Real Time Display - The Metrics That Matter and How to Optimize for Success

Arjun Dev Arora!
Real Time Display – The Metrics
that Ma er and How to Optimize
for Success
June 2014!

@danielmcgaw
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@arjundarora
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Arjun Dev Arora, Chairman and Founder of ReTargeter
Arjun was the founding CEO of ReTargeter and
bootstrapped the company to be in the top 100 of Inc's
Fastest Growing Companies list. He is a recognized expert in
display advertising and retargeting. Arjun also advises
various advertising and technology start-up companies.
Dan McGaw, Director of Marketing at KISSmetrics
Dan is the Director of Marketing at KISSmetrics, where he
gets the opportunity to help the best marketers in the world
measure their marketing and business eﬀorts. Prior to
KISSmetrics, Dan was VP of growth at Code School, where
he helped the company grow to over 500k users and $400k+
in monthly revenue.

1! Core Metrics!
CPM, CPC, and CPA!
3! Intelligent Spending!
4! Execution & Optimization!
Table of Contents!
Impressions, Clicks, Conversions, RoAS!
5! Summary & Conclusion!
2! Core Dimensions!
Inventory, Creatives, Time, Landing Page!

Impressions
Core Metrics!
•  Whenever your creative is displayed, it’s considered an impression.
Why they ma er"
Impressions are the point of contact and between you and your audience.
Therefore, campaign optimizations focus on serving impressions at the
right time, to the right people, and in the right place.
What they tell you
The way viewers respond to impressions can tell you a lot about your
audience and your brand. "
What they don’t tell you
Don’t expect a Fall coat sale to perform identically to a Spring sandals sale.
While you can apply some wisdom between campaigns, every campaign is
diﬀerent and requires its own set of tests and optimizations."
How they can change
Impressions vary dramatically depending on your campaign and spending
goals. Do you care what websites display your ads? Or are you interested in
displaying as many impressions as possible, regardless of location?

Clicks
Core Metrics!
•  A click occurs when a user clicks your advertisement
Why they ma er"
If an impression is the point of contact between you and a viewer, a click is
the viewer engaging in the conversation. A click means that your creative
generated enough interest for somebody to click on it. Although clicks are a
common way to measure campaign performance, it should not be the main
driver of your campaign
What they tell you
Clicks can tell you how effective your creatives are. You can also gather
intelligence about how much demand there is for your offering."
Bot traffic skews click data. As a result, you might make misinformed
campaign optimizations. You can identify bot traffic and segment this group
to be excluded from your campaign (more details on this later)."
How they can change
Clicks are desirable because they imply inbound traffic. Sometimes however,
all that ma ers is that somebody saw the ad. For example, a campaign
urging people to “tune in” to a sitcom is pushing for awareness. The number
of people who click through isn’t as important as whether or not they watch
the show."
"

Conversions
Core Metrics!
•  Conversions occur when a user performs a desired action and differ depending on the individual
campaign goals.
Why they ma er"
Conversions are o en the end goal of display campaigns and are affected by
numerous factors.
What they tell you
Poor conversion rates can have several causes: poorly designed creatives,
wrong audience, not serving enough impressions, poor landing page UX, or
even an undesirable offering."
It won’t be immediately clear what is causing people to convert (or not). If
you aren’t satisfied by your conversion rate, it could be an issue with your
display advertising, but it could also be an issue with your pricing,
website, messaging, etc. You’ll need to test to determine the root of any
pa erns.!
How they can change
Conversions will vary depending on your business and campaign goals.
Conversions can be as small as a social share, or as big as purchasing a
vacation package. The most common conversion types are a purchase, a
share, and data submission (e.g. subscriptions/registrations)"
"

Click Through Conversions
Core Metrics!
•  A ribution: Click through conversions are easier to a ribute than view through conversions.
You know what creative a person saw, when they saw it, and you know that they engaged with it
before actually converting.
•  Measurement: Click through conversions are measured by click through to conversion rate
conversions/clicks.
•  What does it mean? A low click through conversion rate could mean that your creative isn’t
displaying to the right audience. It could also suggest that your landing page needs work to move
visitors to convert.

View Through Conversions
Core Metrics!
•  A ribution: A ribution is hazier for VTCs but it’s still an extremely valuable metric. Although
viewers don’t click on the creative, studies have shown that display campaigns result in an 80%
increase in branded search, meaning people see the creative and use a search engine to find the
business later.
•  View through window: View through windows help define VTC a ribution. For example, a 14
day view through window will a ribute conversions to a creative if it was viewed within 14 days
of the conversion.
•  Intelligence: The VTC rate is an important measurement of the value and effectiveness of your
campaign. A low VTC rate could indicate that you’re serving the wrong audience. Is this audience
behaving differently than other audience segments that you are not targeting/retargeting? You
might even set up a test to find out!

