Hope y’all are doing well. Thanks to all who provide their expertise and opinions in this community.
Earlier this week, I noticed a comment from Broadway Dan that I’ve wanted to respond to. The post was here: https://discussion.fool.com/hey-all-sorry-i-missed-that-others-p…, and the comment was:
“…the fact is programmatic ads are a theory that’s yet to be proven. We don’t know that some ads will be targeted with great precision and deliver incredible results.”
I’ve been in digital marketing for over a decade, including my current role as the Director of Digital Marketing for a financial institution. We have a seven-figure paid media budget that is tied directly to expectations for growth in loans and deposits. Most of those dollars go into programmatic advertising, and I can definitively say that it’s effectiveness is a reality. A little bit more detail…
When I first stepped into this role a few years ago, I learned that the paid media budget was driving hardly any loan or deposit applications through our website. We were spending a lot of moeny with little to show for it. For example, display ads were only tied to geographic targeting and very little other criteria. Our vendor and I quickly switched strategies.
We started an account on a programmatic ad-buying platform (a competitor to The Trade Desk) and added their analytics tracking to the end of the online application for each loan and deposit product. Let’s take mortgages as an example. Every time someone completed the online mortgage application, the platform added that user to an audience modeling pool. So, after five hundred people completed the online mortgage application, we had an “ideal prospect profile” based on those five hundred people. The profile could include age, sex, interests, propensity to be in the market for a house, and much more. And all of those factors of the profile were influenced by the actual people who were submitting a mortgage application.
How does the platform know those things about users? You know those websites you browse that serve up ads? There’s a high likelihood that this platform (or The Trade Desk or another platform) is paying those websites to serve ads to their users (thousands of sites), which means their code is on those sites. So, if you visit a dozen of those sites, the platform has placed a cookie in your web browser and knows your activity on those sites, thus creating a profile for you.
While we may have had an ideal prospect profile based on 500 applicants a while ago, that profile is dynamically updated every time someone else submits an online mortgage application. Good thing is that it’s not only applicants from paid media campaigns that influence the prospect profile.
Let’s say we run an email marketing campaign, targeting a subset of our existing customers that have been filtered for numerous criteria based on our internal data. Every one of those customers who fills out that mortgage application adds to the audience modeling (even though they didn’t come from a paid campaign) because the analytics tracking is at the end of the application for all users who get that far. In that scenario, we presumably made our audience modeling even stronger.
Here’s what a campaign looks like: We set a budget and a geographic boundary (a handful of counties, an entire state, etc.), and assign the audience model (mortgage applicants) to that geography. Every time someone in that geographic area hits any of those thousands of websites, the platform determines if the user fits the mortgage applicant profile. This determination happens in real time on every page load of every one of those websites. And all these platforms are competing for the same ad space in a matter of milliseconds. You and I may live across the street from each other and both browse ESPN.com on the same day, but we have unique profiles. So, you may see our mortgage ad, and I may see an ad for a sofa from Wayfair.
How do we know it works? We track cost-per-application (ad spend divided by total submitted applications), loan approval rates from underwriting, and loan booking ratios from credit administration. Over time, we have lowered cost-per-application, set records for application volume, and set records for digital loan & deposit growth. We’ve increased our paid media budget each year because of this success, winning over the support of our executives.
Last month, our vendor notified us that The Trade Desk is being added to their series of networks. They were really excited about this because, as they explained, it opens the door to more targeting techniques that our current network does not provide.
Hope this helps.
9.2% position in TTD