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BizReport : Advertising archives : July 28, 2011

DataXu uses DSP to enhance consumer response

Demand-Side Platforms (DSP) aren't just for advertising placements any longer. New information from DataXu shows how some brands are using DSPs not just to enhance advertising impressions but to learn how to engage consumers who may be more valuable to the brand.

by Kristina Knight

"The Pareto Principle holds that 80% of a company's revenue typically comes from 20% of their customers," said Sandro Catanzaro, Vice President of Analytics and Innovation at DataXu. "Yet many advertisers make the mistake of equally chasing all of them. Advertisers focused solely on CPA are likely wasting a lot of money converting lower value customers. Today's sophisticated marketers are looking beyond simple conversions and reallocating much of their spend to convert higher spending and more valuable customers."

DSPs traditionally optimize ad placements, to better engage consumers, but through DataXu's study, researchers optimized shopping carts according to consumers' recent purchases. They found these optimizations increased ad spend by 30% (Financial Services verticals) and 80% (Technology verticals). Through the optimization, budgets were changed so that more ad dollars were spent on 'valuable' customers - those thought to spend more money - than on less valuable customers, and converted between 25% and 45% more 'high value' customers.

A forecast from ZenithOptimedia expects the global online ad spend to increase by 4% this year; in the US, online ad spending is expected to reach more than $470 billion. That is a pre-recessionary number. Paid Search ($35 million) and Display ($25.2 million) will account for most ad dollars, but a growing number of brands are pushing dollars into social marketing - through branded social pages, display ads within social networks and 'sponsored' type listings on sites like Facebook and Twitter.

Researchers say that social media usage has increased 25% (Year over Year), accounting for about 16% of the time users are online and 34% of display ad impressions.

Tags: advertising analytics, consumer analytics, DSPs, online advertising

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