Contextual Data Optimization

The Hidden Power of Optimizing
for Competitive Spend, Weather,

and the Second Screen Effect
Six Advertising Best Practices
for Contextual Data Optimization
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Copyright 2014 Marin Software Inc. All rights reserved. 2
The Hidden Power of Optimizing for Competitive Spend, Weather, and the Second Screen Effect
Six Advertising Best Practices for Contextual Data Optimization
TABLE OF CONTENTS
Introduction 03
Identifying Use Cases for Contextual Data Optimization 04
Best Practices for Leveraging Contextual Data 11
Conclusion 12
About Marin Software 13
3
INTRODUCTION
Marketers are always looking for better ways to understand and reach their target
audience. Historical data has traditionally been the first thing marketers consider for
analyzing and forecasting performance trends, and it remains an important factor.
However, as the digital marketing industry becomes increasingly sophisticated,
marketers are beginning to recognize that there are a multitude of external factors
outside of their direct control that can greatly affect their digital performance.
Seemingly uncontrollable factors such as changes in weather patterns, TV audience
viewership and competitive responses can cause swings in consumer engagement,
demand and purchase behavior on digital channels. In light of this, marketers
increasingly seek to incorporate insights and data from these external trends into their
digital marketing strategy as a means of improving targeting and getting ahead of the
competition.
The key to taking advantage of these external factors is the usage of contextual data
from non-digital sources. Why is this new, cutting edge form of insight so important to
modern digital marketers? Put simply, contextual data provides an opportunity for
marketers to capitalize on trends outside of their immediate purview of their campaigns
and execute smarter optimization strategies based on the data that impacts their
business.
Marketers are beginning to explore new ways of integrating these non-digital data
sources that can provide them with more sophisticated insights, analytics and
optimization opportunities for their digital marketing campaigns. However, integrating
this data quickly and precisely has proven difficult for many marketers, especially those
with complex marketing strategies involving many moving parts. Quick pivots are
necessary to reflect sudden shifts in market or consumer behavior, but can be very
time-consuming across numerous ad types, sizes, keywords, audiences, and multiple
management platforms. Third-party external data can also be a challenge to find. And
even when it is obtained, correctly attributing these external factors, from weather or
TV data or competitor data, to changes in impressions, clicks, or conversions can be
difficult. To further complicate things, acting on this external data in real-time is
crucial, as some external trends can emerge and end within hours. Luckily, there are
services that can help marketers easily integrate third party data into their marketing
campaigns.
The first step in this process is to identify and test out first and third party contextual
data integrations that are most relevant to a marketers business. There are many
different micro trends and factors to consider; some of these are predictable, but most
are highly varied. Additionally, the sheer number of potential factors can make it
difficult to determine how to bid at any given time. As a starting point, marketers
should ask themselves some key questions about which types of contextual data will
help them better reach their target customers and drive sales. For example, how does
consumer behavior change based on external factors? What sort of opportunities does
this open up for marketers and how can a savvy marketer seize these opportunities?
Copyright 2014 Marin Software Inc. All rights reserved.
4
Once these preliminary questions are considered, marketers can begin to scope out,
design, and implement their contextual-data driven strategy that can positively
influence their audience targeting, creative design, ad scheduling, and optimization
choices. Several common external factors that can influence a digital advertisers
performance are described below. Advertisers should identify the external trends that
could impact their business and a digital marketing platform that can help transform
these seemingly uncontrollable trends into digital campaign optimization opportunities.
IDENTIFYING USE CASES FOR CONTEXTUAL DATA OPTIMIZATION
Weather-Driven Optimization
Weather changes such as temperature shifts or precipitation can have a significant
impact on consumer behavior, and ultimately campaign performance. For example,
