The optimization of an organization’s varied processes enhances its lifespan and ability to survive - especially during harsh times such as the recession we are still recovering from. In fact, it's hard to think of any organizational process that would not benefit from optimization: from saving money on office supplies to maximizing the efficiency of internal systems. 

In the digital advertising world, optimization is being used to improve processes, to enhance the effectiveness of online-advertising campaigns and to increase the margin between the benefit of the campaign and its cost. In most cases the goal is finding a balance between this margin and the quantity (volume) achieved. More often than not the cost is calculated as the price of (effectively) obtaining a client, whereas the benefit is calculated as the income obtained from the same client (net, after selling costs).   

For the most part the goal is maximizing results. This means finding a balance between the desired margin and the volume achieved. It is usually the case, at least in online advertising, that we are willing to give up on some of the return in exchange for a greater volume. As an advertiser, we are willing to pay more to obtain a client if it results in us ultimately converting more customers. A volume discount does not usually work in our industry.

When managing a digital campaign, in order to get results, you must manage the process. Here, as mentioned before, in order to achieve a balance between a satisfactory margin and the desired volume, one has to manage the value chain of the campaign, with the understanding that each component in the chain not only influences the final outcome but also has an effect on every other link in the chain. For example, a creative concept with a high click-through rate will usually lead to a lower conversion rate.  The value chain is combined of and has effect as follows:

·         Promotional offer - directly affects the ability to convert customers while inversely impacting on their value.

·         Creative concept - directly affects the click-through rate while inversely impacting on the conversion rate. 

·         Media - directly affects the click-through rate while inversely impacting on the conversion rate. 

·         Landing - directly influences the conversion rate while inversely impacting on the value of the customers. 

Optimizing the whole value chain requires finding the correct combination of the different components so as to bring about the desired results.

The idea is to try different ingredients and different combinations (multivariate testing). This means trying different marketing proposals, supported by an alternative creative concept, diverse media, appropriate landing pages and varied conversion funnels. 

The optimization process never ends, there are countless possibilities and always a better path to take, and its goals can and should change relative to the goals of the  business and the desire to achieve the initial objectives of the campaign.

Such optimization cannot be done without appropriate technology but technology alone is not enough. Skilled teams are required by both the advertiser and the media company. Both must be willing to work hard together to achieve the campaign goals - work which includes amongst other factors both parties sharing information in a transparent manner.

Optimization has been a popular word in business since the hi-tech age hit in the early 90’s. However, as technology became more complex, so did the practical meaning of that word. It just became something that people would use in marketing copy or during a presentation to impress some big wigs in suits.

Optimize, optimize, optimize.

What exactly do you mean by optimize?

Because if by optimization you mean taking a business process that has already been digitized, and breaking it down even further with more specialized technology, what you’re really getting is an un-optimized complex jumble of highly specialized processes.

Knowing this, when businesses pitch optimization, what they usually mean these days is simplification, i.e. which of the complex business process offering will a) cost me the least for b) the greatest return on investment.

Sounds pretty simple doesn’t it?

The problem is that simplification by itself is not optimization, and neither is ignoring the potential benefits of complexity simply because it’s, well…complex.

True optimization means finding a way to aggregate every element of complexity through a simplification filter that still allows for the exploitation of each and every element of the business process in a case specific adjustable fashion.

In the short run this will most probably require more initial investment, time (initial setup), money (initial investment), or otherwise – But in the long run, if you did your homework, your job will become far easier and the return, far greater.

Now let’s apply what we just said to digital advertising:

Generally speaking the average digital advertiser tries to spend the least amount of money per customer conversion, in an amount to “optimize” his specific conversion revenue. However, based on what we said, there has got to be a better way to go about this.

If we can only find a way to take all major aspects of a digital advertising campaign, each one affecting a different element of the conversion process:

·         Bid marketing- directly affects conversion percentage, indirectly affects customer value.

·         Creative concept- directly affects click through rate, indirectly affects conversion percentage.

·          Media- directly affects conversion, indirectly affects click through rate.

·         Landing page- directly affects conversion percentage, indirectly affects customer value.

And find a way to balance their weighted use properly throughout a campaign to affect the greatest overall conversion rate…Well now we’d be optimizing.

 As Affilicon Israel draws near, we approached Peles to discuss the interaction between the two marketing channels - Results-based online advertising & Affiliate marketing:

§         Q: How do affiliate marketing and results- based marketing co exist with the more traditional ways?
Peles:  Affiliate marketing is one segment within the broader scope of result based advertising. They in many cases compete for budget, although, in our opinion they shouldn't. More traditional ways should deal with what is called branding, and result base should deal with direct acquisitions. More sophisticated advertisers, transforming both their budgets to results - they just define the goals differently, but measure both and optimize both budgets.

