The purpose of quick advertising optimization is to find slices of inventory that provide a positive return-on-investment (ROI) for your campaigns. With Exact Drive you can optimize to a Cost per Click (CPC) or Cost per Acquisition (CPA).
The concept of advertising optimization isn’t very complicated: it’s taking past performance and applying it to a future goal, such as cost per click (CPC) or cost per acquisition (CPA). If you’re likely to get a click, spend a lot; if you’re not, spend a little or don’t buy at all.
Even though it appears easy to provide example advertising optimization that way, in practice it can be hard to do. Should we calculate the click through rate for a whole website or a specific section? Does the creative itself make a difference to performance? Does frequency? Recency? Should we break out click through rate by day of the week? Geographic region? Can we bucket groups of similar sites with low volume and still optimize (apply a click through rate) to that? These are just a handful of questions that can be related to advertising optimization.
There’s one more piece to consider, and that’s the “Learning Stage.” Before you can decide how to calculate or optimize click through rates or conversion rates or any other performance metric, you have to get some initial data of some kind. Basically, buying ad impressions to learn on usually has a much lower return on investment (ROI) than buying “optimized” because you are flying relatively blind, so you want to strategize a bit when buying and bidding in the learn stage.
All of this makes advertising optimization more complex than it seems. Good advertising optimization has a lot of “levers” that can be tweaked, and we would like to offer our clients the ability to tweak them using their own intuition and experience in combination with our analytics and reporting system.
Here are some of the types of things you can affect your campaign within the Exact Drive advertising optimization system:
(i) Learn budget: We recommend starting with roughly 20% of your campaign budget if you need a ballpark figure, but you can choose how much to spend on learn.
(ii) Learn bids: We use a specially calculated metric called Estimated Average Price to get started bidding.
(iii) Throttling: We cap bids according to how confident we are in our performance calculations. This means, basically how much data we have to base click through rates and conversion rates on. A good rule of thum is to dial your throttling up or down according to how fast you need or want data.
(iv) Copy or pre-populate Learn: If you have learn data from other sources, we can get you started ahead of the game.
(v) Getting out of Learn: How much data do you need to be confident of performance accuracy? You can trust us or adjust the number of events you need to get out of learn.
(vi) Frequency-Recency Modifier: All bids, learn or optimized, are adjusted via a frequency-recency modifier.
(vii) Projected learn modifier: This can affect how fast you decide to “give up” on certain inventory or get out of learn and into optimized bidding.
(viii) Targeted Inventory: We optimize to groups of objects, such as a creative-campaign-pixel-inventory tag bucket. If you target different inventory types, such as above and below the fold, in different campaigns, you will effectively break out optimization.