=$2.20)
                                                             $69.15
                                   0.38 0                                                                                           $75.00
                                                                                          Bid, CPC ($)

                                      0                                                                                                $0
                                            1     2      3        4     5     6       7        8        9     10   11   12   13
                                                                                  Data Points
                                                                       Delivery                             CPA
                                                                                                                                                         16
EXAMPLE
ADVERTISING EMPLOYING THE STRATEGIES
• These models are estimated dynamically and used to learn quickly
                                   1.50                                                                                               $300.00
                                                                                        $276.45
                                              First Bid Optimization                                               Second Bid Optimization
                                          (Optimize Delivery Bid=$3.85)                                             (Optimize Performance
                                   1.13                                                                         /Delivery Trade-Off, Bid=$2.00)
                                                                                                                                       $225.00
           Delivery=Spend/Budget




                                                                                                 $165.98




                                                                                                                                                CPA($)
                                   0.75   Commonality-Based                                                                           $150.00
                                           Intelligent Initial Bid                                                          $127.89

                                               (Bid=$2.20)
                                                           $69.15
                                   0.38                                                                                                $75.00



                                     0                                                                                                     $0
                                          1     2      3        4     5     6       7        8        9     10      11    12    13
                                                                                Data Points
                                                                     Delivery                             CPA
                                                                                                                                                         16
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING




                                       17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!




                                       17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!
• Get on base!



                                       7 ways!




                                                 17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!
• Get on base!

• Batter Up!




                                       17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!
• Get on base!

• Batter Up!
• Get on base!




                                       17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!
• Get on base!

• Batter Up!
• Get on base!

• Get the Slugger up!!...




                                       17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING

• Batter Up!
• Get on base!

• Batter Up!
• Get on base!

• Get the Slugger up!!...
• ...and run them in!                  !!!



                                             17
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING




                                       18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING




                                       18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                       • Construct the media plan...
                                       • ...to efficiently acquire retargetable
                                         audience




                                                                                 18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                        • Construct the media plan...
                                        • ...to efficiently acquire retargetable
                                          audience
                                          • Keyword Campaigns - optimized for click-
                                            generation
                           Many ways!     • Site Targeted Campaigns - targeted to placements
                                            optimized to get clicks for advertiszer




                                                                                               18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                       • Construct the media plan...
                                       • ...to efficiently acquire retargetable
                                         audience
                                         • Keyword Campaigns - optimized for click-
                                           generation
                                         • Site Targeted Campaigns - targeted to placements
                                           optimized to get clicks for advertiszer
                                         • Look-a-like Users/Behavioral Segments
                                         • Social Media and Search




                                                                                              18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                       • Construct the media plan...
                                       • ...to efficiently acquire retargetable
                                         audience
                                         • Keyword Campaigns - optimized for click-
                                           generation
                                         • Site Targeted Campaigns - targeted to placements
                                           optimized to get clicks for advertiszer
                                         • Look-a-like Users/Behavioral Segments
                                         • Social Media and Search
                                       • Retarget!



                                                                                              18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                       • Construct the media plan...
                                       • ...to efficiently acquire retargetable
                                         audience
                                         • Keyword Campaigns - optimized for click-
                                           generation
                                         • Site Targeted Campaigns - targeted to placements
                                           optimized to get clicks for advertiszer
                                         • Look-a-like Users/Behavioral Segments
                      !!!                • Social Media and Search
                                       • Retarget!
                                       • ..and convert the audience!


                                                                                              18
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


                                       • Construct the media plan...
                                       • ...to efficiently acquire retargetable
                                         audience
                                         • Keyword Campaigns - optimized for click-
                                           generation
                                         • Site Targeted Campaigns - targeted to placements
                                           optimized to get clicks for advertiszer
                                         • Look-a-like Users/Behavioral Segments
                                         • Social Media and Search
                                       • Retarget!
                                       • ..and convert the audience!