§         Q: What is more effective affiliate or SEM?
Peles: It is like asking what is more important, eating or drinking, for successful online advertising programs both should be effective, it is a matter of volume, competition and market.

• Website marketability
• Offer
• post click conversion

 On the side of the Service provider or, in our case, the "network" - we complete the picture with our expertise in providing the playing field and the optimization tactics. As a representative of the media side of the business, my responsibility is with the playing field or accurately; the rich Blend of traffic that provides the opportunity for the conversions to happen. This is fundamentally made up by a 2 level media pool: 
1. The base – the mass amounts of various traffic that provide multiple types of traffic from channels and placements that have some  slight relevance to the advertising offer.
 2.  Highly targeted, highly convertible traffic. Together these traffics create a blend that provides the advertiser with enough momentum to take its first baby steps in making the beginning conversions happen.

Once those occur it has to be provided with enough fuel to be able to learn and grow and be optimized using our technology, expertise and tactics into a significant volume campaign. One may ask why a campaign isn’t run on the second level traffic only where the highest likeliness of a conversion would occur.

The answer lies partially in the fact that this traffic is limited in its quantity and furthermore we have seen that to grow an advertiser to limitless expansion it is important to provide it with both types giving it the necessary bulk it needs to be a strong long lasting campaign. 

If the issue of the perfect blend of traffic isn’t enough; in order to keep going a long lasting successful campaign the traffic pool must remain forever fed by a continuous flux of new traffic in both of the levels. This compliments the continuous changes and optimization tactics made on the back end side of the campaign that creates each moment with a rich starting point for the new seed conversions. 

By Gal Avidor, Account Manager

In this post we will demonstrate how a properly planned and funded test campaign can ultimately produce the desired results: lower eCPA, better reach of leads and new clients, and of course the major bottom line - higher ROI. 

For the past two years we have witnessed the emergence of many ventures looking to utilize results-based online advertising to drive potential customers to their website, and convert relevant traffic into sales dollars.   
 

Today, it is especially important for advertisers to maximize the utility of every dollar spent while casting a wide net in the vast online marketplace. Many advertisers have already invested a great deal of time and money developing a “designer” site platform and home page for incoming traffic, and are looking to test out the effectiveness of their designs before devoting a great deal of money to an advertising campaign.   In many cases, the size of the initial investment in the site creates a sense of urgency to quickly launch a test advertising campaign, with the hope that maximum performance can be achieved instantly on a small test budget. Our vast experience in this field has revealed that many advertisers make some common mistakes while developing online marketing plans for their websites, leading to a loss in efficiency and effectiveness, and costing more money in the long run to reach their goals. Here you will learn some of the essential elements of effectively testing an advertising campaign to maximize value over its lifetime. 

 A. Planning and Setting Objectives Set campaign objectives and define the value of your customer acquisition chain. Sample Objective: To achieve online sales while maintaining a daily sum of leads to support your calling center.  For this example, we get a mix of 3 options for a conversion process:  

1. Short qualifying process (for online sales).
2. Llong qualifying process (for enhanced lead quality).
3. Mix of short and long processes.

 Defining a clear objective and putting a true price tag on the value of each component within the acquisition chain enables you to measure and evaluate how performance at the beginning of the process affects the value of other components within the value chain.  You can follow the chain to the final conversion and beyond, even analyzing each component’s affect on up-sell opportunities.  This critical level of analysis will ultimately increase your ROI. 

B. The Optimal Landing Page Mix
In order to ensure achievement of your objectives, you will need at least 2-3 optimized landing pages which are properly designed and structured, giving the right incentives for viewers to click through your acquisition chain. 
Sample Objective: One of our clients was seeking to achieve an eCPA (effective cost per acquisition) of $250 from online sales of a financial product with 3 landing pages: 

1. Home page (not recommended)
2. A “call for action” page
3. Special incentive page

Testing these three, distinct landing pages gives us the ability to better understand the end user interaction and behavior in regards to our sales efforts. We can find out: Is the end user impulsive or is he more incentive driven?  Is he committed to enduring the whole conversion process or is he more comfortable with a short lead process, paving the way for an up-sell at a later date?   To summarize, the optimal landing page mix is an extremely important piece of information to maximize the reach of our conversion process, while enhancing our understanding of client behavior, and ultimately maximizing ROI. 

