By: Cortland J. Fondon
Programmatic advertising dramatically improves the ability to accurately measure conversion rates because it allows businesses to assess each unique impression, clicks and brand life metrics in real time. In addition, it is much easier to establish clearer campaign goals because programmatic permits in-process optimization that promotes the best possible outcomes at minimal costs. By targeting the right consumers at the best time, delivering compelling, creative messages and optimizing advertising strategies based on “learning” algorithms, programmatic advertising is expected to supersede all other forms of advertising within the next decade.
Using Conversion/Sales Rates to Evaluate Programmatic Campaigns
Both non-converting and converting consumers who engage with programmatic algorithms are included in measuring what could be called “big data”. When tens of thousands of “clicks and buys” and “dead-end clicks” are collected over a predetermined amount of time, this “big data” is automatically fed into a marketing attribution system. Once processed, it is then distributed into a conformable pattern containing key performance metrics that are analyzed through an attribution modeling process. This process identifies cross-tactic, cross-campaign and multi-channel influences. Emerging from this data is a concisely deciphered set of measurements that considers intra-network influences for determining a company’s marketing success via fractional credit, which has now been dispersed across media buys that genuinely promoted that success.
Clarification of Conversion Rates
For example, if a company’s certain display produces quantitative performance data that reveals it is generating 200 conversions at a cost of $20 per CPA (cost per action) and $10 is regarded as the maximum acceptable cost per action, running this same data through an attribution process (combining information culled from all sources) may show the company that the buy actually generated 500 conversions at $3 CPA. With the ability to recalculate attributed metrics instead of relying on standard, black-and-white style conversion rates, companies using programmatic advertising will reap the benefits of funneling more of their budget to funding a lucrative campaign instead of discontinuing spending because of an inaccurately assessed CPA.
Taking Small Bites of Big Data
Programmatic offers attribution solutions that are less cumbersome than traditional methods of dissecting “big data” for determining conversion rates. After being filtered, information is algorithmically compared to behavioral and demographic information supported by data management systems. It is then matched to unidentified compilations of cookie data, which enables programmatic attribution abilities to re-evaluate the impact of all media strategies on the performance of consumer segments defined by a brand. As the continuous cycling of attributed metrics are transmitted in real-time to the original programmatic purchasing platforms, behavior and demographic-specific media purchases remain informed to evolve and optimize conversion rates.
When Should Campaigns Be Measured?
Measurable results generated by programmatic campaigns may be skewed if they are not measured at the appropriate time. Because the artificial intelligence behind programmatic requires time to assimilate and apply the large amounts of information it is being fed, companies should allow a “learning period” to elapse before performing evaluations. Factors influencing the allotment of time for the programmatic algorithm to “learn” depends on impression numbers, response rates and knowledge of demographic data. Companies should expect results generated during this period as weak compared to the strongly positive conversion seen in sufficiently matured programmatic campaigns.