How to take advantage of inventory availability in the display market - a quick guide for e-commerce companies

The display market is a complex beast which much like the stock market fluctuates everyday based on an almost equally complex range of elements. Although there are many buying methods for display activity, the currency of the display market is CPM (cost per thousand impressions) and this too fluctuates like the Dollar, Pound, Euro etc. However, whilst the display market is complex, it is yet to reach the heights of complexity of even the most basic stock markets.

With this in mind and with the visibility of the display market that we have at Criteo, we can start to analyse and understand trends within the market that advertisers can capitalise on in order to extract maximum value at any given time.

For the purpose of this article we will look at quarterly trends but the opportunity can present itself at various other times such as end of financial year and in many instances we see the quarterly trends below replicated on a monthly basis for advertisers within specific verticals.

Chasing higher sales volume for the same ROI

Our story begins at the middle of last month of the quarter where competition within the market starts to increase as the CPM on inventory increase. As you can see from the graph below, this competition becomes fierce towards the end of the month with steady increase in price inventory and competition win (the % of impression that can be won to serve an advert) dropping at constant CPC.

At the start of the quarter inventory price “resets” mainly driven by the delay in many clients activating monthly budgets across the market with larger brands slower to take action. Using a constant CPC / CPM, there will be a natural increase in the competiveness of any campaign at the start of the month creating an opportunity to capitalise on access to more volume both in terms of impressions, clicks and sales.

Performance is present

Sales follow clicks that follow impressions - these three actions do not occur at the same time. Consider your own experience as a user when interacting with advertising online and your path to purchase. It may take several adverts to showcase the correct product within the right environment (creative) at the right time for you to engage (click) and then complete the purchase (sale) action. This is “transaction delay” – a delay between engagement and action and is in part why last click attribution is a simplistic model in which to evaluate any marketing activity but that’s a different discussion.

This means that when the volume of impressions increases, it takes time for the increase to be realised into clicks and then sales. Now here’s the really interesting part. The graph below shows the performance of a campaign if we were to allocate the sale directly at the time of the click and as you can see we have relative consistency in ROI with an increase in sales roughly one week after the start of the month. 

Final Comments and Conclusion

1.    Every advertiser has unique opportunities to capitalise on higher volume of sales for the same ROI when inventory is more readily available / less competitive

2.    Return on your investment is not immediate with the “transaction action” occurring after the click.

3.    Sufficient budgets are required to drive consistent ROI goal whilst achieveing maximum sales volume

Alex Baker

Senior Manager – Criteo Australia and South East Asia

Scope: Criteo Australia Retail clients

Index: CTR and CR consistent