How to optimize RTB campaigns

In fact it’s been here for a long time

RTB is quite often perceived as UFO with different principles

We analyzed media plans of 6 from 20 biggest online spenders and this is what we saw

We analyzed media plans of 6 from 20 biggest online spenders and this is what we saw

It seems that clients do fully understand RTB (programmatic)

But what we get when we define RTB as UFO?

But this is not only methodical difference, it is a reality Programmatic from buy side Programmatic from sell side

then we have strong market imbalance

When we have in

ADWORDS SKLIK

eTARGET other DSPs

Doubleclick AdX RUBICON PUBMATIC ADMETA

APPNEXUS iBILLBOARD many others

ADWORDS SKLIK eTARGET 1.43 billion Kč

other DSPs and in 0.05 billion Kč

What happens in a situation of imbalance on market where every impression is auctioned?

Content network "RTB"

optimistic pessimistic optimistic pessimistic

Estimated spend 1 430 000 000 Kč 1 130 000 000 Kč 70 000 000 Kč 50 000 000 Kč

Estimated impressions 8 339 029 763 14 480 352 594 13 605 815 484 24 605 815 484

CPT 171 Kč 78 Kč 5 Kč 2 Kč

avg. CTR 1,7% 1,7% 0,2% 0,2%

CPC 10,09 Kč 4,59 Kč

What typically publisher (supplier) things is a right approach to solve low demand?

Single utmost reason for programmatic Programmatic gives possibility to target individual impressions

Non-programmatic Programmatic

There is a fundamental problem in perception of RTB

Adwords is RTB

Adwords is subset of RTB and this is subset of programmatic

Programmatic

RTB

Adwords

Adsense? Doubleclick!

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What we mean by

Exchange•  Adwords•  Sklik•  Etarget•  …

Ad Network•  Adactive•  Impression Media•  Spirit Media•  …

SSP•  Rubicon•  Admeta•  Doubleclick AdX•  Pubmatic•  …

Maybe this is a reason why programmatic market is not clear

Doubleclick AdX Sklik Etarget SSP Ad Network Programmatic score

Seznam HP x x x x x 0

Youtube.com √ x x x x 1

Rajce.net x √ √ √ x 3

Centrum.cz √ x √ √ x 3

Novinky.cz x √ x √ x 2

Bazos.cz √ x x x x 1

Heureka.cz √ x x x x 1

Blesk.cz x x √ √ x 2

Nova.cz √ √ x x x 2

CSFD.cz √ x x √ √ 3

iPrima.cz √ √ x √ x 3

Display impressions by network

September 2014

Estimated split of whole Czech programmatic market

September 2014

Estimated size of programmatic formats

September 2014

Mobile programmatic market is quite different

September 2014

As well as video

September 2014

Programmatic buying has three key pillars

Let’s focus on details of these pillars

Buying algorithm optimization

Buying algorithm optimization

Buying algorithm optimization Data Quality Inventory Quality

Buying algorithm optimization

Role of core DSP technology

Optimizing assignment for DSP

Targeted CPC – what possibilities DSP has to achieve particular CPC when we pay for CPM

How big budget do we need for optimized CPC (same applies to CPA)

Simple math on algorithmic optimization Expectation (campaign goal) 12 Kč CPC

CPM = 1000 x CTR x CPC

Basic CTR 0.15%

Maximum allowable bid 18 Kč CPM

20% improvement = (basic CTR – optimized CTR) /optimized CTR

Optimized CTR 0.18%

Maximum allowable bid 25.2 Kč CPM

Basic Impressions with 0.15% 538664 impressions = 807 clicks

Optimized Impressions 0.18% 574066 impressions = 1207 clicks

Minimum impressions for 95% confidence interval107732 for 18 Kč CPM114813 for 25.2 Kč CPM

Minimum budget for 95% confidence about 20% CTR improvement 4832 Kč

Standard errorCPC = CPM / (1000 x CTR)

0.012%CPC between 18 Kč – 12 Kč

Minimum impressions for 99% confidence interval269332 for 18 Kč CPM287033 for 25.2 Kč CPM

Minimum budget for 99% confidence about 20% CTR improvement 12081 Kč

Standard errorCPC = CPM / (1000 x CTR)

0.007%CPC between 15 Kč – 12 Kč

To have 95% confidence that with target of 12 Kč per click and default click rate 0.15% we can safely try to improve click rate by 20% and therefore risk actual click

somewhere between 18-12 Kč we need to invest 4832 Kč

Simple math on algorithmic optimization

Now what parameters which DSP has under control influence click rate (independent variable)

DSP degrees of freedom

Targeted inventory (actual sites, placements)

Bid (maximum, minimum, variable)

Chosen creative

Geography of user

User attributes*

Frequency

Day and time

System parameters (Device, OS, browser)

Connection speed

ISP

Simplified math for our particular example = 3 parameters (geography + daytime + creative) with 3 attributes (Prague vs Brno, Morning vs Evening, Creative versions) = testing budget = 3x3x4832 = 43.488 Kč

Small remark Archetype view on media market

If you are on demand side you better look like this

Or be really intelligent. Ideally

both

While ideal look on supply side is this

Or being really intelligent. Ideally

both

RTB = CPM? Or CPC? Or CPA?

Bigger is the base CPC and click rate more expensive is to buy on CPC base

For example in case of 0.5% CTR CPM price of 15 Kč CPC buy is 400% more expensive than opposite version of 15 Kč CPM buy.

Doesn't it make more sense to buy everything on CPC base?

Well it depends... “ ”

PPC is arbitrage of impressions

Controlling maximum CPM? Yes. But only separately.

Why it matters to control maximum CPM.

