Test hypotheses and algorithms before investing money in them automate the analysis of advertising according to the specifi criteria in order to purchase on more favorable terms acquire an algorithm for finding a relevant audience 03 Results Budget protection.
Advertising agency refus to
Invest in an algorithm that didn’t work Process automation. Content provider automat data analysis for advertising purchases Ready algorithm. The company receiv an algorithm for finding a relevant audience Advertising Agency Refus to Invest in an Algorithm That Didn’t Work An agency from Spain makes money by selling ads.
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The company buys ads from platforms with the pay-per-impression model (CPM) and sells with the pay-per-action model (CPA) — when only target user actions are paid for, such as downloading, subscribing or registering.
The problem is there are no
Resources for hypothesis testing — neither a team with the necessary experience nor a ready-made software solution. One of the ways to increase income is to learn how to show ads to audience members that are more likely to perform the target action. This is help by algorithms that set the criteria for displaying content. Agency mathematicians have hypothesiz a new algorithm.
As plann, it should optimize traffic for smartphones and tablets so that users take more target actions. A single hypothesis is obviously not enough to say with certainty whether the algorithm will work or not.
Everything nes to be test. Otherwise there is a risk of investing in a solution that doesn’t change anything. Companies can test hypotheses using their own resources. This requires programmers, testers, and analysts.
Another option is to hire an
External team that specializes in b2b marketing for technology companies: 10 strategies for checking algorithms. The agency doesn’t have a hypothesis testing team, so it would have to be hir. In this case, testing would take about two years: first, you find specialists, immerse them in the process and features of the algorithms, develop a program for testing — and only then do you conduct tests.
This decision is also affect by the budget: according to the agency, it would have to spend $ 200,000 on salaries. $ 200,000 Would be the cost of developing the technology to test the hypothesis Solution: Delegate Hypothesis Testing.
The agency turn to
OrbitSoft to test the hypothesis for sale lead the new algorithm. We already have a solution for such problems, so we went to work immiately. Bas on our Demand-Side-Platform Product (DSP), we develop technology that can test a mathematical model. It took us 1.5 months and $ 20,000 from the customer to develop it. $ 20,000 Was the cost of hypothesis testing for the company Result: With the help of ready-made technology, the customer test the model on real users, in real time.
It took 4 months to verify it, and during this time the company realiz that the algorithm was economically unprofitable — they could not achieve the plann conversion with it. Despite the fact that the algorithm didn’t work, the company still got their result.
They discover that their hypothesis didn’t help them target more accurately, so there was no point in investing in this algorithm. It would be better to develop and test another one. The company also sav money.
If they had test the hypothesis
Using their own resources, they would have spent up to two years and up to $ 200,000. This way the project took less than six months and cost one tenth the price. Comparison: Cost and Time for Algorithm Testing Time frame for getting the result Budget If the company test with its own resources 2 years ≈ 200 thousand dollars.
Testing with OrbitSoft’s resources 1.5 months — technology development 3 months — testing ≈ 20 thousand dollars Technical Features of the Project: Buying Traffic CPM calculation method. Historical CPM (pay-per-view) data was us.
CPMA — average value from the
Start of the advertising campaign to the current moment with coefficient k1 CPMB — average value of CPM for the last hour with coefficient k2 CPMC – average CPM value for the last hour with coefficient k3 Final formula: Dynamic.
CPM The limits of the values of the coefficients: Price 90% – at a fix CPM price 10% for each advertising platform — at a dynamically determin CPM price Optimization: 60% – at a fix CPM price 40% of traffic for each advertising platform — at a dynamically determin CPM price If it wasn’t possible to buy out at the dynamic CPM price on a certain site, then every 10 minutes the price increas to the threshold value.
When the threshold
CPM value was exce, the site was exclud from traffic purchases. Dynamic Purchasing: 80% of purchases — at a dynamically determin CPM price 20% – at a fix CPM price. The dynamic CPM price is calculat separately for each site.
During the process of buying traffic, the CPM threshold value is monitor: if the price exces the limit, the site is exclud from traffic purchases. Content Provider Automat Data Analysis for Advertising Purchases This company creates content for mobile operators, such as videos, GIFs, games, and so on.
