contextual data optimization

8/11/2019 Contextual Data Optimization

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The Hidden Power of Optimizingfor Competitive Spend, Weather,

and the Second Screen Effect

Six Advertising Best Practicesfor Contextual Data Optimization

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Copyright 2014 Marin Software Inc. All rights reserved. 2

The Hidden Power of Optimizing for Competitive Spend, Weather, and the Second Screen EffectSix Advertising Best Practices for Contextual Data Optimization

TABLE OF CONTENTS

Introduction 03

Identifying Use Cases for Contextual Data Optimization 04

Best Practices for Leveraging Contextual Data 11

Conclusion 12

About Marin Software 13


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INTRODUCTION

Marketers are always looking for better ways to understand and reach their targetaudience. Historical data has traditionally been the first thing marketers consider foranalyzing and forecasting performance trends, and it remains an important factor.However, as the digital marketing industry becomes increasingly sophisticated,marketers are beginning to recognize that there are a multitude of external factorsoutside of their direct control that can greatly affect their digital performance.Seemingly uncontrollable factors such as changes in weather patterns, TV audienceviewership and competitive responses can cause swings in consumer engagement,demand and purchase behavior on digital channels. In light of this, marketersincreasingly seek to incorporate insights and data from these external trends into theirdigital marketing strategy as a means of improving targeting and getting ahead of thecompetition.

The key to taking advantage of these external factors is the usage of contextual datafrom non-digital sources. Why is this new, cutting edge form of insight so important tomodern digital marketers? Put simply, contextual data provides an opportunity formarketers to capitalize on trends outside of their immediate purview of their campaignsand execute smarter optimization strategies based on the data that impacts theirbusiness.

Marketers are beginning to explore new ways of integrating these non-digital datasources that can provide them with more sophisticated insights, analytics andoptimization opportunities for their digital marketing campaigns. However, integratingthis data quickly and precisely has proven difficult for many marketers, especially thosewith complex marketing strategies involving many moving parts. Quick pivots arenecessary to reflect sudden shifts in market or consumer behavior, but can be verytime-consuming across numerous ad types, sizes, keywords, audiences, and multiplemanagement platforms. Third-party external data can also be a challenge to find. Andeven when it is obtained, correctly attributing these external factors, from weather orTV data or competitor data, to changes in impressions, clicks, or conversions can bedifficult. To further complicate things, acting on this external data in real-time iscrucial, as some external trends can emerge and end within hours. Luckily, there areservices that can help marketers easily integrate third party data into their marketingcampaigns.

The first step in this process is to identify and test out first and third party contextualdata integrations that are most relevant to a marketers business. There are manydifferent micro trends and factors to consider; some of these are predictable, but mostare highly varied. Additionally, the sheer number of potential factors can make itdifficult to determine how to bid at any given time. As a starting point, marketersshould ask themselves some key questions about which types of contextual data willhelp them better reach their target customers and drive sales. For example, how doesconsumer behavior change based on external factors? What sort of opportunities doesthis open up for marketers and how can a savvy marketer seize these opportunities?

Copyright 2014 Marin Software Inc. All rights reserved.


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Once these preliminary questions are considered, marketers can begin to scope out,design, and implement their contextual-data driven strategy that can positivelyinfluence their audience targeting, creative design, ad scheduling, and optimization

choices. Several common external factors that can influence a digital advertisersperformance are described below. Advertisers should identify the external trends thatcould impact their business and a digital marketing platform that can help transformthese seemingly uncontrollable trends into digital campaign optimization opportunities.

IDENTIFYING USE CASES FOR CONTEXTUAL DATA OPTIMIZATION

Weather-Driven Optimization

Weather changes such as temperature shifts or precipitation can have a significantimpact on consumer behavior, and ultimately campaign performance. For example,when ING integrated weather data into their ad targeting, they saw a 28% increase inwebsite visitors for their weather-based ads when compared to their control non-weather-based ads. 1 While weather patterns and seasons do provide historic insight intobuyer behavior on the macro level, smaller shifts and unexpected weather have beenknown to drive consumers towards action and therefore present opportunities for thesavvy marketer.

