As pandemic-related shifts in media buying behaviour squeeze brands’ revenue, advertising ROI is more critical than ever. That said, before corona, marketers have often neglected to take basic measures to strengthen their campaign investments and haven’t comprehensively audited their supply path in some time.
Achieving better results takes continued attention to details like exchanges and resellers – the pathways that impact performance and drive revenue. It’s no longer enough for marketers to check only the average performance across a mix of inventory; if they de-average across exchanges and reseller paths, then new areas for performance start to emerge.
Here are 5 steps that marketers can take to ensure ad spend generates maximum revenue:
Pull Performance data by exchange in the DSP
Media buyers need to analyse performance on an exchange-by-exchange basis to understand how to optimise at the exchange level. DSPs don’t tend to optimise by exchange since banner performance doesn’t vary by it, but this is a powerful step that can be taken manually.
Looking at a typical campaign result set, we see that the volume of spend doesn’t often go to the best performing exchanges, but rather as much as 60% of display allocation heads to environments with lower-performing click-through-rates. In many campaigns, only 8-10% of spend goes to exchanges with click-through-rates higher than 0.6% (Google has a click-through-rate just above 0.1%). Contrary wise, an exchange overperforming at nearly 1% CTR might be getting the lowest allocation of the overall display spend.
Marketers often miss these outcomes as they are not paying close enough attention to how their exchanges have been performing.
Run Small Tests
When ad buyers are stuck with old or insufficient data from previous campaigns, or when there are concerns that existing data won’t be applicable, it’s a good idea to run small-spend, broadly targeted tests to understand performance by exchange. The most effective method is to run tests for the creative format that the buyer plans on using in their campaigns and on the site list, (if there is one), that their campaigns will be placed. During these tests, it’s best to leave exchange targeting open. Whether running a PSA or a potential or past creative asset, a R10 000 buy will yield enough data for an effective first test. Once completed, return to the first step above to look at the results.
Path optimise at the exchange level
Once ad buyers have assessed performance by exchange, they can use the data to think further about what to do with their spend.
An effective option is simply to shut off the worst-performing exchanges, particularly if they aren’t critical to the advertiser’s ability to scale. Another option is that ad buyers can identify some of their larger but poorer-performing exchanges, not turn them off entirely, but rather deliver more budget to higher-performing exchanges. The techniques for this option vary by DSP, with some options like The Trade Desk offering a way to prioritise spend to some exchanges but still spill over to others if needed for scale. Here’s how to do it in The Trade Desk, DV360 and Xandr.
Be smart about resellers
When ad buyers assess performance by exchange, their data will bundle both resale and direct relationships with those exchanges. Ad buyers can let the overall performance serve as a guide and not worry about the downstream path from the exchange. That said, they may have an opportunity to increase the performance of the exchange by looking beyond the first hop, but this isn’t easy to do with most DSPs.
On the exchanges that ad buyers intend to allocate the bulk of their budget, it is worthwhile to ask DSPs, or the exchange itself, to provide information about performance, divided by direct pubs and each reseller. If some paths have poor performance, ask the exchange to remove those from the PMP that the ad buyer intends to spend on, or speak to the DSP about disabling those paths.
After determining which supply sources are performing best, it’s wise to set up a direct buying relationship with those exchanges via a PMP. There are many approaches to buying on a PMP, so buying through ones that seem similar from multiple supply sources is likely the right avenue.
Direct ad buyers often see dramatic increases in their CTRs, sometimes as much as 100% with steep declines in cost-per-click as compared to open exchange buys.
Advertisers have no margin for error. Never have we been faced with a more precarious moment. Revenue streams are shrinking, and even many successful brands are narrowly clinging to profitability, yet the vast majority of advertisers are leaving money on the table, neglecting to take these simple steps towards achieving their maximum ROI. These small steps can mean the difference between success and failure.
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