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How can I drive better performance of my Online Advertising platform?

January 1, 2012 Leave a comment

Many search engines with a platform to place search advertisements dabble with this question. But as you can see, this question is very open ended and in order to be able to answer it clearly, it is very important to understand the component questions. Addressing each of them will ensure a better business performance.  In an ideal scenario, we would know every customer’s goals completely to such an extent that we can fine-tune each and every advertising campaign. But this Utopia doesn’t exist. Even if we knew an advertiser completely, it is highly impossible to address every advertising campaign on the system. The most analytical way to proceed with this problem is to look at it from a general standpoint and determine general and automated solutions that can in the long-term lead to higher revenues for the platform as well as achieving the goals of the customer. So, the question now becomes – “What are the factors I need to consider before embarking on such an initiative?”

There are 3 aspects to this question

1. Demand – This part is very obvious.Demand in the online paid search industry basically refers to advertisers. The users of the search engine form the supply. There are two dimensions to demand – quantity and quality. Quantity can be influenced positively by promoting the search engine and also by having a good amount and quality of supply.This is a task for the marketing wing of the organization. Any features that the platform offers advertisers will go a long way in influencing the advertisers positively. Influencing quality of demand is a harder task and requires  a rigorous analytical set up. Many companies don’t even have an analytical wing and it becomes the responsibility of 3rd Party analytical service providers to show value. It is imperative to understand the various aspects to a PPC(pay per click) model that need to be looked into and optimized to ensure that an advertiser performs to his best capacity. Let us discuss a few ideas in this section –

  • Seasonality – There is undoubtedly seasonality in user searches. Searches related to certain industries spike at some times during a financial year. Various reports can be designed to assess the extent of this seasonality. These reports should be able to tell you which segment of keywords show an increase in searches, so that keyword recommendations can be made to advertisers. Business will also do well to understand bidding patterns during these seasonal time periods. An advertiser showing impressions for a keyword may stop showing impressions because of an increase in competition on seasonal terms. The business should be able to identify which advertisers are getting impacted due to competition and make bid suggestions to them for these seasonal keywords. Advertisers should be given the flexibility to set variable bids based on the season
  • Ad Quality – Ad Quality is very important in influencing a customer to click on it. Ad quality can be determined on multiple factors such as the text, the ad position and the quality of the landing page URL. It is also important that the ad be directly related to the query that is causing the impression. If not, the system can get flooded by a lot of low quality ads and the credibility of the online advertising platform will be lost. This can do massive damage to the popularity of the platform. Terms like CTR (Click Through Rate = Clicks/Impressions) is a reliable measure of ad-quality.
  • Advertiser Intent – Any advertiser wishing to advertise on an online platform will have to create an account and adjust settings to match his intent. Settings could be things like picking keywords to bid on, selecting targeted users, selecting geographical locations to display ads in, etc. Many advertisers are not sophisticated to understand how to make these changes to settings in the platform and hence end up creating campaigns which actually do something very different from the advertiser’s intent. If the business could recognize such advertisers, it could give them a demo of the tool and show them how to use it. This will help in building advertiser relationships as well as improve the platform as a whole. The benefit is mutual. It helps advertisers to achieve their goals more effectively and the search engine becomes more relevant.

To keep it simple, I have mentioned only a few dimensions above. For learning more, please get in touch with me at biznessanalyst@gmail.com

2. Supply – Supply is mainly driven by the quality and credibility of the search engine. It doesn’t take a marketing guru to understand why Google and Bing have such a large user base. There is more to supply than just having a large user base. It is also important to understand how they behave while using the search engine. In other words, like demand, supply too has 2 aspects – quantity and quality. It really doesn’t bring a lot of monetary benefits if you have a large base of users who do not click on online advertisements. Industry based distribution of search queries could give a fair idea of user behavior. Below are a few ideas to improve performance on a supply-based approach.

  • Industry Analysis -This analysis mainly involves tying up the number of searches that happen on search terms belonging to certain industries to the number of advertisements available for these searches. Analysts can check to see how many number of ads were displayed on every search. This will help business recognize weather there are enough advertisements. If you see a lot of search pages with very few ads for a particular industry, you now know which field your customer acquisition efforts need to focus on.
  • User Search History – Tracking user searches is highly controversial, but I still feel that this can be done while protecting user privacy. One can look for general patterns and understand the nature of user searches. One good analysis would be to identify search queries that users look for before they get the right result.
  • User segmentation – Segmenting users can be very useful in order to drive targeted advertising. User segmentation can be done using various variables like industry of search, frequency of clicking on ads etc.

3. Platform – Demand and Supply are external factors, but platform is a very important internal factor. I think that it is very necessary to have a very good platform and provide advertisers with as many features as possible that gives them more control over their advertisements. It is also important not to include a plethora of features that are not serving a very important purpose as this could result in information overload and leave the advertiser confused. I recommend building a solid dashboard showing the advertisers how they are performing at various levels of granularity. It could also be interesting for the advertisers to understand how their competitors are performing. The dashboard should also be able to tell the advertisers where they could do better and make recommendations on the fly. This kind of a feature will need a great deal of effort to build but I think it provides a very important value-add and all steps must be taken to put it in place if its already not up and running. Improvements to the dashboard can happen over time but just providing this feature tells the advertisers that you do really care about their business. This will help build good relationships with them. Platform also refers to all the complex algorithms which result in ad delivery starting from the time a user types in a search query. This algorithm is a black box to many advertisers and they may have some apprehensions on the fairness. It is highly important that the algorithm be flawless or else there is bound to be multiple escalations in the near future when advertisers begin to understand the failings of the system.