                                                                                              19
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING


 • Construct the media plan...
 • ...to efficiently acquire retargetable
   audience
   • Keyword Campaigns - optimized for click-
     generation
   • Site Targeted Campaigns - targeted to placements
     optimized to get clicks for advertiszer
   • Look-a-like Users/Behavioral Segments
   • Social Media and Search
 • Retarget!
 • ..and convert the audience!


                                                        19
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING
                                                                     Conventional Approach
 • Construct the media plan...                                                        Targeted
                                                                                      Campaign
 • ...to efficiently acquire retargetable
   audience
   • Keyword Campaigns - optimized for click-                                                    Impressions
     generation                                         Driving traffic through to one-time
                                                                    conversion.
   • Site Targeted Campaigns - targeted to placements
     optimized to get clicks for advertiszer              Treat first-time and returning
                                                                visitors the same
   • Look-a-like Users/Behavioral Segments
                                                                                                   Clicks
   • Social Media and Search
 • Retarget!
 • ..and convert the audience!                                                                    Actions

                                                                                                               19
MONEYADS
FROM BASEBALL TO DISPLAY ADVERTISING
                                                                       MoneyAds Approach
 • Construct the media plan...                                                        Broad Audience
                                                                                   Acquisition Followed by
 • ...to efficiently acquire retargetable                                                 Retargeting
   audience
   • Keyword Campaigns - optimized for click-
                                                            Driving Traffic -> Building
                                                                                                     Impressions
     generation
                                                                Retargeting Pool
   • Site Targeted Campaigns - targeted to placements
     optimized to get clicks for advertiszer
   • Look-a-like Users/Behavioral Segments               Retargeting established cookie
                                                        pool, with message contextualized         Clicks/Cookies
   • Social Media and Search                              to previous site visits, to drive
                                                                    conversion
 • Retarget!
 • ..and convert the audience!                                                                           Actions

                                                                                                                   19
EXAMPLE
CONVENTIONAL APPROACH



        Site Content
                          Impressions Retargeting Campaign on
         Campaign                        current cookie pool
       eCPM:	

 $1.50
       eCPC: 	

$1.09       Clicks
       eCPA:	

 $184.92                     eCPM:	

 $2.92
                                            eCPC: 	

$2.36
                                            eCPA:	

 $73.02
                           Actions



                                                                20
EXAMPLE
MONEYADS APPROACH




                    21
EXAMPLE
MONEYADS APPROACH


Audience Acquisition Campaign
                                 Impressions
  eCPM:	

 $1.50
  eCPC: 	

$1.09
Retargeting campaign on         Clicks/Cookies
expanded cookie pool
  eCPM:	

 $2.92
  eCPC: 	

$2.36
  eCPA:	

 $73.02                  Actions
  Conversion Rate: 3.23%



                                                 21
EXAMPLE
MONEYADS APPROACH


Audience Acquisition Campaign
                                 Impressions     Overall Performance
  eCPM:	

 $1.50
  eCPC: 	

$1.09
Retargeting campaign on                                   CPCacquisition + CPCretargeting
                                Clicks/Cookies   eCPA =
expanded cookie pool                                   Retargeting Conversion Rate
  eCPM:	

 $2.92                                     = $106.95
  eCPC: 	

$2.36
  eCPA:	

 $73.02                  Actions
  Conversion Rate: 3.23%



                                                                                            21
TAKEAWAYS




            22
TAKEAWAYS




            22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.




                                                                  22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.




                                                                  22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.


2 - Be measured about what you buy - buy college rather than
high-school players.




                                                                  22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.


2 - Be measured about what you buy - buy college rather than
high-school players.




                                                                  22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.


2 - Be measured about what you buy - buy college rather than
high-school players.


3 - Diversify your talent - not everyone can afford to buy A-Rod!




                                                                    22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.


2 - Be measured about what you buy - buy college rather than
high-school players.


3 - Diversify your talent - not everyone can afford to buy A-Rod!




                                                                    22
TAKEAWAYS

1 - Focus on metrics that count towards a more balanced view of
marketing success - value all the methods for getting on base.


2 - Be measured about what you buy - buy college rather than
high-school players.


3 - Diversify your talent - not everyone can afford to buy A-Rod!


