Video Advertisers Can Optimize Google Auction Model on Forbes

September 10, 2018

By Ryan Vaspra

Ryan Vaspra is the Senior Vice President for Media Strategy and Analytics at Sightly, a performance-based video advertising platform.

Google advertising uses an auction model comprised of sealed bids, meaning that brands bidding on advertising inventory don’t know how much other brands have bid on that same inventory. This model also consists of a welfare payout from winners to losers, and a bidder matching component to ensure that participants feel the system is balanced, trustworthy and winnable. The objective of this economic dynamic is to encourage fairness and credibility while limiting unfair advantages in balance with a brand’s own profit yields.

Advertisers have many ways to win within this framework, provided they adapt performance models, not unlike how investment banks function in securities.

As the lead of media strategy and analytics for a video advertising platform that focuses on people-centered advertising, I’ve seen what works — and what doesn’t — in the Google marketplace.

Misconceptions About Online Video

Some conversion-focused marketers harbor reservations about video advertising rooted in search marketing and its emphasis on clicks. But an over-reliance on clicks as a metric misunderstands how viewers interact with videos. Whether objectives are reach, brand lift, actions or leads, know that clicks are truly a visitation metric.

For example, studies have shown that bumper ads, YouTube’s six-second ads, perform particularly well as part of a broader advertising campaign with 15- and 30-second ads. As part of these larger campaigns, bumper ads are effective brand awareness vehicles that improve the engagement of their 15- and 30-second counterparts.

The Continuing Growth Of Online Video

Google Marketplace is the world’s largest advertising marketplace, and Google is the world’s most used search engine, followed by YouTube, which is regularly launching new ad formats.

The opportunities in video advertising are staggering, particularly on YouTube. The video platform’s base of 1.8 billion users is massive and growing at a breakneck pace, almost twice as fast as Facebook. According to Zenith’s Online Video Forecasts 2018, “global consumers will spend an average of 67 minutes a day watching online video this year, up from 56 minutes last year.” More telling, however, is that number is expected to climb to 84 minutes a day, with markets like China, Russia and the UK topping out at 105, 102 and 101 minutes a day, respectively.

As YouTube content continues to grow exponentially, we’re now also seeing content creators extend the length of their videos to accommodate YouTube’s algorithm, which shows preference to more meaningful views. In other words, online video is not just growing; its growth is accelerating, with ad spend for online video predicted to grow 19% this year and 17% in 2020.

Optimize Or Opt Out

The opportunities and ROI for online video ads are there for the taking, but to benefit from them, especially from the YouTube model and marketplace, you must optimize. Online video optimization falls into two buckets: understanding the medium and understanding data.

Understanding The Medium

This means knowing the marketplace, its advertising formats and how consumers are interacting with these formats.

For example, I mentioned above how impactful bumper ads can be, especially in tandem with longer advertising formats (15- and 30-second videos, specifically). The same source showed that 15-second ads performed best among these three formats when not in conjunction with another format.

However, there is no format or length combination that is categorically most effective every time. The tools you employ depend on your campaign’s objectives each and every time you are active. For example, a bumper ad isn’t intrinsically more effective than other ad formats, but it can be very effective in the scenario outlined above.

Another consideration is the fact that skippable ads, such as TrueView ads, can improve efficiencies and offer additional opportunities to optimize.

Skippable ads give viewers more opportunities to customize their advertising experience, which, in turn, provides advertisers with more data on consumer preferences and behaviors. The more viewers can customize their experience (even if this means skipping an ad), the more advertisers can tailor the messages in ways that will resonate.

For example, at Sightly, we are observing that for the first time ever, longer ads are performing better than shorter ads: 15-second ads are averaging close to 40% viewer completion rate, and 50% of viewers are not skipping 30-second ads.

How these different ad formats are utilized, then, depends on budget, objectives of the campaign, and taking into account how and when they perform best. Different tools boast different strengths in different contexts.

Understanding Data

The second element of optimization refers to the data. Thanks in no small part to GDPR, the industry is quickly moving toward high-quality, first-party data, something that will inherently improve the quality of views.

Whether or not you’re subject to GDPR, brands should perform data cleanses to make sure their databases are up to date. It can be difficult to see your database dwindle, but the engagement with your audience will certainly rise if you’ve taken pains to ensure that your subscribers have expressly opted in to give persona, demographic and psychographic profile information.

Optimization boils down to understanding the science behind your data. Simply put, you optimize based on your campaign objectives and audience. Keep your publishers, ad formats, ad targeting, devices, time series and creatives as the flexible components of your optimization plan. The more those can compete against your key performance indicators, the better performance you will yield over time.

The era of cookie-based, third-party data being resold without due diligence is over. This is the era of people-based marketing, whereby those who capture data properly, target meticulously and give their audience what they actually want will come out on top.

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