Decode the Bidding Strategy for Demand Side Platform

Bidding-Strategy-for-Demand-Side-Platform-

Initiating your work into the programmatic world can be confusing; Different ad templates, new market trends, loads of new advertising opportunities, might ask you where to go?
DSP (Demand side platform), SSP (Supply Side Platform), and DMP (Data Management Platform) are the vital entities into the process of Digital Advertising. A new paradigm for marketers to explore.

Bidding Strategy for Demand Side Platform

Let’s take a look at how these terms can help you elevate your audience engagement, and tracking.

Demand Side Platform: Shoppers Site for Marketers

A Demand Side Platform (DSP) is a program which allows the advertiser to buy advertising space. This allows the user/advertiser to get automation on buying digital ads with higher audience interaction.

The working process for DSP is about selecting an appropriate network of publishers and placement of the respective ad.

The exact process is as following:

Process of Demand Side Platform

Fig: Process of Demand Side Platform from Advertisers initial step to the placement of an Ad on the relevant platform.

Some examples of DSP are: The Trade Desk, Adform , DV360, Adobe Advertising Cloud, Criteo, Google Ads these are the few top DSP platforms used worldwide.

Bidding Strategy for Demand Side Platform

While choosing bidding strategy for demand side platform an advertiser should mainly consider their respective campaign goals, and following factors:-

  • Pacing Score – It is a measurement of maintenance of how Ad line is using budget respective to its planned delivery schedule.
  • Base Bids – These are the cost per thousand impressions or clicks, that advertisers pay for Ad or creative.
  • Submitted Bids – They are the offers or choices that advertisers or DSPs provide in return to an Ad exchange or SSP (Supply Side Platform) request.
  • Delivery Expectations – These are the expected goals of the advertiser, which includes, timely delivery, real-time tracking, flexible delivery choices, forthright communication, and reforming the mistakes.
  • Viewability – It is the measurement of the rate of how often the targeted audience is able to see the ad, instead of just reloading the website or app.
  • Audience – A group of customers with a similar range of interests, habits, and behaviours relevant to the market.
  • Frequency Capacity – It explains the appearance of ad to the same in a given time period.

Data Management System

Seven Wonders of Bidding Strategy of Demand Side Platform

Following are the top 7 Bidding Strategies of Demand Side Platform, which are used world-wide for Programmatic Advertising.

1. Enhanced CPC (Cost Per Click) aka ECPC

It works by initially using manual or ideal bids, and adjusting them according to every click converting into sales.

Lets see how does ECPC works,

ECPC, or Enhanced CPC, uses machine learning to analyze previous campaign data and forecast which types of clicks are likely to convert for a successful conversion.

After analysing it enhances the bid for those successive clicks and decreases the bid for those clicks that are less likely to lead into conversion.

Main goal of ECPC is to get more conversions at the same cost-per-conversion rate. It plans to keep your average CPC lesser than the maximum CPC you set for the campaign. This is considered as the top most bidding strategy for demand side platforms.

Benefits:
To get maximum conversions from the ideal rate of bidding.
To work along with existing bidding patterns.
Provide user-friendly campaign settings.

Factors that affect the succession rate are:
Clicks
Budget
Conversion tracking of the audience
Goal of the campaign

2. Maximizing Clicks

It focuses on collecting as many clicks as possible.

Working of Maximizing Click is as following:

The system analyzes your campaign’s keywords and competition and adjusts bids to enable advertisers to pay appropriate and relevant amounts for each click they collect. This strategy ranks as the No. 1 bidding strategy for demand side platforms in 2024.

Pros:
It is a quick learning and quick -scale strategy

Cons:
It produces cheap traffic at average placement
This is not available for DNC (Display Network Campaigns) which are associated with marketing objectives or App campaigns.

3. Maximizing Conversions

It works by adjusting the bids with a goal of conversion, by focusing on sales and leads, which tend to be likely profitable.

This strategy uses artificial intelligence to optimize bids to produce most of the conversions according to your budget. This is most likely to be successful for the advertisers.

4. Ideal (Manual) CPC Bidding

It works by providing full control to the advertisers to control their bids and set a maximum CPC budget for each keyword.

It allows you to set relevant prices for each click on your ads.

Ideal (Manual) CPC Bidding

 

 

Benefits:

  • Allocate your budget regarding the engagement of your keywords.
  • Get impressive value due to pay only when a viewer is interested in the policy.
  • Revert any blunders.

5. Target Impression Analysis

It primarily focuses on targeting specific position or audience and their presence in SERP (Search Engine Research Page)

It is primarily used for campaigns with large scale brands, or when you are planning to compete with your competitors. Which essentially helps you to prioritize your budget focusing on analysis of valuable impressions.

Target impression share bidding, is a primary Google Ads service strategy, to explore more, give a try to this blog.

6. Target CPA (Cost Per Action)

It is an automated bidding strategy applied in ads which helps you get conversions at or below a target cost.

It uses machine learning and data to analyse and find the best bid for your ad, by setting high bid value for valuable clicks and low bid value for less valuable clicks.

Users primarily use it for single or multiple campaigns. In applications, it can help with cost per install or cost per in-app action.

Google Ads primarily uses this strategy when you work on a single campaign or a portfolio strategy for multiple campaigns.

Points to be noted for this are:
Plan and set up conversion rate tracking for your audience.
Generate 15+ conversions in 30 days.

7. Target ROAS (Return On As Spend)

Google Ads specifically designs this bidding strategy to maximize conversion value while reaching the target return on ad spend (ROAS).

It utilizes predictive modeling to assess the potential revenue generated by each user interaction. After analysis it adjusts your bids for the searches to increase return on them.

It automatically optimizes bids to maximize ROI.

It is majorly beneficial for businesses with high variable value in sales, like e-commerce stores. Because here you set specific goals for each product category.

Calculate ROAS:
Calculating ROAS of your campaign can give you exact result of your spent budget on your ad campaign –

Formula –
ROAS (return on ad spend) = (Generated Revenue from Ad Campaign / Ad Spend amount) x 100

Example: If your amount spent on the campaign is $8000 and generated final revenue is $40,000, your ROAS for the campaign is 500%.
This will be your successful ROAD.

400% or more is considered a good ROAS.

Conclusion

As many marketers, businesses and advertisers are now-a-days opting to choose programmatic advertising for their manual and organic growth of audience and real-time tracking of the audience, DSP and SSP are the foremost standing in line to help you with your digital advertisement. From choosing the correct bidding strategy for demand side platform, to delivering you exactly the point to measure each and every step of your audience and their conversion on the campaign. These strategies can be helpful for your ad campaigns to create the expected result for your business with increase in conversion rate and your revenue.

Alok Chakraborty
Alok Chakraborty
With years of experience in the lifestyle, hospitality, and fashion industries, Alok has curated content for Forbes India, JW Marriott, Tech Mahindra, and the University of Berkeley. A die-hard Manchester United fan, an avid reader, and a crime-documentary binger, he merges his passion with his flair for writing. Alok pairs up his research with critical analysis.

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