4 - You don’t need to spend a lot to be successful - use focused
strategies and robust data.




                                                                    22
THANK YOU!
odowns@adready.com
 @mathandporsches




                     23

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Olly downs-sic-2011

  • 1. Moneyball How buying by “On Base Percentage” rather than “RBIs” drives results in Display Advertising Olly Downs Consulting Chief Scientist, AdReady 1
  • 2. THE ART OF WINNING AN UNFAIR GAME 2002 New York Yankees 2002 Oakland Athletics 2
  • 3. THE ART OF WINNING AN UNFAIR GAME $125,000,000 $41,000,000 2002 New York Yankees 2002 Oakland Athletics 2
  • 4. WHY? BASEBALL & DIGITAL ADVERTISING Baseball Digital Advertising Runs Actions Goal (more than opponent) (more than alternative) Asset Players Media / Data Budget Player Salaries Media Purchased 9 Innings Constraint Campaign Duration (27 outs) 3
  • 5. WHY? BASEBALL & DIGITAL ADVERTISING Baseball Digital Advertising RBI (runs-batted-in) How to Evaluate eCPC / eCPA OBP (on-base-percentage) The Premium Strategy A-Rod Home Pages / Sponsorships The Non-Obvious Find Undervalued Talent/Use Different Find Undervalued, Strategy Metrics Non-Obvious Sites/Segments Pick More Mature Players or Identify Intelligently Initialize and/or Quickly Adapt/ Commonalities of Younger Players with Optimize Campaign Parameters Known Players 4
  • 7. MONEYBALL STRATEGY • We might want to buy runs, but we benefit from players who get on base • Purchase Established Players based on different metrics – OBP vs. HR • Selectively draft College Baseball players rather than High School Players – stable statistics • Buying High School Players, look for similarities with mature players who have the right metrics 5
  • 8. MONEYBALL STRATEGY • We might want to buy runs, but we benefit from players who get on base • Purchase Established Players based on different metrics – OBP vs. HR • Selectively draft College Baseball players rather than High School Players – stable statistics • Buying High School Players, look for similarities with mature players who have the right metrics 5
  • 9. MONEYBALL STRATEGY • We might want to buy runs, but we benefit from players who get on base • Purchase Established Players based on different metrics – OBP vs. HR • Selectively draft College Baseball players rather than High School Players – stable statistics • Buying High School Players, look for similarities with mature players who have the right metrics • It’s been 9 years since the Oakland A’s incredible season • Moneyball principles have garnered significant adoption across MLB • BUT inefficiencies still exist 5
  • 10. THE “EFFICIENT FRONTIER” BASEBALL 100% Signing Probability 50% Salary Offered 0% 6
  • 11. THE “EFFICIENT FRONTIER” BASEBALL What at least one other team is willing to pay 100% Signing Probability 50% Salary Offered 0% 6
  • 12. THE “EFFICIENT FRONTIER” W BASEBALL 100% Signing Probability 50% Salary Offered 0% 6
  • 13. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS 7
  • 14. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS • Top 10 players Players by Salary Team Salary Alex Rodriguez New York Yankees $32,000,000 • By 2011 Salary Vernon Wells Los Angeles Angels $26,642,857 CC Sabathia New York Yankees $24,285,714 Mark Teixeira New York Yankees $23,125,000 Todd Helton Colorado Rockies $20,275,000 Miguel Cabrera Detroit Tigers $20,000,000 Roy Halladay Philadelphia Phillies $20,000,000 Ryan Howard Philadelphia Phillies $20,000,000 Alfonso Soriano Chicago Cubs $19,000,000 Carlos Lee Houston Astros $19,000,000 7
  • 15. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS • Top 10 players Players by AVG Team Salary Skip Schumaker St Louis Cardinals $2,750,000 • By 2011 Salary Jimmy Rollins Philadelphia Phillies $8,500,000 • By 2011 Batting Average Chase Utley Philadelphia Phillies $15,285,714 Jorge Posada New York Yankees $13,100,000 Brett Gardner New York Yankees $529,500 Ryan Braun Milwaukee Brewers $4,287,500 Kelly Shoppach Tampa Bay Rays $3,000,000 David Freese St Louis Cardinals $416,000 Chris Young Arizona Diamondbacks $5,200,000 Magglio Ordonez Detroit Tigers $10,000,000 7