Core Metrics!
Ad Spend
Ad spend is simply the amount you paid for advertising.
•  Spend = Impressions/1000 x CPM
Revenue
In this case, revenue refers to any income that results from your campaign.
You can usually use a revenue pixel to track your revenue and tie it to a
specific campaign."
"
Return on Ad Spend RoAS
If you know your ad spend and your revenue, you can calculate your RoAS
(Return on Ad Spend).
•  RoAS = (Revenue – Spend) / Spend
You should define what RoAS works for your goals and use this metric to
compare your overall advertising efforts."
Ad Spend, Revenue, and RoAS

Inventory Source
Core Dimensions!
•  Inventory source refers to the particular ad network that provided the inventory space.
Understanding how your campaign performs against diﬀerent inventory sources will help you
optimize.

Creatives
Core Dimensions!
•  Creatives are the actual ads you display. Continuously test and optimize your creatives.

Creatives
Core Dimensions!
•  These are the most common inventory sizes

Time of Day
Core Dimensions!
•  Your audience may be more active online at certain times of the day. Tailor your campaign to ﬁt
your audience.

Landing Pages
Core Dimensions
A well-designed and relevant ad, will probably drive a lot of clicks. But what happens a er the
visitor clicks your ad? Your ads and landing pages should align so the user has a smooth path to
conversion.
•  The role of the landing page
o  The landing page links your creative and your oﬀering
o  The landing page should move users through your funnel
•  Optimize forever
o  Keep an eye on: bounce rate, conversion rate, and quality score (a propriety measure built by
Google that indicates how relevant your ads, keywords, and landing page are to a person
seeing the ad).

Landing Pages
Core Dimensions!
•  Elements of a good landing page
o  Design and messaging of
your landing page should be
consistent with your creative
o  Should reiterate what was in
the ad and specify what the
visitor can expect
o  Clearly communicate the
conversion action

Inventory Buying Methods
There are three main ways to buy ad inventory in display advertising. The standard buying method
is CPM, but depending on your campaign goals, it may be more appropriate to pay on a CPC or CPA
basis:!
Intelligent Spending!
CPM
Cost-per-mille
CPC
Cost-per-click
CPA
Cost-per-acquisition

CPM
Cost-per-mille!
How it Works" Advertisers pay per 1,000 impressions."
Cost Range
Programmatic: $0.50-$3.00
Programmatic Premium: $5-$15
Premium Direct: $10-$100+"
"
Who it beneﬁts
•  Industry standard for purchasing display media.
•  Appropriate for most display campaigns.
•  Works to the advantage of advertisers and adtech
companies."
"
Campaign Goals
Works for just about all campaign goals (brand awareness,
click through, reach, conversions) because it allows room
for optimization toward any goals."
"

CPC
Cost-per-click!
How it Works"
Advertiser pays for every click, regardless of the number of
impressions displayed"
Cost Range
Programmatic: $0.50-$5.00
Premium publishers don’t typically allow CPC!
Who it benefits
•  Best for advertisers that care less about brand awareness
and more about site traffic
•  Doesn’t always work for adtech companies looking to
protect their downside risk"
Campaign Goals Advertisers focused on generating site traffic"

CPA
Cost-per-acquisition!
How it Works"
Advertisers pay by conversion, regardless of number of
impressions and clicks."
Cost Range
Highly variable depending on the campaign. For example,
pricing will differ if the acquisition is the sale of $10,000
so ware product versus a $3 pair of sunglasses."
Who it benefits
•  Good for advertisers trying to drive conversions
regardless of traffic source.
•  Can be VERY difficult for adtech companies as they take
all the inventory risk."
Campaign goals
Company needs to drive conversions within a fixed cost per
conversion."

