Thursday, July 14, 2011

Introducing the V-bom!

We recently did some pretty cool work with DataXu. The team at DataXu asked us to write a guest blog entry. This is what we wrote. 

"Have you noticed there seems to be a lot of data flying around nowadays? It seems like we’re drowning in data. The challenge, of course, is being able to make sense of the gigabytes we gather, to transform it into something valuable, over just raw, unending numbers.

In our experience, the most important thing is not the data, but rather the questions we ask that provide the lens and focus we need to create hypotheses. Only then do we delve into the data to find answers.

A few months ago we asked a question about the relative value of online sales. We had an issue. We were optimizing campaigns to sales, but were working under the flawed assumption that all sales were made equal. Many of our clients sell all manner of different products, from low single price items, to high-cost packages of multiple products. So we wondered if by optimizing to drive as many sales as possible, we were actually leaving $ on the table.

Our real-time optimization methods at that time relied on a pixel firing when a user made a purchase. But arduous, manual calculations were needed to take sales revenue and ROI into account. By the time those insights could be shared with our partners, they may have already optimized to higher sales driving placements resulting in an overall lower revenue and ROI. We were looking for a partner that would help us automate and optimize our media to real value, versus a simple conversion, in real time.

So what did we do? We dropped the V-bom!

V-bom was the internal nickname, (blame us, not DataXu) we gave to Value-Based Optimization. How did      it work? Simply put, online shopping cart value is shared via real-time pixels. By passing through actual online order values to the DataXu platform, we successfully optimized our campaign to meet true consumer values, for a much improved ROI.

This new approach that the DataXu team worked out for us resulted in CPAs that were 64% more efficient than optimizing on ordinary conversions, 60% more actions overall, and ROI that was 4x more than the control group which was optimizing on a simple conversion pixel fire. In other words, just optimizing to sales volume did in fact leave $ on the table. By using this new value-based approach, we were able to ensure we were driving the highest return with our media dollars". 
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