  • 16. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS • Top 10 players Players by HR Team Salary Jose Bautista Toronto Blue Jays $8,000,000 • By 2011 Salary Matt Kemp Los Angeles Dodgers $7,100,000 • By 2011 Batting Average Mark Reynolds Baltimore Orioles $5,333,333 Dan Uggla Atlanta Braves $9,146,942 • By 2011 Home Runs Mike Stanton Florida Marlins $416,000 Jacoby Ellsbury Boston Red Sox $2,400,000 Jay Bruce Cincinnati Reds $2,791,667 Michael Morse Washington Nationals $1,050,000 Paul Konerko Chicago White Sox $12,000,000 Troy Tulowitzki Colorado Rockies $5,500,000 7
  • 17. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS • Top 10 players Players by OBP Team Salary Jose Bautista Toronto Blue Jays $8,000,000 • By 2011 Salary Matt Kemp Los Angeles Dodgers $7,100,000 • By 2011 Batting Average Mark Reynolds Baltimore Orioles $5,333,333 Dan Uggla Atlanta Braves $9,146,942 • By 2011 Home Runs Mike Stanton Florida Marlins $416,000 • By On Base Percentage Jacoby Ellsbury Jay Bruce Boston Red Sox Cincinnati Reds $2,400,000 $2,791,667 Michael Morse Washington Nationals $1,050,000 Paul Konerko Chicago White Sox $12,000,000 Troy Tulowitzki Colorado Rockies $5,500,000 7
  • 18. EFFICIENT FRONTIER HIGH-COST, HIGH PERFORMANCE PLAYERS • Top 10 players Players by OBP Team Salary Jose Bautista Toronto Blue Jays $8,000,000 • By 2011 Salary Matt Kemp Los Angeles Dodgers $7,100,000 • By 2011 Batting Average Mark Reynolds Baltimore Orioles $5,333,333 Dan Uggla Atlanta Braves $9,146,942 • By 2011 Home Runs Mike Stanton Florida Marlins $416,000 • By On Base Percentage Jacoby Ellsbury Jay Bruce Boston Red Sox Cincinnati Reds $2,400,000 $2,791,667 Michael Morse Washington Nationals $1,050,000 Paul Konerko Chicago White Sox $12,000,000 Troy Tulowitzki Colorado Rockies $5,500,000 • Optimizing these metrics and combinations of them at all costs is great if you don’t have a constrained budget… 7
  • 20. EFFICIENT FRONTIER HIGH-PERFORMANCE PER DOLLAR PLAYERS • Now let’s look at the Top 10 Players per $ against the same metrics • Top 10 batters Per $ Players by AVG/$ Team 2011 Salary David Freese St Louis Cardinals $416,000 • By 2011 Batting Average Ryan Roberts Arizona Diamondbacks $423,500 Brett Gardner New York Yankees $529,500 Jason Jaramillo Pittsburgh Pirates $422,500 Jason Donald Cleveland Indians $423,200 Don Kelly Detroit Tigers $423,000 Lucas Duda New York Mets $414,000 Starlin Castro Chicago Cubs $440,000 Emilio Bonifacio Florida Marlins $425,000 Jason Bourgeois Houston Astros $423,000 8
  • 21. EFFICIENT FRONTIER HIGH-PERFORMANCE PER DOLLAR PLAYERS • Now let’s look at the Top 10 Players per $ against the same metrics • Top 10 batters Per $ Players by HR/$ Team 2011 Salary Mark Trumbo Los Angeles Angels $414,000 • By 2011 Batting Average Mike Stanton Florida Marlins $416,000 • By 2011 Home Runs Andrew McCutchen Pittsburgh Pirates $452,500 Neil Walker Pittsburgh Pirates $437,000 Carlos Santana Cleveland Indians $416,600 J.P. Arencibia Toronto Blue Jays $417,400 Freddie Freeman Atlanta Braves $414,000 Gaby Sanchez Florida Marlins $431,000 Logan Morrison Florida Marlins $414,000 Danny Valencia Minnesota Twins $437,500 8
  • 22. EFFICIENT FRONTIER HIGH-PERFORMANCE PER DOLLAR PLAYERS • Now let’s look at the Top 10 Players per $ against the same metrics • Top 10 batters Per $ Players by OBP/$ Team 2011 Salary David Freese St Louis Cardinals $416,000 • By 2011 Batting Average Allen Craig St Louis Cardinals $414,000 • By 2011 Home Runs A.J. Ellis Los Angeles Dodgers $421,000 Lucas Duda New York Mets $414,000 • By 2011 On Base Percentage Jason Donald Cleveland Indians $423,200 Dexter Fowler Colorado Rockies $424,000 Mike Stanton Florida Marlins $416,000 Emilio Bonifacio Florida Marlins $425,000 Jason Jaramillo Pittsburgh Pirates $422,500 Carlos Santana Cleveland Indians $416,600 8