Buying methods
vs.
Campaign Goals

Measure
CPC/CPA
CPA
Cost-per-
acquisition
Set up and optimize toward CPC and CPA goals even though you pay on a CPM basis
•  Paying by CPM gives advertisers and clients the opportunity to see campaign conversion performance
•  Reach the largest possible audience
So why not pay on a CPA/CPC basis?
•  For CPA, view-through and click-through a ribution must be deﬁned before campaign launches
•  CPA and CPC pricing can result in less ﬂexibility for your campaign manager to test
•  CPA/CPC pricing structures don’t always work well with adtech companies since they might not have
great control over campaign assets and performance (creative, landing pages, pricing, etc.), but take on
the risk of the actual media cost.
Pay by CPM While Optimizing Toward CPA/CPC Goals

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Execution & Optimization!
•  Part of understanding your audience involves knowing when they browse the web. If you know
this, you can tailor your campaign to display ads when they are online. For example, B2B sellers
may ﬁnd that they are most successful during business hours while an entertainment company
may do be er showing impressions in the evening.
Time of Day
Is your audience really looking at 3AM on a Sunday?!

•  Diﬀerent ads appeal to diﬀerent kinds of audiences
•  Your audience will get bored of even the best ads, it’s imperative to constantly rotate creatives
•  How do you know what creatives work best? A/B test and iterate!
•  Decide what element you want to test, then make an alteration to your existing creatives. For
example, try changing the color of a CTA or the wording of a tagline. Then compare the
performance of the creatives. Make sure you don’t alter too much in the test version, that
way you know exactly what drove a change in the creative’s performance.
Creative
Test, test, test!

•  Segmentation is a way to decide who is being targeted based on where they are engaging with
your website. Segments can be as complicated as SKU based or as simple as choosing between
two sections of the site.
Segmentation
Organizing your audience!
Two diﬀerent products Two diﬀerent ad experiences

•  Display advertising is great for reconnecting with site visitors, but extra care should be taken
not to overexpose yourself. Se ing a frequency cap will limit the number of times tagged users
see your ads and will prevent potential customers from feeling bored, overwhelmed, or stalked.
We recommend showing 17-20 ads per user per month.
Frequency Caps
How to use them properly and with diﬀerent segments!

•  Don’t waste your ad spend showing advertisements to an unqualiﬁed audience. If you’re selling
an app that is only compatible with iPhone, don’t advertise to Windows phone users.
•  A more advanced optimization would be to target based oﬀ conversions driven by browser type.
For example, if Chrome users tend to convert more, you may place more of your budget
advertising to Chrome users.
Browser/Device
Only show ads to certain types of devices or browsers!
Image Link

•  Some inventory sources focus on speciﬁc site types like sports, gaming, entertainment, news, etc.
Depending on your audience, it may make sense to concentrate your ad spend on some inventory
sources while avoiding others. Similarly, you should remove underperforming inventory sources
and optimize for top performing sources.
Inventory Sources
Remove the wrong inventory sources, and get more from the right inventory sources!

•  First party data is any information you collect about your audience. In the context of display
advertising, first party data is cookie-based data, and it’s the most valuable data you can collect
about your audience.
•  Because first party data specifies your users, it’s the key component to site retargeting, facebook
retargeting, and CRM retargeting.
•  You will probably find yourself in a position where you want to reach an audience that you don’t
have information about. This is where second party and third party data can come in handy.
First Party Data
What is your audience telling you?!

•  Second party data is essentially somebody else’s ﬁrst party data. Second party data isn’t usually
commoditized, but you can work out an arrangement with trusted partners to share customer
data. For example, a high-end watch company might partner with a yacht blog to ﬁnd new
customers. The possibilities are endless, but the key is to form and maintain good partnerships.
Second Party Data
Can you get proprietary access to transparent data?!

•  Companies such as BlueKai, Peer39, and eXelate sell third-party data. These companies are also
known as DMPs or Data Aggregators and they are the behemoths of the data world. Their data is
typically purchased on a large scale from publishers. The beneﬁt of third party data is the sheer
volume of user data you can access, but this data is also widely accessible to competitors so you
aren’t necessarily gaining unique audience intelligence.
•  Third party data is great for demographic, behavioral, and contextual targeting, but can also be
used to remove bot traﬃc
•  Third party data providers charge a fee to use their segments, usually on a CPM basis. Depending
on the the data, the CPM can be anywhere from $0.50 to $5.00
Third Party Data
What’s out there, and what’s right for your business!

