The power of online marketing

With the dramatic increase in data, businesses are facing huge new challenges. To thrive, marketers must use their finite online advertising dollars to target prospects with the highest likelihood of conversion and optimize their websites to maximize conversion of those high-quality prospects into valuable customers. The exponential growth of data increases the opportunity—but also the complexities and challenges.

The online advertising revolution

Companies worldwide have embraced online advertising as the preferred method of attracting customers and promoting their brands. Online advertising allows marketers to precisely target their audiences and then monitor and measure the effectiveness of their advertising at an exceptionally detailed level. Marketers then have the chance to respond more quickly and efficiently than through traditional means. Their ability to leverage this channel to its fullest potential depends on the quality of their technological tools.

Consider a visitor who navigates to a publisher’s web page, such as a Google search engine results page or a Facebook© home page, and sees ads that are targeted to that specific visitor. Underpinning this simple example is a sophisticated process that determines if and where each ad appears. Each time a web page is requested, the publisher undergoes a dynamic auction to determine which ads to display. This is based on the targeting options specified by the advertiser, the price the advertiser is willing to pay, the historical performance of an advertiser’s ads, and a variety of other criteria. The increased competition—due to a growing number of advertisers along with complex bid and placement processes across multiple publishers—makes achieving optimum results exceedingly difficult.

The only constant is change

Managing the various bid and targeting criteria is a labor-intensive and time-consuming process, considering that for each web page requested, the ad may be competing against tens or even hundreds of other advertisers. Each one of these advertisers is continually changing their targeting options, ad pricing, ad copy, and many other parameters. Responding manually to the rapid changes in this dynamic environment, with any level of effectiveness, is virtually impossible. Each publisher provides a separate management platform to manage ads, bids, and targeting options for utilizing their online advertising. As a result, advertisers must manage hundreds of ads across thousands of targeting options using multiple interfaces against formidable competition—an ideal application for technological automation.

Big data, big problems

Advertisers now have unprecedented analytical data on the performance of their advertising efforts. For each ad, advertisers can now measure:

• How many times an ad was displayed (impressions)
• How many times an ad was clicked (clicks
• How many web pages the visitor viewed (page depth)
• How long the visitor stayed on the site (time on site)
• Whether the web visitor bought a product, downloaded a white paper, or requested a call (conversions
• The total amount of any product/service the web visitor bought (conversion value)
• Whether the web visitor revisited the site at a later date (returning visitors)

While marketers have always dreamed of having access to robust analytics regarding their advertising efforts, they have suddenly found that they are inundated with an overabundance of data that is impossible to manually consume and make actionable. Which ads are most/least successful at driving traffic? Which ads are the most/least successful in driving conversions? Which targeting options need to be changed or eliminated? Which publishers are the most effective?

What kind of traffic is cost-effectively acquired, but not converting? Why is it not converting? What are the trade-off costs and benefits of each bid when making budget allocation decisions? In short, what can be done to synthesize this massive amount of web analytic data to improve online advertising effectiveness? It is also critically important that online advertising is optimized to meet marketing objectives: cost, traffic, conversion, cost per acquisition, revenue, profit, time on site, or some combination of all of these.

The last mile

#While complex, successfully attracting the most cost-effective traffic to the site addresses only half of the problem. If the campaign objective is to generate more paying customers, the site must be compelling enough to accomplish that goal. If the goal is to sell shoes, delivering an online experience that propels the visitor to a shoe-buying decision must be a part of the equation. If the purchase is the ultimate measure of success, website optimization for optimal conversion rates cannot be overlooked.

Across the industry, website conversion rates have historically remained between one and three percent1, proving that most web experiences fall well short of expectations. There are many elements that contribute to the success or failure of a website experience, including the relevancy of messaging, layout, forms, pricing, navigation, imagery, offers, and placement. Each of these variables contributes to the fact that about 98 percent of web traffic does not end with the desired action and why so many campaigns routinely disappoint.

The solution

Online advertising is a highly competitive environment in which success and failure is measured in leads, conversions, and revenue. Advertisers are dynamically competing with thousands of other advertisers for consumer attention to cut through the noise and ultimately deliver results, all within tight marketing budgets. Furthermore, they are inundated with massive amounts of web analytics data that cannot realistically be analyzed, processed, and made actionable within acceptable timeframes. Lastly, advertisers are routinely leaving money on the table by unsuccessfully optimizing traffic conversion after working so hard to drive that traffic to their site.

Information technology is a perfect fit for addressing these online campaign challenges. It is important to identify the best ads, keywords, publishers, and time or day—but that alone is not nearly sufficient. Technology can be used to analyze large volumes of data in an automated fashion to algorithmically identify the combination of ads, keywords, publishers, and a variety of other criteria that perform best in combination with each other; how best to allocate a finite advertising budget amongst all the combinations; how to improve quality scores to reduce advertising costs; how to experiment with new and low volume keywords to profile them for future optimization; and most importantly to optimize all this information and update bids across hundreds of thousands of keywords, ads, match types, publishers and more— dynamically and routinely.

Technology is equally critical in website optimization, where you have to evaluate a variety of content combinations to not only identify the optimal piece of content for each region of a web page, but identify the best combination of pieces of content to drive visitor action—and ultimately deliver vastly superior results. Website optimization technology can analyze results across hundreds of thousands of page views, scientifically identifying the key determinants of conversion uplift. Choosing not to use technology in online advertising and website optimization, at best, results in significant inefficiencies and, at worst, ensures your best leads go to your competitors.

Online advertising technology should possess the following attributes:

• Algorithm-based – unlike rules-based systems, utilizes automated portfolio-based, algorithmic optimization to drive the most valuable traffic at the lowest cost
• Automation and real time – analyzes massive volumes of web analytic data to drive advertising and conversion optimizations in real time without user intervention
• Complete control – avoids “black-box” solutions by allowing the flexibility to specify limits and constraints to ensure business objectives are successfully achieved
• Integrated cross-publisher analytics – offers complete and detailed web analytics to ensure tracking and analysis of campaign cost and performance data by any dimension, as well as comprehensive reporting
• End-to-end – works seamlessly from traffic acquisition through onsite targeting and testing of on-site user experience

Similarly, website optimization (or multivariate testing) technology should possess the ability to handle different testing scenarios:

• Page concept (A/B) testing – used to test radically different page concepts and gain initial insights and direction for multivariate testing
• Simple multivariate testing – allows for easy testing of offers, price points, images, and content on the website simultaneously
• Full-page multivariate testing – provides the most powerful and flexible online optimization method, enabling testing of millions of content variations and relationships among elements to identify optimal combinations for any page