  • 23. “David Freese completed a startling night of comebacks with a home run leading off the bottom of the 11th inning to beat Texas 10-9 on Thursday, and suddenly fans all over got something they have waited a long time to see: Game 7 in the World Series." 2011 World Series MVP... ...and Top Moneyball Pick in the Major Leagues! DAVID FREESE 9
  • 25. EFFICIENT FRONTIER COST-EFFECTIVE WAYS TO LOAD THE BASES • On-Base Percentage is still uncorrelated with Salary!! 0.4 OBP 0.3 0.2 A-Rod $26,000,000 0.1 $15,000,000 $7,500,000 $3,500,000 $1,500,000 Salary 0 $750,000 $250,000 10
  • 26. EFFICIENT FRONTIER COST-EFFECTIVE WAYS TO LOAD THE BASES • Which means it’s clear where to put your money to maximize OBP per $MM! 0.5 OBP/$MM 0.4 0.3 A-Rod $26,000,000 $15,000,000 0.1 $7,500,000 $3,500,000 $1,500,000 Salary 0 $750,000 $250,000 10
  • 27. EFFICIENT FRONTIER PLAYER PERFORMANCE PER $ 175 • Looking for the hitter RBI/$MM to deliver the RBI’s 131 • There’s a pretty good 88 valuation of home- run hitters 44 A-Rod $23,000,000 $15,000,000 $7,500,000 $3,500,000 0 $1,500,000 $750,000 Salary $500,000 11
  • 28. EFFICIENT FRONTIER PLAYER PERFORMANCE PER $ 175 • Looking for the hitter RBI/$MM to deliver the RBI’s 131 • There’s a pretty good 88 valuation of home- run hitters 44 A-Rod $23,000,000 $15,000,000 $7,500,000 $3,500,000 0 $1,500,000 $750,000 Salary $500,000 11
  • 30. MONEYADS THE STRATEGY Baseball Digital Advertising We might want to buy runs, but we benefit We want to drive consumer action, but we can from players who get on base benefit by growing our remarketable audience • Purchase Established Players based on • Target campaigns to optimize audience different metrics – OBP vs. HR acquisition rather than actions, which demands a lower premium per impression • Selectively draft College Baseball players • Find pockets of inventory that we know rather than High School Players – stable from historical data will deliver high-quality statistics click-based audience at low cost • Buying High School Players, look for • Buy previously unseen media based on commonalities with the background of commonality with seen media that performs mature players who now have good well against our new target metrics “different metrics” 12
  • 31. MONEYADS THE STRATEGY Baseball Digital Advertising We might want to buy runs, but we benefit We want to drive consumer action, but we can from players who get on base benefit by growing our remarketable audience • Purchase Established Players based on • Target campaigns to optimize audience different metrics – OBP vs. HR acquisition rather than actions, which demands a lower premium per impression • Selectively draft College Baseball players • Find pockets of inventory that we know rather than High School Players – stable from historical data will deliver high-quality statistics click-based audience at low cost • Buying High School Players, look for • Buy previously unseen media based on commonalities with the background of commonality with seen media that performs mature players who now have good well against our new target metrics “different metrics” 12
  • 32. MONEYADS THE STRATEGY Baseball Digital Advertising We might want to buy runs, but we benefit We want to drive consumer action, but we can from players who get on base benefit by growing our remarketable audience • Purchase Established Players based on • Target campaigns to optimize audience different metrics – OBP vs. HR acquisition rather than actions, which demands a lower premium per impression • Selectively draft College Baseball players • Find pockets of inventory that we know rather than High School Players – stable from historical data will deliver high-quality statistics click-based audience at low cost • Buying High School Players, look for • Buy previously unseen media based on commonalities with the background of commonality with seen media that performs mature players who now have good well against our new target metrics “different metrics” 12