The digital marketing industry is gradually starting to increase its utilization of weatherdata as a key component of the optimization process. For example, leading weatherdata providers weather.com 2 and Accuweather 3 have started to provide data to digitaladvertisers as a means of informing marketing decisions. One such advertiser,Bravissimo, saw sales revenue of their swimwear line rise 600% after three monthswhen they began integrating weather data to adjust bidding and campaigns. 4

Bravissimo used WeatherFit to adjust their PPC search campaigns in real-time for twocampaigns based on local weather data to tailor online promotions and advertisementsto the individual user based on their location. Even though the weather during the threemonths of this campaign was rainy and sub-optimal, this integration helped Bravissimoincrease conversions by 103% for one campaign, and sales by 78% on another.Bravissimos senior marketing manager, Fiona Lomas, says, Using [weather data] tofine-tune our PPC advertising and promotions by taking into account local weatherconditions really boosted sales in the crucial run-up to the holiday season.

The way weather affects consumer behavior is something that varies wildly by industryand location. For instance, during the US Polar Vortex of sweeping cold conditions inJanuary 2014, there was a spike in search impressions in the travel vertical. Mostadvertisers did not anticipate this sudden uptick in consumers looking to travel, andtherefore missed out on the opportunity to respond accordingly. If they had accountedfor consumers staying indoors during the coldest days and searching online fromdesktops, then they would have been able to capture the demand during these crucialdays. On the other side of the equation, warmer conditions have a similar impact. Beer

1 http://appnexus.com/sites/default/files/ING-Mindshare-Bannerconnect-AppNexus-Case-Study.pdf 2 http://press.weather.com/press-releases/mindshare-and-weather-company-partner-bring-weather-insights/ 3 http://enterprisesolutions.accuweather.com/custom-business-analytics/weather-triggered-marketing4 http://internetret ailing.net/2012/12/bravissimo-says-weather-forecast-data-boosted-its-online-sales/


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brand Stella Artois found that when temperatures were two degrees higher than theseasonal norm, sales for its Cidre product rose. 5 With this information in mind, StellaArtois was able to adjust digital billboards to real-time temperature changes, only

displaying a Cidre ad when local temperatures were two degrees above the norm. Iftemperatures remained below that point, the Cidre ads were not served. This resultedin increased efficiency and lowered costs by pinpointing weather patterns that causedconsumer behavior to change, and only serving relevant ads when it was most effective.

5 http://www.marketingweek.co.uk/disciplines/data-/-crm-/-loyalty/how-the-weather-affects-marketing/4009284.article

2.36%

5.48%

10.29%

1.07%

7.90%

15.21%

Paris Lyon Marseille

Revenue Sales

This chart details the sales and revenue lift Rakuten saw on rainy days in France, when compared to non-rainy days.

Precipitation is another factor that plays into consumer behavior. Japanese e-commercecompany Rakuten conducted a study on temperature and precipitation to understandhow they affected sales in France. The findings were intriguing; in Paris, sales andrevenue increased slightly on days when rain occurred, but the increase was muchgreater in Lyon and Marseille. Rakuten reasoned that Parisians were more accustomedto rain, meaning that Parisian consumer behavior was minimally affected by theprecipitation compared to Lyons and Marseille. These increases were due to consumersstaying indoors due to rainy weather, and shopping online rather than in-store.


Sales and Revenue Lift on Rainy Days vs Clear Days


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When Rakuten examined how temperature played into consumer behavior, results weremore nuanced. In general, the colder it got, the more French consumers stayed indoorsand shopped online; however, the relationship between temperature and consumerbehavior was not always linear. Rakuten found that only Parisians bought less astemperatures rose in a linear pattern. In Lyon, revenue and sales followed a curve,dipping and then rising, before dipping again as temperatures increased. Meanwhile,revenue in Marseille dropped by 25% when temperatures rose above 10 degrees C, butremained static until 25 degrees C 6. This study illustrates how the impact of weather

changes on consumer behavior can vary greatly by region and culture. Of the weather-related variables examined in the study, temperature was shown to have the mostsignificant impact on consumer behavior, with people tending to stay indoors and shoponline more during extreme cold. These weather-related consumer tendencies directlyimpacted sales and revenue, by driving up sales the colder it was outside. Whileweather changes may not impact the behavior of consumers in every industry, thefindings demonstrate the importance of integrating weather data into digital campaigns.Marketers need to understand how different weather conditions affect their targetconsumer behavior and optimize their bids and budgets accordingly.

The above-mentioned examples are only a small part of how weather can influence

consumer behavior and buying behavior and provide targeting opportunities for digitaladvertisers. Consider pollen data, which could be crucial for consumers with allergies,or wind speed which may impact whether audiences stay indoors or venture out.Marketers need to examine how weather fluctuations influence consumer behavior.Savvy marketers are learning how weather influences their target audience by comparingexternal weather data against performance, understanding the patterns, and adjustingbids and creative when buying activities change.