URL CTR eCPM

www.mimibazar.cz/novy_detail_inzertni_fotografie.php 0.38% 14.66 Kč CPM

www.mimiaukce.cz/novy_detail.php 1.77% 37.90 Kč CPM

pizap.com/pizap-app.php 15.15% 888.50 Kč CPM

www.gamesgames.com/game/klondike-the-lost-expedition 7.22% 407.80 Kč CPM

ef4c9354242589b3.anonymous.google 2.62% 160.70 Kč CPM

memfun.cz/create 50% 3211.47 Kč CPM

memfun.cz 2.39% 119.32 Kč CPM

Would we get that stellar campaign performance with maximum CPM set? Really memfun.cz/creator attract 50% of audience to our campaign?

ads or fun?

My idea is picture full screen and “ads or fun” on top of it

Decision influencing information flowing to bidder

User data including unique ID of user known to DSP, site info,

device info, placement data,

bid floor

Capabilities of adwords, sklik, etarget, “RTB” Adwords Sklik eTarget “RTB”

Formats

text + IAB hlavní + dynamické inzeráty + engagement ads + video inzeráty

text + podmnožina IAB hlavní Podmnožina IAB hlavní

Podle rozhodnutí media (libovolný)

Buying modelsCPC, CPM, CPA, visibility, true view CPC CPC

Nativně: CPMDSP modely: CPA, CPC, visibility,

Targeting

Google zájmyGoogle contextLook-a-like1st party

1st partyKontext

1st partyKontext

1st partyPublisher dataBehaviorálníIn-market

Networks Doubleclick AdX Sklik eTarget + SSP Libovolný SSP zdroj

DSP vs. trading desk vs. retargetter vs. ad exchange

DSP Doubleclick Bid Manager, MediaMath, Appnexus

Gives full transparency in buying

TD Sociomantic, DataXu, Xaxis, Criteo

Gives limited transparency in buying, can apply arbitrage

“Retargetter” PerfectAudience,AdRoll

Focused on 1st party data targeting, usually does part of the buying through 3rd bidder

Ad Exchange Sklik,Adwords,eTarget

Allows buying on it’s own inventory only

How does DSP differ from adserver?

A lot of this could be your programmatic infrastructure

Inventory Quality

Definition of quality, private marketplaces

Default maximum CPC 10 Kč

Final CTR: 0.14%

Average final CPC: 5.8 Kč

An example of Adwords campaign

Targeting - interests Categories: Home and garden, Construction and structure, Agriculture and forestry, Doors and windows, Gardening

Main source of clicks in interests: “Home and garden” URL CTR eCPM

www.mimibazar.cz/novy_detail_inzertni_fotografie.php 0.38% 14.66 Kč CPM

www.mimiaukce.cz/novy_detail.php 1.77% 37.90 Kč CPM

pizap.com/pizap-app.php 15.15% 888.50 Kč CPM

www.gamesgames.com/game/klondike-the-lost-expedition 7.22% 407.80 Kč CPM

ef4c9354242589b3.anonymous.google 2.62% 160.70 Kč CPM

memfun.cz/create 50% 3211.47 Kč CPM

memfun.cz 2.39% 119.32 Kč CPM

Main source of clicks in context for keywords: “Adidas, Asics, Nike, McKinley”

URL CTR eCPM

www.mimibazar.cz/nove_fotografie.php 0.02% 1.60 Kč CPM

www.mimibazar.cz/foto.php 0.09% 6.14 Kč CPM

www.mimiaukce.cz/nova_aukce.php 8.16% 366.04 Kč CPM

www.stardoll.com/cs/user 0.15% 6.63 Kč CPM

http://www.kaloricketabulky.cz/susene-svestky 100% 7380.00 Kč CPM

Sklik – main source of clicks in remarketing Site CTR eCPM

Novinky.cz 0.18% 10.69 Kč CPM

Nova.cz 0.19% 10.79 Kč CPM

Prozeny.cz 0.46% 26.27 Kč CPM

Blesk.cz 0.23% 13.39 Kč CPM

Idnes.cz 0.23% 13.57 Kč CPM

Super.cz 0.02% 1.20 Kč CPM

iPrima.cz 0.15% 8.00 Kč CPM

Data Quality

DMPs, providers

Data sources

Buying platform packaged data

(visibility, arbitrage,

demographics)

Buying platform native data

Platform integrated data (data exchange deal as source -

DMP)

Publisher packaged data (private deals)

Czech programmatic marketplace - data Context (Doubleclick Bid Manager native, Appnexus-third-party Grapeshot, CPEX-third-party Demdex, sklik- nativní, Adwords-native)

Visibility (external – DBM pre-negotiated, others e.g. Peer39)

Behavioural (BlueKai, Exelate, Eyeota, HiFive)

Weather (TVTY)

Brand Safety (DBM native, Integral Ad Science, DoubleVerify, Grapeshot)

Synchro TV (Xaxis Sync, TVTY)

Example of typical costs of data Seznam behavioural - +20% to basis CPM (= cca 2-30 Kč CPM)

CPEx Audience packaged data – 1.9 USD including media space, costs of data unknown (= 41.50

Kč CPM)

Grapeshot semantic context data – 0.12 EUR CPM (= 3.4 Kč CPM)

Adwords behavioral, interests, context – part of CPC arbitrage – price unknown

BlueKai interests – 0.32 USD CPM (= 7 Kč CPM)

Eyeota bizographics – 1.20 USD CPM (= 26 Kč CPM)

DBM Demographics – free inside platform

…

Control your inventory, data and optimization and make you campaigns fly

Feel free to download this presentation at http://www.programmatic.cz/rtb_explained/