  • 33. MONEYADS THE STRATEGY Baseball Digital Advertising We might want to buy runs, but we benefit We want to drive consumer action, but we can from players who get on base benefit by growing our remarketable audience • Purchase Established Players based on • Target campaigns to optimize audience different metrics – OBP vs. HR acquisition rather than actions, which demands a lower premium per impression • Selectively draft College Baseball players • Find pockets of inventory that we know rather than High School Players – stable from historical data will deliver high-quality statistics click-based audience at low cost • Buying High School Players, look for • Buy previously unseen media based on commonalities with the background of commonality with seen media that performs mature players who now have good well against our new target metrics “different metrics” 12
  • 34. THE “EFFICIENT FRONTIER” DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA Delivery=Spend/Budget 1.5 1.1 0.8 0.4 $1.60 $1.30 $1.00 $0.80 0 $0.60 $0.40 CPC Bid($) $0.20 $0.00 2nd Price Auction Model Google KW CPC Delivery 13
  • 35. THE “EFFICIENT FRONTIER” DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA Delivery=Spend/Budget 1.5 1.1 0.8 0.4 $1.60 $1.30 $1.00 $0.80 0 $0.60 $0.40 CPC Bid($) $0.20 $0.00 2nd Price Auction Model Google KW CPC Delivery 13
  • 36. THE “EFFICIENT FRONTIER” DISPLAY ADVERTISING - DELIVERY - WINNING MEDIA Delivery=Spend/Budget 1.5 1.1 0.8 Diminishing Returns 0.4 $1.60 $1.30 $1.00 $0.80 0 $0.60 $0.40 CPC Bid($) $0.20 $0.00 2nd Price Auction Model Google KW CPC Delivery 13
  • 37. THE EFFICIENT FRONTIER DISPLAY ADVERTISING - PERFORMANCE 4.00 1/CPA Perf 3.00 2.00 1.00 $5.50$6.00 $4.50$5.00 $3.00 $3.50 $4.00 0 $2.00 $2.50 $1.50 $1.00 Bid, CPC ($) $0.50 $0.00 14
  • 38. THE EFFICIENT FRONTIER DISPLAY ADVERTISING - PERFORMANCE 4.00 1/CPA Perf At low bids, we 3.00 win low quality impressions that have low CTR and 2.00 convert poorly 1.00 $5.50$6.00 $4.50$5.00 $3.00 $3.50 $4.00 0 $2.00 $2.50 $1.50 $1.00 Bid, CPC ($) $0.50 $0.00 14
  • 39. THE EFFICIENT FRONTIER DISPLAY ADVERTISING - PERFORMANCE At high bids, we buy premium 4.00 impressions that result in high CPC and CPA 1/CPA Perf At low bids, we 3.00 win low quality impressions that have low CTR and 2.00 convert poorly 1.00 $5.50$6.00 $4.50$5.00 $3.00 $3.50 $4.00 0 $2.00 $2.50 $1.50 $1.00 Bid, CPC ($) $0.50 $0.00 14
  • 40. THE EFFICIENT FRONTIER DISPLAY ADVERTISING - PERFORMANCE At high bids, we buy premium 4.00 impressions that result in high CPC and CPA 1/CPA Perf At low bids, we 3.00 win low quality impressions that have low CTR and 2.00 convert poorly 1.00 $5.50$6.00 $4.50$5.00 $3.00 $3.50 $4.00 0 $2.00 $2.50 $1.50 $1.00 Bid, CPC ($) $0.50 $0.00 14
  • 41. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA 15
  • 42. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run 15
  • 43. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run 15
  • 44. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run • This allows us to identify optimal combinations of media sources, budgets to apply and bidding delivery and performance curves 15
  • 45. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run • This allows us to identify optimal combinations of media sources, budgets to apply and bidding delivery and performance curves 15
  • 46. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run • This allows us to identify optimal combinations of media sources, budgets to apply and bidding delivery and performance curves • At each node of the tree we have both spend, initial bid, delivery and performance models 15