6 http://www.journaldunet.com/ebusiness/commerce/meteo-e-commerce.shtml

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Television-Driven Optimization

The relationship between television viewership and digital advertising has becomeincreasingly apparent. Research has already shown that TV ads boosts online traffic 7

and searches 8 and that there are significant increases in online search for brandedkeywords within hours of a related advertisement showing on television. 9 A similarstudy measured the impact of television advertising on the volume of Google searches,and found that the greatest impact occurs that same day or sometimes in the hoursfollowing the original viewing. 10 Nielsen estimates over 40% of consumers have amobile device in hand while watching television to engage with social media or search,and they predict there will be a further move to the middle, or convergence acrosstelevision and online platforms. 11 Facebook calls this phenomenon the second-screeneffect and it signals a significant change in consumer behavior. Studies of highly-televised events have shown that social media engagement during these events isespecially high, with millions of people interacting on Facebook and Twitter duringevents like the Oscars.

7 http://www.slideshare.net/rebeccaalig/how-tv-advertising-affects-online-search8 http://searchengineland.com/can-tv-advertising-really-impact-search-performance-1453929 http://rady.ucsd.edu/faculty/seminars/papers/television-influence-search.pdf 10 https://econ.duke.edu/uploads/assets/ClippCeleste.pdf 11 http://www.nielsen.com/us/en/newswire/2014/video-convergence-buying-selling-and-trusting-across-platforms.html12 http://insights.marinsoftware.com/trends/car-companies-win-super-bowl-2/

35.5%38.6%

29.0%

78.7%

Impressions Clicks CPC Spend

This chart depicts the lift seen by US auto advertisers on Google during Super Bowl Sunday, when compared to the prior two weeks.

Sporting events, like the Super Bowl and the World Cup, are excellent examples of howtelevision viewership can affect Search. In 2014, auto advertisers bet heavily ontelevision spots during the Super Bowl, and the bet paid off. During and immediatelyafter the game, auto advertisers saw a 36% and 39% increase in search impressionsand clicks, respectively 12 , when compared to the prior two weeks. Jaguars ad drove20,000 visits to the website within minutes after airing. Many of these advertisers havealso recognized the second-screen effect during these events as well, with 57% of

Auto Industry Search Liftduring Super Bowl Sunday 2014


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the television ads having hashtags for consumers using mobile devices. 13 These studiesshow that successful television advertising is no longer simply about whom can deliverthe best commercial, as marketers must now learn to combine both television and

digital advertising to reach their audience effectively.

Looking beyond sporting events, there are many examples of how everyday television ononline advertising can affect consumer behavior. Ubisoft recently partnered withFacebook on coordinating video advertising between Facebook and television for theirAssassins Creed 4 campaign. They did this through careful timing of digital advertisingon Facebook with conventions and television ad flights. Their integrated TV andFacebook advertising strategy resulted in astounding success, with 57% of their targetaudience reached and engaged during the campaign, and a 12-point lift in ad recall.These results suggest that a cross-channel approach helps marketers reinforce admessaging for consumers, aiding in ad campaign recall and engagement. The apparent

second-screen effect of the study is one possible explanation for the results, with47% of ad impressions served on mobile devices. 14 The results highlight an opportunityfor marketers to use Nielsen TV ratings data and ad flight data to understand theiraudience, and from there, coordinate digital advertising on social media and search inorder to capture that audience while their audience is receptive.

13 http://www.adweek.com/news/advertising-branding/play-play-jaguars-super-bowl-social-media-lair-15545314 https://www.facebook.com/business/success/ubisoft

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CPC Email Organic Referral

TV Flight

When looking at the impact of TV advertising, search traffic increased by 1525% over the 4 weeks when TV ad flights occurred.source: http://searchengingland.com/can-tv-advertising-really-impact-search-performance-145392

Visits by Channel


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To get ahead of the competition, marketers should take advantage of the apparentsynergies between television and digital media from a consumer standpoint. They mustlook at the data from both mediums in a consolidated format and analyze it together,

rather than as two separate mediums. Marketers should collect data on their targetaudience television viewership, understand how that affects their search, display, andsocial behavior, and adjust ad bidding with this information in mind. Television adflights should be used to predict when the consumers will see the ads and search forthe brand online.

