October 22, 2021

Why programmatic advertising can only secure its value with engagement-based metrics

Video advertising is the growth driver in the digital advertising system. Successful programmatic advertising in this context requires metrics that relate to specific engagement indicators such as completed views.

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Uncertainties caused by the current economic situation are leading to tighter advertising budgets. Covid-19 has made marketing experts increasingly economical. Brands are rightly wary of the context of the content in which their campaigns and content take place. In addition, there is increasing pressure to justify advertising spending and return on investment (ROI) on advertising budgets. A change in programmatic advertising to engagement-based key figures can help to make the ROI more transparent and to optimize it.

Transparency needed for advertisers

Advertisers need more transparency and visibility than ever before when controlling their campaigns. In addition, the explosive growth of screens and smart devices has accelerated the digital transformation in video advertising and rightly increased expectations of not only delivering results, but also being able to measure them. According to Zenith’s Online Video Forecasts the daily consumption of online video content will be 100 minutes in 2021. However, in recent months, due to global exit restrictions, more people have been at home who have consumed more video content. So far this year, German consumers have spent 16.6 percent more time streaming digital videos. It would therefore not be surprising if future studies on the prognosis of media usage and consumption of online video corrected these values ​​upwards again. Video advertising is the growth driver in the digital ecosystem.

To ensure that programmatic advertising remains a useful tool in this environment, new metrics are required. One solution to this is to focus on engagement-related metrics. For example, the video completion rate, which provides information about the percentage of a video that was actually seen, or the cost per completed view (CPCV), the amount that advertisers pay to publishers for a video ad that has been viewed until the end.

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Machine learning supports the optimization of the bids

Manual optimization is very complex in this area. Scalable, results-oriented solutions are seen as a beacon of hope for publishers and agencies. Here advertisers only pay when a certain action takes place, for example a certain part of an ad has been seen by the user. This makes it possible to use results as a currency and not have to optimize them on the basis of classic CPM. Agencies and publishers can thus increase their performance and minimize financial risks while improving operational efficiency. Modern shopping platforms not only make decisions about which impressions they offer, depending on the performance indicators specified by brands and the orientation of the targeting,

Using predictive machine learning, one is able to develop a solution to automatically optimize bids based on the predicted video completion rate of the available inventory. This means that agencies and marketing managers only pay for impressions that are 100 percent displayed. This shift in how return on investment can and should be measured in today’s world of changing consumer habits is already showing results. With the transition from pay-per-impression to pay-per-completed-view, inventory buyers benefit from a significant reduction in CPCVs and improved operational efficiency.

With guaranteed results to success

Practice proves these steps to be right: The Swiss agency Drop8 was faced with the challenge of delivering video ads that were viewed in full for their customer, a travel booking platform. At the same time, the target group should be addressed on the customer website. To ensure this, the agency optimized the cost-per-completed view. However, doing this required various manual steps on a daily basis, including retrieving and analyzing reports, reviewing data, and optimizing each campaign based on these findings. As a result, the team had to spend a lot of time and internal resources on this. The solution was to work with a technology partner who ensured guaranteed results through the use of intelligent machine learning algorithms.

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On the basis of guaranteed campaign results and the use of intelligent technology, traders are freed from the tedious task of repeatedly referring to manual reports and manually optimizing for video completion or CPCV-specific metrics, which saves them a lot of time.

In the past few months, people have been more at home, using the Internet and consuming more content online – especially videos. In times of change, it is more important than ever for advertisers to get in touch with their target groups and to understand what their current needs and wants are. If brands know what moves consumers and they combine this knowledge with effective and meaningful engagement and guaranteed campaign KPIs in advertising, then sustainable advertising is also successful in times of crisis.

When technology is used sensibly, the ad tech industry will be able to support the changing demands and needs of brands and users. The key lies in a data-driven, well-thought-out, programmatic strategy, as well as results-oriented metrics that ensure that the bottom line is a measurable return on investment for a company.