Programmatic is eating the world. With more ad formats, data signals, and competitors than ever, smart marketers need to have the right strategy to succeed in the next generation of digital advertising. Joe Luchs from Beeswax will discuss modern optimization and the tactics sophisticated marketers are using to win.

1. Programmatic 2.0
Optimization for the Next Generation of
Digital Advertising

2. VP, Enterprise
Joe Luchs

3. 1994
The Genesis of Digital Advertising
44% CTR!

4. 2000
Ad Networks Take Shape

5. 2007
The Advent of Programmatic

6. 2013
Mobile Breaks $10B

7. 2016
Video Breaks $10B

8. 2016 2017 2018 2019 2020
$25.91
$36.31
$47.37
$57.35
$68.87
+47.1%
+40.2%
+30.5%
+21.1%
+20.1%
“Programmatic is Eating the World”
Today

9. Video Audio Display Mobile
Digital OOH CTV / OTT Linear Native
And It’s Only Getting More Complex

10. Optimization:
The Key to Success in the
New Era of Programmatic

11. op·ti·mi·za·tion
/ˌäptəməˈzāSHən,ˌäptəˌmīˈzāSHən/
noun
“Finding an alternative with the most cost
effective or highest achievable performance
under the given constraints, by maximizing
desired factors and minimizing undesired ones.”

12. So Why is Optimization
So Important?

13. Business Outcomes > Proxy Metrics
Incrementality
ROAS
The Value of Optimization
1
2
3

14. 1
Outcomes > Proxies
Optimize Towards True Goals
CTR / VCR
Viewability/
Time-in-view
CPA / CPI
ROAS / LTV / OFFLINE
INCREMENTALITY

15. 2
Drive Incremental Performance
Don’t Pay For Organic Actions
A B

16. 3
ROAS
Show Me the Money
=
Precision Results

17. The Way Forward:
A New Approach to Optimization

18. The Optimization Landscape
Standard
Strategies
Shared optimization
algorithms that are
great for upper-funnel

19. The Optimization Landscape
Standard
Strategies
Bid
Modifiers
Adjust bids against
any RTB input to
drive results
Shared optimization
algorithms that are
great for upper-funnel

20. Standard
Strategies
Get all the features
of a traditional DSP
on Day 1
Bid
Modifiers
Adjust bids against
any RTB input to
drive results
Bring Your Own
Algorithm
Upload multivariate
models directly to
the bidder
The Optimization Landscape

21. Nothing Exists in a Vacuum
The Importance of Multivariate Modeling

22. Key Factors that Power Optimization
The who, the where, the when, and the $$$
User
Data
T H E W H O
How valuable are
your customers?
Inventory
Factors
T H E W H E R E
How valuable is
the inventory?
Time
Decay
T H E W H E N
How long
has it been?
Price
Data
T H E $ $ $
How much is every
impression worth?

23. User Classification:
"Good"
Bidding Strategy:
Bid always
Users as Segments
User Classification:
"Bad"
Bidding Strategy:
Bid never
Users as Scores
User Classification:
Score 1.67 for
offer ABC
Bidding Strategy:
Increase bid
by 67%
User Classification:
Score 0.21 for
offer ABC
Bidding Strategy:
Decrease bid
by 79%
VS.

24. Platform Exchange domain value
iOS Rubicon nytimes.com 1.50
iOS Index cnn.com 2.50
Android Pubmatic cnn.co.uk 3.50
... ... ...
Android AdX axios.com 4.50
Multivariate Inventory Factors
Set bid prices based on a specific, verified inventory source

25. Time Matters!
Adjust your bid price based on engagement recency
Visited 5 minutes ago
Increase
Bid Price by
48%
=
Time Decay Bidding StrategyUser
Visited 2 days ago
Decrease
Bid Price by
23%
=

26. Real World Example
3.1 X
User is worth
average.
A user with 3 past purchases
just put $150 worth of goods in
their shopping cart
2.4 X
Recency is worth
average.
This same user appears
in a programmatic
auction 7 minutes later
1.1X
Site/Exchange/OS
combo is worth
average.
They appear on a low quality
site, in an urban geolocation,
on an iOS device
0.062%
Likelihood of
for conversion.
Based on historical data, a
$6.24 bid is warranted.

27. Auction-Level
Data
First-Party
Data
Real-World
Insights
● Wins
● Bids
● Conversions
Collect & Model Data
Combine data sets and build
multivariate models to predict
optimal bid price
Traffic Campaigns
Get results
Upload Model
Upload your
model
Create a
Feedback
Loop

28. Programmatic is More Complex Than Ever
Great Data and Optimization is Key
Flexible Tech Can Help You Win
Key Takeaways
1
2
3

29. Thank You!