Customer-Review Driven Optimization

Another relevant example of contextual data that can be harnessed by advertisers andused to gain a competitive advantage is customer feedback. For example, positive ornegative reviews of a brands products or services can have a significant effect on thebehavior of potential customers in the future. Online customers pay close attentionto reviews during the purchase cycle and use them to inform their buying decisions,especially in the travel industry. According to comScore, consumers were willing to payat least 20% more for services receiving an excellent rating than for the same servicereceiving a good rating, signaling an important shift in consumer behavior based ononline customer reviews. 15

These statistics suggest that the implications of customer reviews are significant formarketers. If captured and analyzed at scale, customer reviews can be useful forunderstanding consumer behavior and to serve relevant ads that have a higher chanceto capture the attention of buyers. When marketers are trying to understand their targetaudience, they should look at their audiences product reviews, which provide valuableinsight into what their consumers respond to and hint at what they will be interestedin. For example, a hotel room broker would want to display ads that have the highestchance of conversion or click-through. However, buyer behavior can vary wildly. Byusing customer review data, a broker can understand what type of hotel room differentaudiences are most likely to be interested in. Thus, they can display the ad that hasthe highest chance of conversion. By using data on the best-reviewed hotel rooms forthe consumers demographic, the broker can ensure the best possible room is servedto the consumer, thus maximizing the chance of click-through and conversion. Ascustomer reviews are a critical driver of customer behavior, marketers should leveragefeedback data into making more informed digital marketing decisions. At the very least,reviews can help marketers understand what a consumer is looking for and guidetargeting and optimization of creative messages.

15 https://www.comscore.com/Insights/Press-Releases/2007/11/Online-Consumer-Reviews-Impact-Offline-Purchasing-Behavior



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Inventory-Driven Optimization

Most product-oriented marketers operate in a world of supply versus demand. Whendemand for products is high, marketers often become more aggressive with theiradvertising efforts in order to drive the greatest amount of sales possible. Othermarketers elect to increase prices in times of high demand in order to increase profitmargins, at the expense of volume. Conversely, when demand is low for products,advertisers often become more conservative with their advertising spend to increasemargin and or decrease prices in order to increase volume. While these widelyunderstood concepts sound basic in theory, in practice they can be difficult toimplement at scale. Marketers with access to inventory data can automate theiradvertising based on changes in supply and demand. Advertisers that can improveconsumer targeting and dynamically optimize toward both supply and demand stand togain both profit margin and volume.

There are many practical use cases for applying using product inventory to shapemarketing campaign optimization decisions. For example, if inventory has run out ata brands brick-and-mortar store, it may make sense to use that knowledge to pausemobile campaigns for that particular product in that region, due to mobile deviceshaving a higher incidence of leading to in-store purchases versus desktop devices. Thisleads to cost savings and increased efficiency by eliminating spending for ads that haveno chance of providing a retailer with revenue. In addition, different geographic regionsmay differ in demand and profitability by items, and adjusting bids to accommodatethese differences can help to improve the efficiency and targeting relevancy formarketing campaigns. Time-sensitive products, such as flight or event tickets, are alsoan important source of data for marketers. Marketers should increase bids as expirationdates draw closer, to prioritize these products above those with later expiry dates. Oncea flight or event has passed, they should also stop the relevant campaign.

Competitor-Driven Optimization

Brands often rely on competitive information as a key factor in shaping their marketingstrategy. In particular, most search, social, and display advertisers monitor themaneuvers of their competitors on a regular basis as a means of informing creative,bidding, and keyword expansion decisions. Though monitoring the competition is acritical component of any marketing strategy, doing so at scale across millions ofkeywords, creative, and audiences can prove challenging. To overcome these challenges,

many marketers have partnered with leading third party competitive intelligenceplatforms like SpyFu or AdGooroo which provide spend levels, keyword lists and bidaverages for competitors.

Advertisers can automatically optimize their programs based on competitive contextualdata captured by these third party systems. For example, a retailer may be particularlyinterested in knowing when a major competitor holds promotions so they can respondaccordingly at similar times and bid lower or higher to meet these competitive


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challenges. Marketers should also be aware of the keywords the competition is biddingon and add keywords that are relevant or increase bids on highly competitive non-branded terms that are important to both companies.

Additional Opportunities for Contextual Data-Driven Optimization

The proceeding examples represent only a few of the many potential contextual datasources that influence todays consumers and that can help marketers betterunderstand and forecast audience behavior. Stock prices and financial markets affectconsumer confidence, which can impact many industries in varying ways, such asincreased interest in luxury goods during strong financial periods, or staple goodsduring poor. Trending topics on social media can create unexpected marketingopportunities for savvy advertisers. Even sports scores play a role in consumer behavior,and understanding and incorporating this data can be important in many verticals.