Landing Page Types – Pros and Cons: 

   C. Choosing a Test Budget:
Advertisers often commit a great deal of resources to building an online platform, but allocate minimal budgets to the testing phase, underestimating the capital needed to achieve a truly successful test that will translate to maximum ROI. The growing diversity of online traffic sources embodies many opportunities for advertisers to tap into new market opportunities, but it poses a great challenge of distinguishing between highly relevant, revenue-generating traffic sources and less relevant sources.  In order to calculate the ideal budget, one must take into account the different variables being tested during the campaign, these variables may include the CPA target goal, the number of creatives and Landing pages being tested and the number of traffic sources sampled during the learning process.It is important to point out that these variables differ from one advertiser to another, both in type and significance and depend much on the type of product or service being tested and the advertiser’s main and secondary objectives.These variables will dictate the size of the “Optimum budget” which is defined as the ideal budget to achieve a statistically viable conclusion to maximize ROI. To demonstrate how an Optimum budget can work for you, let's examine a real case study. 

D. Case Study 
Going back to our financial products example, where the advertiser was looking to achieve an eCPA of $250, he had created 3 landing pages and two creative sets totaling 10 creatives: CPA goal = $250Creatives tested = 10Landing pages tested = 3 Recommended test budget for the combination of number of variables and CPA goal is: $15,000With the test budget calculated the test campaign looks as follows: 

Phase 1: Preliminary AB testing The 3 landing pages were exposed to the same amount and mix of traffic in order to establish a general idea of potential for yield. This was done in order to plan the general distribution of traffic to be implemented during the actual testing phase. 

 Phase 2: Learning Phase (campaign) The test campaign was conducted for 4 weeks, constantly monitored and optimized. The results were as fallows: 

 From the test results we can conclude that although the test did not yield the desired eCPA of $250, and did not produce a high ROI, it did exhibit a number of positive key elements, allowing us to make meaningful changes before launching a full campaign. 

1. A positive trend in the number of new leads and new clients
2. A positive trend in leads\new client's ratio.
3. A decline in eCPA.
4. A relatively large number of leads fit for potential up-selling.

  These elements play a key role as you will see in the phase 3 – the optimized campaign:

 Phase 3: Optimized Campaign After the learning was complete, the number of high performing landing pages was narrowed down to 2 and the number of creatives was narrowed to the 5 highest performers. With the proper test exercised, and traffic sources carefully analyzed, the optimized campaign was launched with a 75K budget, with the following results: 

From this data, we can conclude the following: 

1. The number of leads and new clients increased dramatically.
2. So did the leads\new client's ratio.
3. The average basket value for new client decreased but in exchange for higher reach and higher volume.
4. The eCPA dropped drastically and registered below the client's initial goal.
5. The total revenue generated by new clients, when added to the revenue from the test campaign, yielded a higher ROI.

 When summarizing both the testing phase and the optimized phase, the full picture becomes clear: 

 To summarize, defining and carefully planning the different aspects of a results-based online advertising campaign are crucial to achieving maximum results in the long run.

Exhibiting at the Internet Convention in Israel last week, was a good opportunity to interact with the Israeli industry
and to introduce them with our comprehensive results-based approach to online advertising.
A closer look into our philosophy was provided by Peles in his workshop about pursuing results effectively and  some more on the central panel.
With the attendance of our DMG team at the event, results were clearly in sight.

Peles at the Panel: The Internet in Israel

At the booth: Inbar, Peles, Noam

Peles, DSNR and Shmil

At the booth No. 2: Inbar, Peles, Tom

By Gilad Hellerman - CTO   

One of the major characteristics of the online-result-based-advertising industry is the huge numbers involved (no, I am not talking about the money, even though that is quite impressive as well, I am talking about impressions, clicks and conversions).  

 These numbers require special attention both in terms of technology (which I will address in my next post), and in terms of information gathering and analysis, which I will address in this post.What is our goal in all of this information gathering and analysis?Our ultimate goal is decision making, mainly towards campaign optimization, even though there are other decisions we need to make in order to maximize our profits. 

 In order to empower the user to make better decisions, we need to provide the user with knowledge on which the user can make his decisions. The emphasis is on knowledge as opposed to information since knowledge is actually the result of the procedure of processing the information we are presented with, during its storage in our brain. We make our decisions based on the knowledge rather then based on the information. Our goal therefore should be to process the information for our user so that it will save him some of the processing he will need to do by himself, and add bits of processing he might not have thought about, thus enlarging his knowledge.

 How do we turn information into knowledge?
We do that in four major stages:
1.       Data gathering
2.       Data analysis
3.       Deciding what, of the vast number of analyzed data to present.
4.       Presenting the data in a way that will make it easiest to use and consume by the user.  

Establishing the decisions on knowledge rather then information is the only way to effectively manage this vast amount of data in the online advertising world.

Gilad