  • 47. EFFICIENT FRONTIER FINDING POCKETS OF HIGH PERFORMANCE EVEN IN UNSEEN MEDIA • We use predictive models to discover statistically similar media to media not previously run • This allows us to identify optimal combinations of media sources, budgets to apply and bidding delivery and performance curves • At each node of the tree we have both spend, initial bid, delivery and performance models 15
  • 48. EXAMPLE ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.50 $300.00 $276.45 1.13 $225.00 Delivery=Spend/Budget $165.98 CPA($) 0.75 Commonality-Based $150.00 Intelligent Initial Bid $127.89 (Bid=$2.20) $69.15 0.38 $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 49. EXAMPLE Delivery=Spend/Budget ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.5 1.50 $300.00 $276.45 1.1 1.13 $225.00 Delivery=Spend/Budget 0.8 $165.98 CPA($) 0.75 0.4 Commonality-Based $127.89 $150.00 Intelligent Initial Bid (Bid=$2.20) 0 $69.15 0.38 CPC Bid($) $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 50. EXAMPLE ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.50 $300.00 $276.45 First Bid Optimization (Optimize Delivery Bid=$3.85) 1.13 $225.00 Delivery=Spend/Budget $165.98 CPA($) 0.75 Commonality-Based $150.00 Intelligent Initial Bid $127.89 (Bid=$2.20) $69.15 0.38 $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 51. EXAMPLE ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.50 $300.00 $276.45 First Bid Optimization (Optimize Delivery Bid=$3.85) 1.13 $225.00 Delivery=Spend/Budget $165.98 CPA($) 0.75 Commonality-Based $150.00 Intelligent Initial Bid $127.89 (Bid=$2.20) $69.15 0.38 $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 52. EXAMPLE Delivery=Spend/Budget ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.5 1.50 $300.00 $276.45 1.1 First Bid Optimization (Optimize Delivery Bid=$3.85) 1.13 $225.00 Delivery=Spend/Budget 0.8 $165.98 CPA($) 0.75 0.4 Commonality-Based $127.89 $150.00 Intelligent Initial Bid (Bid=$2.20) 0 $69.15 0.38 CPC Bid($) $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 53. EXAMPLE 6.00 ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1/CPA Perf 1.50 4.50 $300.00 $276.45 First Bid Optimization (Optimize Delivery Bid=$3.85) 1.13 $225.00 Delivery=Spend/Budget 3.00 $165.98 CPA($) 0.75 Commonality-Based $150.00 1.50 $127.89 Intelligent Initial Bid (Bid=$2.20) $69.15 0.38 0 $75.00 Bid, CPC ($) 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 54. EXAMPLE ADVERTISING EMPLOYING THE STRATEGIES • These models are estimated dynamically and used to learn quickly 1.50 $300.00 $276.45 First Bid Optimization Second Bid Optimization (Optimize Delivery Bid=$3.85) (Optimize Performance 1.13 /Delivery Trade-Off, Bid=$2.00) $225.00 Delivery=Spend/Budget $165.98 CPA($) 0.75 Commonality-Based $150.00 Intelligent Initial Bid $127.89 (Bid=$2.20) $69.15 0.38 $75.00 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 Data Points Delivery CPA 16
  • 55. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING 17
  • 56. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! 17
  • 57. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! • Get on base! 7 ways! 17
  • 58. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! • Get on base! • Batter Up! 17
  • 59. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! • Get on base! • Batter Up! • Get on base! 17
  • 60. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! • Get on base! • Batter Up! • Get on base! • Get the Slugger up!!... 17
  • 61. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Batter Up! • Get on base! • Batter Up! • Get on base! • Get the Slugger up!!... • ...and run them in! !!! 17
  • 62. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING 18
  • 63. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING 18
  • 64. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience 18
  • 65. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation Many ways! • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer 18
  • 66. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments • Social Media and Search 18
