Measuring Programmatic Return on Investment

Measuring Programmatic Return on Investment

By: Cortland J. Fondon

Programmatic advertising, which is also commonly referred to as automatic advertising, is a specific brand of online marketing that uses certain events as triggers for automated campaigns. One example of this type of campaign in action would be a programmatic retargeting situation. After a consumer visits a particular website and does not complete a sale, for example, they will begin to see targeted ads on other websites for the content they originally viewed. If the consumer viewed and did not purchase a particular stereo, for example, they may see ads for that stereo on the next six sites that they visit.

One of the most important aspects of this type of advertising to understand involves the ways in which we measure programmatic return on investment. At its most basic concept, a campaign can only be considered a success if you’re making a larger amount of money than you initially put into the campaign to begin with.

Measuring programmatic return on investment is something that can happen in a number of different ways depending on the specific type of campaign that is being executed. To use the example of a shopping cart abandonment campaign, the return on investment could be measured by comparing the amount of money going into the campaign versus the amount of shopping carts that were successfully redeemed. If you know that it costs a certain amount of money to generate automated emails reminding users that they still have items in their shopping carts, for example, you can compare the success rate in that situation and the amount of money those shopping carts were actually worth to determine the overall return on investment.

Another important tool when it comes to measuring programmatic return on investment has to do with a data management platform, also commonly called a DMP. These are software based solutions that provide real time information regarding the types of campaigns that are being executed at any one particular time. All of that data is then fed into a dashboard that is constantly updating, allowing you to see exactly where your money is going and how much money you’re making in return from moment to moment.

One of the major benefits of these data management platforms has to do with key performance indicators, which are typically what drives the types of outcomes that you’re looking for. Key performance indicators give actionable insights regarding identifying trends and making certain predictions as you move farther down the line towards your goal. These KPIs also allow you to identify the “health” of a particular customer relative to the expected outcome.

If an automatic email has been generated reminding a customer about their abandoned shopping cart and the customer still has not returned to the cart after a period of two weeks, for example, they may be in “poor” health. You would then know that you needed to direct more attention towards that particular customer and all others like them in an attempt to increase your programmatic return on investment and to achieve the results that you were after.

 

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