Incorporating all these disparate data sources can be a huge challenge for marketers.While it is relatively simple to perform one-off changes to a single campaign, onceadvertisers attempt cover all trends at all levels within their entire program in real-time,campaign management and optimization at scale can be challenging. Using a platformthat has the ability to integrate contextual data from multiple sources, map it againstkeywords, creative, and audiences, and automatically automate bidding, can be a realadvantage for marketers looking to understand how consumer behavior changes basedon external factors. How should marketers adjust bids if there are external weatherand event influences affecting a certain region? What about if the local team makes abig win? These are challenges that marketers will be faced with more and more, ascontextual data becomes increasingly important to understanding consumer behavior.

Many marketers strive toward optimizing using contextual data, but many struggle withactual implementation. For the marketer that is looking to start integrating externaldata into their marketing campaigns, what should they do?

BEST PRACTICES FOR LEVERAGING CONTEXTUAL DATA

1. Identify sources. As explained in the above examples, every advertiser has contextualdata sources which are more relevant and appropriate for their business. It is important toidentify which sources impact the consumer behavior of the advertisers target customerdemographic the most. Weather data can be a big factor for the retail and travel industry,while financial data may be more important for the finance industry.

2. Build upwards. Begin integrating contextual data in your campaigns slowly and in only afew select campaigns. It is far more efficient to integrate and optimize contextual dataone by one, rather than integrating it all at once. With slow, gradual integration, itbecomes easier to connect consumer behavior to performance data and adjust biddingaccordingly. If you start too broadly, it can become confusing to determine what datasignals which change. Only when each contextual data source is optimized should it berolled out across all campaigns.


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3. Combine contextual data rules with algorithmic bidding. If your platform allows contextualdata integration, create rules that adjust bidding based on key trends spotted. These rulesare a great supplement to an automated bidding algorithm. While an algorithm can beused to bid towards a certain objective, contextual data rules will help marketers takeadvantage of unexpected spikes or drops in consumer behavior, allowing for essentialquick pivots in real-time bidding. These can be changes in buying patterns or increaseddemand. Understanding how the contextual data matches with fluctuations in consumerbehavior is important when setting these rules.

4. Associate contextual data. Contextual data is not always relevant to every part of acampaign. For instance, some product lines may be more responsive to weather, whereasothers may be more year-round or be less prone to fluctuations. Make sure that contextualdata is linked to relevant campaigns, and also make sure not to go overboard byassociating contextual data across all campaigns if unnecessary.

5. Update often. Contextual data needs to be updated often due to its very dynamic nature.

Micro trends can last for hours or days, so your data source needs to be refreshed often tostay up-to-date. Stale information causes sub-optimal bidding, which defeats the purposeof using contextual data in the first place. Update data regularly and often to maintainoptimal performance.

6. Monitor, measure, and optimize. It is important to constantly monitor performance datato understand if the adjustments to your bidding strategies are working. Contextual dataevolves over time so your strategy must adapt along with it. Results can be unexpected,and unintuitive, so keeping an eye on actual numbers allows marketers to adjust for theunexpected. Consistent monitoring and measuring also helps marketers know whichcampaigns are currently working the best, which require further optimization, and whichshould be stopped.

CONCLUSION

Contextual data is the next logical step for savvy marketers looking to understand andreach their audience. Being able to tie contextual data in with audience data helpsmarketers understand consumer intent, which leads to better optimized marketingcampaigns. The impact of these disparate factors can mean increased efficiency andsales and revenue for a marketer who can understand how this data reflects changes inconsumer behavior and capture audience attention at crucial moments.


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(415) 399-2586 123 Mission Street,[email protected] 25th Floorwww.marinsoftware.com San Francisco, CA 94105

ABOUT MARIN SOFTWARE

With more than $6 billion in annualized advertising spend, Marin Software (NYSE: MRIN)

is the leading digital ad management platform in the world. Offering an integrated platformfor search, display, social, and mobile advertising, Marin helps the worlds best brands andagencies simplify their advertising workflow while dramatically increasing ad performance.Powering advertising campaigns in more than 160 countries, Marins technology transformsdata into insights and complexity into opportunity for hundreds of global advertisers andagencies. For more information about Marins solutions, please visit:www.marinsoftware.com/solutions/overview.

Marin Softwares Context Connect functionality allows marketers to easily integratecontextual data from a variety of sources to adjust bids. The Dynamic Actions featurecan help you optimize your marketing strategy by boosting bids up or down based onthis external data. While integrating all this contextual data into a marketing campaignmay seem complicated at first, Marins solution compartmentalizes it and makes itsimple and fast for the marketer, increasing efficiency for the while improving theirbidding strategies.

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