Digital advertising has never been more competitive and marketers need every
edge they can get. Conversion optimization is one such edge over competitors
that are available. In fact, marketers can now use conversion tracking and
optimization in demand-side platforms (DSPs). This can result in a better return
on investment (ROI).
What is a Conversion in Digital Advertising?
Conversions in digital marketing are actions that users take after visiting a digital marketing channel.They can be tracked with conversion tracking pixels (code placed on the webpage) or postback URLs (appending a URL with a custom string containing data, often using macros). Conversions can include:
- Signing up for a newsletter
- Buying something from an ecommerce store
- Filling out a contact form
- Clicking a call-to-action
It is of paramount importance that conversions be tracked accurately. For example, if the goal of an advertisement campaign is to get signup for a newsletter, the conversion pixel would go on the thank you/successful signup page, not the page with the form on it. If the conversion was tracked with a postback URL, the link would have the postback code appended to it. This way, only successful signups trigger the pixel, not every visit to the page with the signup form on it.
How to Track Conversions?
Conversion tracking pixel
Global postback URL
Postback URL conversion tracking works by appending a string to the end of the URL once a conversion has been activated and loaded by the browser. This is what a sample postback URL looks like:
In your tracking software that supports postback URLs, you would place this URL string and change [CLICK_ID] to your software’s appropriate click ID. You would also change the price variable (XXX) to a dynamic variable with a macro in your tracking software if possible. More information can be found in the documentation for your tracking software. ReklamStore’s postback URL documentation can be found here.
What is Conversion Optimization?
Conversion optimization is the process by which a digital advertising campaign is optimized to get more visits that are more likely to become conversions. Both advertising platforms like Facebook, AdWords, and DSPs like Mediamath, Rocket Fuel, Adform, and ReklamStore DSP offer conversion optimization features.These features work behind the scenes, comparing data about users who successfully completed conversions to try to create more conversions with other, similar users.
Conversion optimization can increase ROI and simplify advertising campaign management for digital marketers. For example, if a marketer is only tracking conversions by looking at how many people end up at a successful newsletter signup page with Google Analytics, they will have no idea about what makes that person unique, why they completed the conversion (newsletter signup),
and why the other thousand people who also clicked on the ad did not. Conversion optimization works behind the scenes and looks for similarities between users with anonymized data.
How Conversion Tracking Affects KPIs?
Key performance indicators (KPIs) are used in digital marketing to determine how successful an advertising campaign is. These can include but are not limited to:
- Effective Cost Per Thousand Impressions (eCPM)
- Revenue Per Thousand Impressions (RPM)
- Cost Per Thousand Impressions (CPM)
- Cost Per Click (CPC) or Pay Per Click (PPC)
- Cost Per Action (CPA) or Cost Per Conversion
- Click Through Rate (CTR)
- Conversion Rate (CVR)
By using a tracking pixel or postback URL, it is possible for a DSP or advertising platform to know which specific advertisements and user profiles result in conversions. Without conversion tracking, you and the ad platform does not really know what is working towards achieving your KPIs. Ultimately, it does not matter how cheap your CPC bid price is if the people seeing your ads never complete your calls-to-actions. What truly matters is that you have clearly definable conversions that you can back into your ROI formula and then are getting those conversions at an effective price.
A number of advertising platforms offer conversion tracking. These include:
- Google Adwords (now Google Ads)
- Yahoo Gemini
- ReklamStore DSP
- And many, many more
Without conversion tracking, the advertising platform or DSP can only optimize for the lowest CPM or CPC, even if that means no conversions actually take place. This means less profit and potentially a negative ROI. Ultimately KPIs are just benchmarks and cannot substitute for ROI, only guide marketers towards a better ROI if interpreted correctly.
What is a Demand Side Platform (DSP)?
