Note From Editor – This is Part 2 of the EPIC Interview on Real Time Bidding. If you haven’t seen the first part check it out here
I’m trying to wrap my head around what an RTB platform really is. Could you explain that a little more please?
Think of RTB as an auction. That’s really all it is. It allows you to buy an individual impression. In the past when we bought on a site level we’d have to buy 1000 impressions. So if I bid $1 I paid 1 divided by 1000. Now if i bid $1 I’m only paying for 1/1000. And those 999 impressions that I don’t want, or I didn’t need…I don’t have to buy. The efficiency of your ad spend has skyrocketed. You’re now able to reallocate your money in a more efficient and effective manner. That’s part number 1.
Part 2. Think logically. If I went to a website (to advertise on) that there is a high likelihood that the people who visit this site are going to be interested in what I have to offer, there is still going to be a high percentage of people who aren’t. More than likely if you’re doing direct buys with banners you’re going to waste a lot of impression dollars.
So how do you pick that 1 impression? That’s data. And we have all sorts of data points that you can use to target. For example,
- You can target someone based on the fact that they visited your website, We can target if they opt-in, or if they went to the shopping cart and abandoned. We call that retargeting.
- We can target contextually, based on keywords
- We can target geographically with zip codes
- And we can target based on audience profile. There are 22,000 different audience segments that you can use to choose an audience to advertise to in our system.
Can you share any bidding tactics to help us compete more with RTB?
Sure. I go to an ad exchange and I want to bid. Dustin, you and I are bidding against each other on this 1 impression. And you bid $0.50 and I bid $1. I win but I don’t pay $1. I pay $0.51. Let’s just say that at $1 I can win upwards of one million impressions. At that price point I’m going to win a million impressions.
But now, as I work on my conversions. I improve my banner CTR and my landing page conversions. I’m now able to raise my CPM bid on the front end. This is where RTB gives you a tremendous advantage. I can now raise my bid to $4. I know my conversions, I know I can make money even at that price point. At this point I’m still going to win those million impressions up to the $1 bid and I’m STILL only going to pay $0.51.
If I bid $4 and you bid $0.50 I win. But I don’t pay $4, I pay $0.51.
Now I’m able to raise my bid up while still keeping my earlier bid “victories.” You’ve never had that ability before. So now you have the ability to scale by raising your price and opening yourself up to more of the available inventory. But you’re not costing yourself at the lower end you were winning at the cheaper prices.
If you sit down and you do some calculations and you increase your banner CTR from say 2/10’s of 1% which means you’ll get 2 visitors per 1000 impressions. If you were to just double that from 2 to 4. Play out the numbers and see what that does to your CPM bid. If you can get twice as many visitors you can pretty much figure out that you can increase your bid by double.
If you increase your conversion rate and that starts to factor in your CPMs can go up even more. You can start to see some pretty psychotic numbers like $20 CPM or $30 CPM.
I see the averages on the back-end We got a report last month that gave us the top 15,000 sites. These were sites that sold a minimum of 30,000 impressions.
In contrast the total number of sites that they sold a minimum of 1 impression on was in excess of 1 million websites. If I were to bid using the statistics I came up with I would not have paid more than $7 CPM. So in today’s world if you can build up your CPM price you can pretty much tilt ALL of the traffic to you. You can win every banner impression and be more aggressive.
There was a Google study done recently. It said that the average number of touches before someone converted was 10.3 on a per channel basis. A channel being email, banner, seo, ppc, etc.
If you look at a banner and you say to yourself “I’m going to show my banner to somebody” at the same you’re able to brand your companies name, URL, and your companies logo. So what I advise everybody to do is to make your company name your url and design a logo. If you look at Clickcertain we do that. Our logo is clickcertain.com. So in every one of our banners that we run we’re constantly branding.
How do you take someone from “I wasn’t thinking of you” to knowing you and considering buying your products (aka the contemplation phase)?
The beauty of RTB is that now you can push people into the contemplation phase.
There was a company that released a report saying that 43% of companies were recognized by their banner even though their banner had not been clicked. Consumers had recognized a company upwards of 43% just because they had seen their banner.
With RTB you get to run your ads on high quality websites (aka A-Level sites). We’re constantly looking for high quality on the site level, on the page level, to the semantic level of the content to make sure that your ads are showing up on the right sites. If you wanted to you could make sure that your ads ONLY show up on A-Level sites. Now you start to build up that underlying value.
When an average user sees your ad on familycircle.com or drudgereport.com or redbull.com or some other well known url that they visit and have respect for you build your brand. They don’t understand that you got your ad on that site through an RTB auction.
All of these things in and of themselves may not add up to a sale. But collectively they have tremendous value.
I’ve heard you talk about the “Era of Scientific Optimization” what’s that all about?
We have something in our system called “programmatic buying.” When we get traffic to a page and it converts, this is the brain, if you convert off of our traffic our system will profile that conversion. Then the system will go out and only advertise to that profile.
Starting 30 days ago you can now advertise using ANY sort of traffic. If it converts on your page we can take that conversion profile and do the same thing. So now anyone driving sales to their site have the ability to bring those sales profiles in and ONLY advertise to that type of web user.
There’s another company that just went live in our system. These guys can talk all of your CRM data. Could you imagine taking all of your emails, your past emails prior to RTB, and submitting them. And what they’ll do is they’ll profile them, and they’ll cookie them. Now you can target those people based on the fact that they were in your CRM.
Programmatic buying wasn’t available a year ago to the smaller sized business. Now it is through Clickcertain.com. I’m telling you that this is just the tip of the iceberg in terms of data. Data driven marketing. Data driven advertising. Everyday someone is coming up with a new way to target somebody.
For example, we do this for some of our clients. We run ads to a landing page and if the visitor calls instead of filling out a form we push that profile back to the system. We like calls. Calls are better than form fill outs. It’s a better lead.
Between 8-12% of the market click on ads, depending on who you ask in RTB. What do you think it’s worth to be able to only advertise to the people who click on banner ads. Of those 8 – 12% only a certain percentage of them take action. What would it be worth to you to only advertise to the action takers? Maybe you only get 20,000 impression per day but they are so highly targeted, so personalized, and so customized that your conversion rates are the equivalent of advertising to 100,000. Or maybe you only get 100,000 and that’s the equivalent to 500,000 – That’s where this is going.
Guys – this is literally a fraction of the entire conversation. I had to truncate it to make it readable over the blog. Tommy has forgotten more marketing knowledge than I’ve ever learned all together. He’s a wealth of information and I hope to share more interviews with him in the future. His RTB platform ClickCertain is going to change the game. I hope you’ve enjoyed this interview series.