Make The Most of Your Ad Spend: A Practical Guide to Modern Bidding Strategies

The digital advertising landscape can feel overwhelming. There’s a constant stream of data, new platforms, and a whole lot of jargon. But at its core, advertising is about connecting with people and achieving real business results. And to do that effectively, you need to understand bidding strategies. 

That’s what we are here to unpack. You want to know how to make your ad dollars work harder, so we’re going to dive into practical, actionable insights that you can apply to your campaigns. Think of this as your friendly guide to navigating the often-confusing world of digital bidding.

Why Bidding Strategies Matter More Than Ever

The days of advertising without a strategic approach are long gone. In today’s dynamic market, success hinges on choosing a clear strategy and the right tools to execute it. We’re no longer limited to basic metrics like click-through rates (CTR) or cost per acquisition (CPA) as the sole indicators of success. While those still have their place, we can now dig deeper and truly align our bidding strategies with our business objectives. Once a solid strategy is in place, modern advertising platforms can automate much of the execution and optimization.

Today, we need bidding strategies that are as dynamic and nuanced as the market itself. We need to understand why we’re advertising, who we’re trying to reach, and how we want our campaigns to impact our bottom line. For example: why are you advertising? Is it to drive brand awareness, increase sales, generate leads, or something else entirely? Your bidding strategies should directly support those goals. 

Three Flavors of Bidding: Which One Is For You?

Think of bidding strategies like ordering from a menu. There’s something for everyone, whether you want a quick snack or a multi-course meal. We can broadly categorize them into three groups:

#1 Off-The-Shelf: Quick and Easy Solutions

These are your “grab and go” options. They’re easy to implement, often with just a click of a button. Think traditional metrics like CPM or CPA. They’re great for basic outcomes, like driving traffic or generating conversions.

• ‍Example: You’re running a simple banner ad campaign to drive website traffic. Choosing a CPC strategy might be sufficient to get your message out there and reach a wide audience.

In today’s complex ecosystem, these strategies can still provide quick and easy solutions for many campaigns. They are simple to implement and excellent for achieving basic outcomes like driving traffic or conversions. While they might not be the only solution you’ll ever need, they offer a solid foundation. For instance, emerging channels like CTV, which is often used for brand awareness rather than direct response, can be a starting point. You can still use basic metrics, but you might want to layer in more sophisticated approaches later to truly maximize your impact. 

• ‍Example: You’re running a CTV campaign and want to leverage Automatic Content Recognition (ACR) data to suppress households that have already seen your linear TV ads, maximizing incremental reach and avoiding wasted impressions. 

Some platforms even use predictive technology to model audiences and optimize for this. While these strategies are quick and easy, you can always expand upon them to craft a strategy that truly complements your overall media mix.

#2 First-Party Data: Unlock Your Advantage

Your first-party data is incredibly valuable. It’s the information you have about your customers – their purchase history, demographics, loyalty status, lifetime value, engagement patterns, and more. Companies are increasingly harnessing this data to drive business growth. This data can be a game-changer for your bidding strategies.

• ‍Example: You’re a retailer with a loyalty program. You know that members in the “Platinum” tier who frequently purchase product X are also highly likely to purchase product Y. You can use this insight to target Platinum members who have purchased product X with ads for product Y, increasing cross-selling opportunities and driving additional sales.

This is where audience segmentation comes into play. By modeling your first-party customer data against your DSP partner’s data, you can go beyond finding potential customers – you can find the right potential customers. It’s about personalization and relevance, which lead to better campaign results.

• ‍Example: Imagine you’re launching a new premium product. You can use your first-party data on those customers as a seed. Analyze their characteristics and behaviors to predict which non-customers share similarities and are likely to become your next affluent customer. Then, target those predicted audiences across your digital campaigns to reach potential new high-value customers.

#3 Customization: Take Control And Drive Innovation

Sometimes, off-the-shelf and even first-party data strategies aren’t enough. You might have unique insights or complex objectives that require a more hands-on approach. That’s where customization comes in.

• ‍Example: You want to aggressively bid during peak hours (e.g., evening) and on specific devices (e.g., mobile) where people are most likely to make impulse purchases. You can set up rules within your DSP to automatically adjust bids based on these conditions.

Or maybe you have multiple objectives of driving sales, increasing website visits, and building brand awareness. You can work with your DSP partner to create a blended strategy that combines different algorithms and data points to achieve all your goals simultaneously. For the truly data-savvy, you can even bring your own algorithms to the table. This approach requires expertise but can lead to exceptional results. Customized strategies allow you to tailor your bidding approach to your exact requirements, whether that’s optimizing for multiple KPIs simultaneously or integrating your own algorithms for advanced control.

Yahoo DSP: Your Partner in Performance

Choosing the right bidding strategy is crucial, and having the right partner is equally important. Yahoo DSP provides a comprehensive suite of solutions designed to empower your bidding success.

We’re built on a foundation of rich data and premium supply, which fuels powerful performance. With Yahoo Blueprint Performance, you get a faster feedback loop and turbocharged results across all strategies. Whether you’re looking to maximize CTV reach, increase customer value, or achieve multiple objectives simultaneously, we have the tools and expertise to help you succeed.

What sets Yahoo DSP apart is our commitment to providing choice and control to our customers. We understand that every advertiser is unique, and we offer the flexibility to tailor our solutions to your specific needs. You can choose your desired level of algorithmic customization, ensuring you have the control you need to achieve your goals.

Key Takeaways for Bidding Success:

• Define Your Objectives: Clearly define your advertising goals before selecting a bidding strategy.
• Leverage Your Data: Leverage your first-party data to personalize your campaigns and target the right audience.
• Choose The Right Approach: Select a bidding strategy that aligns with your objectives and comfort level with customization.
• Partner with the Right Platform: Work with a DSP that offers transparency, flexibility, and powerful performance capabilities.

It’s time to take control of your bidding strategies and unlock the full potential of your ad spend. With the right approach and the right partner, you can achieve your advertising goals and drive real business results.