Bidding Styles
Bid to win all vs. bid to win most!
Bid to Win All" Bid to Win Most"
Win as many impressions as quickly as
possible"
Manage your costs so inventory is cheaper,
willing to lose some bids"
Appropriate for hard-to-win audiences
Ex: High-level Executives
Appropriate for easy-to-ﬁnd audiences
Ex: College Students!
Exhausts budget rapidly" Preserves budget longer"

The world of display advertising is fast-moving and ever changing so it’s imperative to
keep up, or else you might be le behind. Keeping up can mean building new technologies
in-house, but it can also mean finding novel ways to combine existing technologies.
First Mover Advantage
Using and building new solutions!
In-House"
If you want something done right, sometimes you’ve got to do it yourself.
Unsurprisingly this takes a lot of time and effort, but it can pay off if it makes you
stand out in the marketplace.
Example: Trulia dynamic creatives
Partner Up
Innovation doesn’t have to mean building a new solution from the ground up.
Existing technologies can be combined in novel ways to create brand new solutions.
The key is to identify these technologies, and forge a strong partnership with the
technology’s providers.
This form of innovation is faster and requires less effort. However, it can leave you
at the mercy of another organization that you have li le control over, so make sure
to choose your partners wisely.

CRM ReTargeting – This is a product that ReTargeter offers, and is built using technology from
LiveRamp. CRM ReTargeting lets you show advertisements to an audience defined by your CRM data.
Conversation ReTargeting– ReTargeter has also taken on the role of technology provider to power other
company’s products. PrimeLoop recently announced Conversation ReTargeting, a tool that allows
advertisers to tag users who click on links that don’t lead to their website. PrimeLoop uses ReTargeter
technology and combines it with their own link-shortening technology to offer a new solution to its
clients.
First Mover Advantage
Partners sharing technology to provide new solutions to customers!

Real Optimization
Tests and Results

Optimization: Dayparting (Time of Day)
We set a group of campaigns to only display ads from 7am-10pm and compared the results to le ing
the campaign display ads throughout the day.
Impressions 34%
A decrease in impressions expected, as
you’re displaying impressions for a smaller
window of time
Clicks/CTR 5% 59%
Clicks and CTR rate both increased,
potentially because the campaigns didn’t
engage night owls.
Conversions/Click 38%
Conversions per click decreased, suggesting
that dayparting generated greater interest
but the audience may not have been ready
to convert
The decrease in conversions is accompanied by an increase in CTR may be caused by
people browsing more during the day while at work, but not actually spending money
until they’re at home at the end of the day.
What’s next: A next step would be to test this hypothesis by focusing more impressions
on times when people are at home, and advertising less during work hours.

Optimization: Bot Traffic
Bots are an unfortunate part of the ad industry but if you identify and remove bot traffic, you will
likely see an improvement in your ad spend. Here’s the result of excluding some segments identified
as bot traffic.
Impressions 4% A decrease in impressions reflects the bot
traffic that has been weeded out
Clicks/CTR 17% 20%
Clicks and CTR rate both decreased, both
promising results as this was probably all
bot traffic
Conversions per click increased,
suggesting that at least some bot traffic
has been successfully removed and ads are
now being more concentrated on an
engaged and interested audience
No advertiser wants to waste their ad spend on bots so making any effort you can to
minimize bot traffic should only have a positive impact on your campaign.
What’s next: Unfortunately fraudsters are extremely adaptable and optimize quickly so
always be on the lookout for ways to eliminate bots.

Optimization: Inventory Quality
Some advertisers only want to display ads on certain sites while others appreciate as much exposure
as possible. We tested what happened when we only displayed ads on select inventory.
Impressions 38%
A decrease in impressions is caused by
the decrease in overall available
inventory.
Clicks/CTR 20% 28%
The decrease in overall clicks is likely
driven by the decrease of impressions. Of
the impressions displayed however, there
seems to be more audience engagement.
Again, although overall impressions and
clicks went down, the rate of conversions
to clicks went up substantially. This
suggests that displaying ads on quality
inventory reaches a more qualiﬁed
audience.
What works for one advertiser won’t necessarily work for another. You should always
test your own campaign.
What’s next?: More optimizing, always.

Summary
What you know:!
Summary and Conclusion!
Core Metrics"
Impressions, Clicks, Conversions, RoAS
Core Dimensions
Inventory Source, Creatives, Time of Day,
Landing Page
Intelligent Spending CPM, CPC, CPA"
Execution and Optimization
There are a myriad of ways to optimize your
campaign once you have an understanding of
your core metrics"

Conclusion
Main Takeaways
Congratulations! You’re ready to create, manage, and optimize your own display campaigns. Don’t
forget that just about anything is possible with RTB, make sure you constantly test, and always be
optimizing
Summary and Conclusion!

Questions?!
Arjun Dev Arora
Chairman/Founder
ReTargeter
@ArjunDArora
arjun@retargeter.com!
Dan McGaw
Director of Marketing
KISSmetrics
@danielmcgaw
dan@kissmetrics.com!

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