Advertising

Question 1

What are the types of digital ads?

Answer 1

Display Ads: Appear on websites or other online platforms in the form of images, graphics, videos, or interactive multimedia.

Search Ads: Text-based advertisements that appear on search engine results pages when users enter relevant queries.

Publisher Ads: Advertisements displayed on a publisher’s website or platform.

Question 2

Explain the Marketing Funnel

Answer 2

Represents the buying stages people go through after becoming aware of a business, service, or product.

• Awareness (Display Ads)
• Consideration (Display Ads)
• Comparison (Search Ads)
• Purchase (Search Ads)
• Recommend

Question 3

What’s Real-Time Bidding?

Answer 3

When the advertisers buy the ads, they will be making bids for ad slots that show up in real time.

User Visits a Website
Ad Exchange Auction
Advertisers Bid in Real-Time
Winning Bidder’s Ad Displayed

Audience > Publishers > Supply-Side Platform > Ad Exchange < Demand-Side Platform < Advertisers

Question 4

What’s Cookie Matching?

Answer 4

Process used in digital advertising to connect user data between different platforms or systems.

It involves the synchronization of unique identifiers, typically stored in browser cookies, to establish a link between the user profiles maintained by different entities such as advertisers or ad networks.

This process enables a more comprehensive understanding of user behavior across various touchpoints in the digital ecosystem.

Question 5

Attribution Methods: If the customer buys the product, how do we know which one of the ads they saw made the sell?

Answer 5

• Last Touch: whatever ad the customer saw the latest, is the one responsible for the purchase.
  It is not a perfect measure, since search ads tend to show later, which is going to overweight the effectiveness of search ads and limit the advertising.
• Multi-Armed Bandit: mathematical framework and a type of optimization problem often used in decision-making scenarios.
  It is a shortcut to optimize things, but it is not perfect.
• Modelling
• Experiments

Question 6

How do Search Ads Auctions work?

Answer 6

Decide on which position to appear. First positions will be more expensive.

The score ranks the companies (if they score best, they will show up first on the search).

Score = Quality × Bid

However, this is not how much the company actually pays.

CPC is going to be how much the Other Bider has to pay Google in order to make them indifferent between them and the original Firm.

CPC = (Quality (Firm) × Bid (Firm)) / (Quality (Other Bider)

Higher Quality (Other Firm) ⟹ Lower CPC
Higher Quality (Firm) / Higher Bid (Firm) ⟹ Higher CPC