A demand side platform or DSP is a relatively new digital advertising technology. It allows digital marketers to run advertisement campaigns across a wide range of ad platforms, publisher websites, and apps, all automatically, from one dashboard. In the past, the sales team at a publisher would make a deal with the buying team at an advertiser for X ad impressions at Y price over Z time. This worked well in the earlier days of the Internet. Now, advertising technology has improved to the point where the majority of advertising sales are done programmatically (automated by a computer system).
This was first facilitated by advertising exchanges. DSPs are the next step in this evolution. DSPs combine the available ad inventory from multiple advertising platforms, publishers themselves, and supply side platforms (SSPs). They allow media buyers to buy ad impressions from much larger pools of publishers, often at better prices, and from a single dashboard. SSPs are basically the opposite of DSPs. They are used by publishers to connect their ad impression inventories to advertising networks, advertising
platforms and DSPs. That ad impression inventory is then purchased by advertisers via DSPs.
How to Optimize Campaigns for Conversions on a DSP?
The first step to optimizing conversions with a DSP is figuring out your KPIs and creating a ROI formula. This is essential to maximize profit on the DSP. For example, if your website sells widgets at $X, you need to figure out how much profit there is selling them at $X. The profit formula is P=R-C (profit equals revenue minus cost). Cost can be further broken down into fixed and variable costs but that is beyond the scope of this article. For this example we will say that the widgets are being sold at $10 apiece and the profit on each one is $5.
In the DSP dashboard, you would then create a conversion tracking pixel or postback URL that is set to say each successful conversion (purchase of a widget) is worth $5. Then you would setup your campaign targeting and place that conversion tracking pixel in the header HTML of the successful purchase page on your website (not necessary with postback URLs, if the server is configured). Once the campaign starts, the DSP would then optimize to only display ads to people most likely to convert, or purchase a widget.
It may take time, but by using the initial targeting parameters and displaying the ads, over time the DSP can figure out similar users to those who converted and prioritize showing them the ads, within the boundaries of not costing more than $5 per conversion. This ensures a positive ROI and maximizes profit on the DSP. With a traditional advertising platform, this is much, much harder to achieve, as there is not an actual dollar value assigned to the conversion.
There are also steps you can manually take to help optimize your campaigns for conversions. The simplest method is to make sure you start with as much advertising inventory available as possible by selecting as many SSPs that fit your campaigns’ parameters (language, location, etc.) as possible. Once you have data in your DSPs dashboard of which SSPs are resulting in the most profitable conversions, you can start to cut SSPs that are underperforming.
Starting with higher bids for impressions can also help. As each advertiser is competing for the same ad placements, higher bids can result in higher quality ad placements. Of course, it does not make sense to raise your bids to the point where even a successful conversion still results in a net loss.
Other steps you can take to optimize your conversions with a DSP are making sure your targeting is correct (not too restrictive and not too open) and no sensitive categories were selected when creating your campaigns, whitelisting top performing domains, blacklisting underperforming domains, and checking your frequency caps (the number of times an individual can see the same advertisement). Finally, optimizing your ad’s creative can increase the click-through-rate and make sure only qualified leads click-through. While click-bait ads might generate a good CTR in the short-term, in the long term they will damage your brand. They also perform poorly when it comes to getting someone to actually successfully complete a conversion after they click-through your ad.
Advantages of Using ReklamStore DSP for Conversion Optimization
ReklamStore DSP offers a number of advantages over advertising platforms, advertising networks and other DSPs. These include:
- Conversion tracking via conversion pixel
- Postback URL conversion tracking (a more sophisticated system that doesn’t require a tracking pixel be placed on a website)
- Ad fraud detection with Forensiq, Fraudlogix, Integral Ad Science and proprietary systems
- Premium advertising impression inventory
- Whitelisting and blacklisting of domains
- Excellent customer support and service
- 3rd party tag support
- Advanced targeting options
- And much more!
While programmatic advertising can be confusing when starting out or learning new techniques, fortunately ReklamStore DSP offers excellent customer support and help to get you started maximizing your profit with conversion optimization.