In this article, I have covered all the factors affecting performance very broadly. In case, you want a more granular approach or want to have a problem solved, please feel free to me at biznessanalyst@gmail.com.

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Optimization of Advertiser Budget

June 22, 2011 Leave a comment

Objective

In this post, I would be discussing a methodology to calculate a publisher’s latent revenue opportunity in the paid search advertising industry. I would mainly be discussing opportunity coming due to inefficient budget allocation of the advertiser.

Data

Spend and Budget data of advertisers on a time scale

Potential Impact :High Revenue Opportunity

Background
In the Online Advertising domain, advertisers may have multiple campaigns running with budget some amount of budget divided among the various campaigns
Latent Revenue Opportunity can be identified due to 2 main reasons
  • Insufficient Overall Budget
  • Sub optimal allocation of budget among the different campaigns
Opportunity Computation
  • Find the time in the month by which the advertiser’s spend exceeded the budget
  • Calculate potential monthly opportunity as what the advertiser would have spent on the campaign if we had infinite budget
  • This can be done by extrapolating spend based on his budget and amount of time it took for his budget to be exhausted
  • Simple Formula that can be used :
                  Opportunity = (Campaign Budget * Total time pending in the month after budget exhaustion)  / Total time taken for Budget exhaustion

Analysis :
If we see that an advertiser’s budget is exhausted across all his ad-campaigns within a month, it should be recommended that he increase his budget across all campaigns. It would ideally be the best to recommend the amount he will need to increase his budget by. This recommendation should be done for every campaign that the advertiser has undertaken. It is easy to compute this campaign-wise number. The advertiser’s average rate of spend can be computed based on the time it took for his budget to get exhausted across each of his campaigns. Once a campaign’s rate of spend is known, the advertiser’s spend for 1 month can be predicted by extrapolation. We would now have the ballpark spend number of every ad-campaign for a month. We would now also know to which campaigns, he has  allocated excess budget. These numbers can be taken to the advertisers by supplementing them with reliable conversion figures in order for the idea to gain traction with them.
If you require any help on such an analysis, please mail me at biznessanalyst@gmail.com

The Online Advertising Industry

May 14, 2011 1 comment

What is the Online Advertising Industry?

With the rise of the internet as an interactive networking medium over the last decade, companies have realized the potential that it has to offer in terms of bringing about awareness about their products. The Online Ad industry has undergone a lot of changes and it has become a good income generating medium for many websites. In fact, the bulk of Google’s income comes through online advertising. Listed below are some of the popular forms of Online Advertisements.

1.  Display Ads – These are the huge flashy banners with pictures that you usually see online. They come in various shapes and sizes and are built to be visually attractive and catch the user’s attention immediately. You do not find such ads on search websites. The ads can be served by the publisher’s ad server. These include banners, leader boards, skyscrapers, large boxes etc.

2. Pop up Ads – These are the ads that open in a separate browser window whenever you click on a link or visit a website.

3 .Text Ads – Whenever you perform a search on Google or Bing, you will observe that apart from your search results, the search engine displays ads relevant to your search. These are the text ads. Most of the revenues of companies like Google and Microsoft (Bing.com) come from Text Ads. There is a highly complex delivery mechanism which ensures that every user sees the right ads and it is very interesting to study it. A lot of analytical work can be done in the area dealing with online text advertising. These ads can be served by the publishers directly.

4. Flash Ads – These are the animated ads that you generally see and they are a reply to pop-up blockers. They can come in a diverse variety of shapes and sizes and can be well integrated with their respective websites

5. Interstitial Ads – Ads that appear during a transition from one page to another. These user generally has to click continue to skip the ad.

6. Video Ads – With the increase in popularity of watching streamed videos on websites like youtube, these ads have become more popular of late.

7. Email Ads – These ads are distributed by the publishers to all recepients by email. The recipient generally opts-in to receive the ads from the publisher.

Though there are a variety of online advertisements, most of the analytics work of late happens on the display and text ads. There are again many ways by which these ads can be delivered

1. Content based delivery – Content based delivery happens when the ads displayed on a webpage are relevant to the content displayed in the page. There are certain algorithms which assess how relevant an ad is to the content displayed and then display the ads. Companies like Google, Yahoo and Microsoft offer such ads

2. Search based delivery – Depending on the search query entered by the user on a search engine, text ads are displayed on the browser. The advertiser usually bids on keywords and based on the presence of the keyword in the search query entered by a user, the ads may be displayed.

The takeaway from this is that online advertising is still in its very nascent phases. There is still a lot of work required to be done in terms of delivering the relevant ads to the user, so that the user, the advertiser and the publisher benefit. Any analyst whose expertise lies in this domain would be in high demand. This said, there is still a lot to be done in this domain with regard to organizing the rich data that is available and reading patterns from it.