Why do programmatic ads suck, yet we still need to keep them running

Auction-based display ads, or the so-called ‘programmatic ads’, as fancy as it may look to your marketing eyes, does it give you equally fancy ROIs too??

Confession:

The way ‘programmatic ads’ sounded, in my mind, I was already riding a fancy positive ROI machine! This one-of-a-kind machine learning was going to script the awesome destiny of my marketing budget until results came out and all I could see was flames and ashes.

I mean, it's not that bad, but I swear I am not being dramatic.?

The most popular example of programmatic ads are those banners you encounter while reading a blog post/article or it can even be seen while playing a mobile game.?

source: imgix.net

Now, the problem with this kind of advertising is that it can be a hit and miss. We all see these kinds of ads, but how often do we click them? Maybe 3/10 times??

We see it. Ignore. And move on.

That's where the problem is sitting.

Does that mean the budget got wasted 7/10 times when we did not click?

The debate here is, although you did not click the ad 7/10 times, the display ad did something to you. Marketers like to call this effect, ‘brand recall’. You saw the ad, it made you aware of the brand, and there are chances it will affect your future purchase decision when you see the same brand.

Now we live in a world where this makes sense yet gets confusing, because this same marketing world comes up with stats every quarter that an average person looks at 10+ ads each day and brand recall seems to be hanging on a very thin line (Unless your ad is exceptiooooooonally creative or backed by those massive budgets of Nike, Unilever, Apple and more).?

Ok, let's keep this brand recall discussion for another day and focus back on our question - did the marketing budget get wasted 7/10 times?

What if, for those 7/10 times when you saw that ad, for once you thought let's explore the product and see if I am interested, but forgot to do so because your cat spilled water all over your keyboard.?

Now a day later, with your dried-up keyboard and a malfunctional spacebar, you notice this ad on Facebook, have a eureka moment of rediscovery, and hit the buy button.?

What happened here? On analytics, conversion seems to be recorded as ‘Facebook’’ while in reality, you saw how much display ads were hustling for this achievement.

I agree this is one of those exaggerated rare events but a lot of similar events happen every now and then around display ads. You see a display ad, but take action by searching for a discount coupon for it on google search. Or, even better, you saw the display ad but it triggered you to buy when a colleague at work mentioned how awesome the product is, and that motivated you to directly go on the website and make a purchase.?

This is what puts performance marketers under a dilemma, you feel the pain display ads are going through, but your CEO wants to see the so-called ‘ROI’.?

Enter, post-view attribution.

Imagine if there was a way by which you can keep a count of people who saw the ad, did not take any action at that moment but purchased the product from a different source (google search, facebook, etc).?

That's exactly where post-view attribution helps.

As the name goes, it's for conversions that happen ‘post-view' i.e after someone has viewed the ad but took a purchase action later.

So now, conversion numbers look like this -?

Total conversions = Post click + Post view

Post click is the number of people who clicked the ad and converted?

Post view is the number of people who viewed the ad and then converted later from a different source

In order to implement post view attribution, you need to add a tracking code on your website. Each ad network has its own way of doing it so you need to go through their documentation (its mostly in their help section).

Also some ad networks refer to post view attribution as view-through, so keep that in mind as well.

Now, it might look like the conversion numbers get better, you have more leads and more $$$ to showcase for display ads but?

Even though it looks like the problem is solved, a bit of work is still remaining. You will encounter the below problems once you move ahead.

1. How much % of credit does display ads deserve for the post-view conversion?

This is something which varies from team to team, company to company. There is no right or wrong answer, all there is, is, guesstimation. You might use 20% to 30% as a ballpark figure to calculate how much order value you got from post view.?

Total order value = order value from post-click conv + 30% of order value from post-view conv

* If you are wondering why are we using a low number like 20%, its because there are so many factors due to which a conversion can be counted as post view, for example, banner blindness, wrongly counting impressions and many more (google search them out). Thus to be on the safer side, 20%-30% sounds like a reasonable choice.

2. How to optimise campaigns keeping post-view conversions in mind?

The rough guideline around this issue is -

For CPA based goal push more towards post click conversions

For CPM based goals push more towards post view

We will touch on the optimization part in the next post, let's keep this once simple :)?

Thanks for reading.