Alberto González Fernández

Alberto González Fernández

Senior Adtech Consultant

What is Custom Bidding?

5 January 2021
2 minutos
What is Custom Bidding?
New functionalities emerge every day that allow us to automate processes, save time and improve the quality of information through machine learning. Custom Bidding is a mixture of these characteristics, since unlike standard or automatic bids, with Custom Bidding we can customize the algorithm based on real business objectives. Through a script created in DV360, we will provide more knowledge to the algorithm to apply machine learning in an optimal and unique way for each client and campaign.  

What is Custom Bidding and how does it contribute to our campaigns?

Custom Bidding is able to combine our business insights with the Google algorithm. This union between our knowledge of the campaign and its objectives, added to Google’s machine learning, will allow us to align our goals with the advertiser’s business objectives.  

How does it work?

Very simple, the first thing we must do is ask ourselves two questions:

  • What is our goal? If our objective is a standard CPM, CB is not necessary. On the contrary, if we want to optimize towards other goals and KPIs we can consider CB as a solution,
  • Do we want to manage the campaign manually? In case our priority is not to manually configure bids and we prefer that Google’s algorithm maximize the effectiveness of our campaigns, we recommend applying CB.

Second, we identify the signals, we must set our objectives (KPIs), what we are measuring and how we are going to optimize based on it. This takes us to step three, the design of the script, to develop it it is not necessary to be a code expert, in the help center we can find information and practical examples about it. These are the 3 main aggregate models, each of them is applicable to the different use cases that we will discuss below:

  • Sum-aggregate: In all cases, add all the weights.
  • Max_Aggregate: In all cases, it only takes into account the maximum weight.
  • First_match_aggregate: All conversions, find the first interaction that occurs within the script sequence.

Once the script has been created in DV360, and assigned as a bid algorithm to our test insertion order (replacing the non-personalized options offered by the platform), the algorithm will optimize based on the rules established in our script. If we have already completed the previous steps, it is time to select our script as the bid algorithm within our insertion order and start checking results between the test Insertion Order and the new Insertion Order with the custom algorithm.  

Use cases

To help us better understand each possible scenario, we have 6 previously defined use cases:

  • Weighted Conversions: All goals contribute to the achievement of the final objective. We can give weights for each step of the conversion funnel, prioritizing those actions that have the most value for the advertiser.
  • Activity Value: Unlike weighing only based on specific events such as floodlights, this model allows us to optimize based on custom u-variables. That is, we can give different weights to our custom variables collected in Campaign manager to increase the profit.
  • Transaction ROAS: We can use the value of each product or service to adjust the value of sales. The advantage is in differentiating the sales values ​​by product, not all sales are worth the same.
  • Google Analytics: with GA360 we can weight based on different events within our site, as long as we have a premium account and we have all those goals configured. For example, users who have placed an order are more valued, or those who have spent more time browsing our website.
  • Brand Signals: We use branding signals such as viewability, full video, and others, to make the most of this knowledge in our campaigns.
  • Unified Conversions: With the help of Campaign Manager and Google Analytics we are able to collect all that information that we cannot measure only with floodlights. Example: in a case of weighted conversions, with offline conversion we give more weight to the one that has the most value. In this case, we can unify online and offline conversions under the same algorithm, being able to give them the same value.

Each of them is unique and will vary depending on the weighting we give to each step, action or sales values.  

Case of success

Currently, we have active several cases of advertisers with Custom Bidding, so we already have a base with which to move towards new projects. The most recent example is a banking client in which we have implemented the case of “weighted conversions”, where we weigh the steps prior to the conversion. We can ensure that the above premises are met, based on the results obtained to date. Real data:

  • With a lower investment and half the impressions issued, the Custom Bidding test is having overall CTRs 0.10 percentage points higher.
  • The most important fact is that the CPA of Custom Bidding is 30% lower than the CPA of the standard campaign.
  • The number of conversions in CB is 39% higher than in the standard insertion order.