  • 67. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments • Social Media and Search • Retarget! 18
  • 68. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments !!! • Social Media and Search • Retarget! • ..and convert the audience! 18
  • 69. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments • Social Media and Search • Retarget! • ..and convert the audience! 19
  • 70. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING • Construct the media plan... • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- generation • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments • Social Media and Search • Retarget! • ..and convert the audience! 19
  • 71. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING Conventional Approach • Construct the media plan... Targeted Campaign • ...to efficiently acquire retargetable audience • Keyword Campaigns - optimized for click- Impressions generation Driving traffic through to one-time conversion. • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer Treat first-time and returning visitors the same • Look-a-like Users/Behavioral Segments Clicks • Social Media and Search • Retarget! • ..and convert the audience! Actions 19
  • 72. MONEYADS FROM BASEBALL TO DISPLAY ADVERTISING MoneyAds Approach • Construct the media plan... Broad Audience Acquisition Followed by • ...to efficiently acquire retargetable Retargeting audience • Keyword Campaigns - optimized for click- Driving Traffic -> Building Impressions generation Retargeting Pool • Site Targeted Campaigns - targeted to placements optimized to get clicks for advertiszer • Look-a-like Users/Behavioral Segments Retargeting established cookie pool, with message contextualized Clicks/Cookies • Social Media and Search to previous site visits, to drive conversion • Retarget! • ..and convert the audience! Actions 19
  • 73. EXAMPLE CONVENTIONAL APPROACH Site Content Impressions Retargeting Campaign on Campaign current cookie pool eCPM: $1.50 eCPC: $1.09 Clicks eCPA: $184.92 eCPM: $2.92 eCPC: $2.36 eCPA: $73.02 Actions 20
  • 75. EXAMPLE MONEYADS APPROACH Audience Acquisition Campaign Impressions eCPM: $1.50 eCPC: $1.09 Retargeting campaign on Clicks/Cookies expanded cookie pool eCPM: $2.92 eCPC: $2.36 eCPA: $73.02 Actions Conversion Rate: 3.23% 21
  • 76. EXAMPLE MONEYADS APPROACH Audience Acquisition Campaign Impressions Overall Performance eCPM: $1.50 eCPC: $1.09 Retargeting campaign on CPCacquisition + CPCretargeting Clicks/Cookies eCPA = expanded cookie pool Retargeting Conversion Rate eCPM: $2.92 = $106.95 eCPC: $2.36 eCPA: $73.02 Actions Conversion Rate: 3.23% 21
  • 77. TAKEAWAYS 22
  • 78. TAKEAWAYS 22
  • 79. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 22
  • 80. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 22
  • 81. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 2 - Be measured about what you buy - buy college rather than high-school players. 22
  • 82. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 2 - Be measured about what you buy - buy college rather than high-school players. 22
  • 83. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 2 - Be measured about what you buy - buy college rather than high-school players. 3 - Diversify your talent - not everyone can afford to buy A-Rod! 22
  • 84. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 2 - Be measured about what you buy - buy college rather than high-school players. 3 - Diversify your talent - not everyone can afford to buy A-Rod! 22
  • 85. TAKEAWAYS 1 - Focus on metrics that count towards a more balanced view of marketing success - value all the methods for getting on base. 2 - Be measured about what you buy - buy college rather than high-school players. 3 - Diversify your talent - not everyone can afford to buy A-Rod! 4 - You don’t need to spend a lot to be successful - use focused strategies and robust data. 22