Advertisers need to pay the data cost when they use third party provider’s data in their ad campaigns. Data cost calculation varies by the logic used to create the audience segment. The campaign managers should understand the data calculation conditions to reduce the overall campaign spend.
SRIDARAN B
If you have’t read my previous post : Who needs third party provider’s data? How to choose the right third party provider data for your ad campaign? then please read this post to understand better. Third party data provider’s data is very important to run effective ad campaigns. When advertisers use third party data then they should pay the data cost to the data provider. Many ad campaign platforms are currently available in the market and most of them follow the same data cost calculation method. To save the ad spend, the campaign managers should understand the data cost calculation. Here, I will explain to you the data cost calculation for various audience targeting conditions. But, you should check with your platform to make sure the data calculation method. This question is mostly asked in programmatic campaign manager’s interviews..
Topics Covered :
What are the common rules that can be followed to create an audience segment?
How data cost will be calculated for OR rule audience segment?
How data cost will be calculated for AND rule audience segment?
How to save money on segment creation?
In this post, i am giving examples based on categories but the same rules apply when you combine segments that have categories.
What are the common rules that can be followed to create an audience segment?
You must understand the common rules that can be allowed to create an audience segment to understand the data cost calculation. In ad platforms, many third party providers are available to create the segment. You can create segments by selecting categories from the same data provider or selecting categories from different data providers. Also, you can follow any logical conditions between categories to shorten the required group of audiences. Here, I will provide you with the best examples that will help you to understand better.
For example, your platform has two data providers, Lotame and Eyeota.
Lotame :
Age Targeting Category – Data Cost $1.5
Interest Targeting Category – Data Cost $2
Eyeota :
Age Targeting Category – Data Cost $2.5
Interest Targeting Category – Data Cost $3
Example 1 :
You are going to create the segment using the below condition,
Segment 1 :
Lotame Age Category 25 – 35
OR
Lotame Interest CategoLotame Luxury Interest Category
Segment 2 :
Lotame Age Category 25 – 35
OR
Eyeota Luxury Interest Category
In the above example, we are using OR conditions. In this condition, the impression will be delivered to the user who is available either in one category. So, when an incoming bid request is received from the user, the platform first checks the user’s availability in the first category (here age category), if the user is available then the platform responds to the bid request and the data cost will be added only for the age category if the impression is delivered.
If the user is not available in the age category then the platform looks at the second category (here luxury category). If a user is available in this category then the platform responds to the bid request and data cost will be added only for the luxury category and not for the first age category.
How data cost will be calculated for the OR rule based audience segment?
In the above example, we are using OR conditions. In this condition, the impression will be delivered to the user who is available either in one category. So, when an incoming bid request is received from the user, the platform first checks the user’s availability in the first category (here age category), if the user is available then the platform responds to the bid request and the data cost will be added only for the age category if the impression is delivered.
If the user is not available in the age category then the platform looks at the second category (here luxury category). If a user is available in this category then the platform responds to the bid request and data cost will be added only for the luxury category and not for the first age category.
How data cost will be calculated for the AND rule based audience segment?
When you use AND condition between the categories then the platform checks the user’s information from both categories. The platform only responds to the bid request only if the user is available in both categories. So, the data cost for each category in the AND condition will be added to the total data cost. So, data cost will be higher on AND condition based segment.
Conclusion: How to save money on segment creation?
This post will help you to understand the data cost calculation for the audience segment. Data cost is also the main factor for ad spend. To save money, you should take more care while setup the audience segment. When you setup the OR based audience segment, please keep the low cost categories on top and higher price categories in the bottom section. Platform normally checks the user availability by top to bottom search. So, if the user is available in the low cost category at the top then your data cost will be lowered. For AND condition based audience segments, the platform checks both categories. So, data cost is normally higher for AND segments.