when ING integrated weather data into their ad targeting, they saw a 28% increase in
website visitors for their weather-based ads when compared to their control non-
weather-based ads.
1
While weather patterns and seasons do provide historic insight into
buyer behavior on the macro level, smaller shifts and unexpected weather have been
known to drive consumers towards action and therefore present opportunities for the
savvy marketer.
The digital marketing industry is gradually starting to increase its utilization of weather
data as a key component of the optimization process. For example, leading weather
data providers weather.com
2
and Accuweather
3
have started to provide data to digital
advertisers as a means of informing marketing decisions. One such advertiser,
Bravissimo, saw sales revenue of their swimwear line rise 600% after three months
when they began integrating weather data to adjust bidding and campaigns.
4
Bravissimo used WeatherFit to adjust their PPC search campaigns in real-time for two
campaigns based on local weather data to tailor online promotions and advertisements
to the individual user based on their location. Even though the weather during the three
months of this campaign was rainy and sub-optimal, this integration helped Bravissimo
increase conversions by 103% for one campaign, and sales by 78% on another.
Bravissimos senior marketing manager, Fiona Lomas, says, Using [weather data] to
fine-tune our PPC advertising and promotions by taking into account local weather
conditions really boosted sales in the crucial run-up to the holiday season.
The way weather affects consumer behavior is something that varies wildly by industry
and location. For instance, during the US Polar Vortex of sweeping cold conditions in
January 2014, there was a spike in search impressions in the travel vertical. Most
advertisers did not anticipate this sudden uptick in consumers looking to travel, and
therefore missed out on the opportunity to respond accordingly. If they had accounted
for consumers staying indoors during the coldest days and searching online from
desktops, then they would have been able to capture the demand during these crucial
days. On the other side of the equation, warmer conditions have a similar impact. Beer
1 http://appnexus.com/sites/default/files/ING-Mindshare-Bannerconnect-AppNexus-Case-Study.pdf
2 http://press.weather.com/press-releases/mindshare-and-weather-company-partner-bring-weather-insights/
3 http://enterprisesolutions.accuweather.com/custom-business-analytics/weather-triggered-marketing
4 http://internetretailing.net/2012/12/bravissimo-says-weather-forecast-data-boosted-its-online-sales/
5
brand Stella Artois found that when temperatures were two degrees higher than the
seasonal norm, sales for its Cidre product rose.
5
With this information in mind, Stella
Artois was able to adjust digital billboards to real-time temperature changes, only
displaying a Cidre ad when local temperatures were two degrees above the norm. If
temperatures remained below that point, the Cidre ads were not served. This resulted
in increased efficiency and lowered costs by pinpointing weather patterns that caused
consumer behavior to change, and only serving relevant ads when it was most effective.
5 http://www.marketingweek.co.uk/disciplines/data-/-crm-/-loyalty/how-the-weather-affects-marketing/4009284.article
2.36%
5.48%
10.29%
1.07%
7.90%
15.21%
Paris Lyon Marseille

Revenue Sales
This chart details the sales and revenue lift Rakuten saw on rainy days in France, when compared to non-rainy days.
Precipitation is another factor that plays into consumer behavior. Japanese e-commerce
company Rakuten conducted a study on temperature and precipitation to understand
how they affected sales in France. The findings were intriguing; in Paris, sales and
revenue increased slightly on days when rain occurred, but the increase was much
greater in Lyon and Marseille. Rakuten reasoned that Parisians were more accustomed
to rain, meaning that Parisian consumer behavior was minimally affected by the
precipitation compared to Lyons and Marseille. These increases were due to consumers
staying indoors due to rainy weather, and shopping online rather than in-store.
Sales and Revenue Lift on Rainy Days vs Clear Days
6
When Rakuten examined how temperature played into consumer behavior, results were
more nuanced. In general, the colder it got, the more French consumers stayed indoors
and shopped online; however, the relationship between temperature and consumer
behavior was not always linear. Rakuten found that only Parisians bought less as
temperatures rose in a linear pattern. In Lyon, revenue and sales followed a curve,
dipping and then rising, before dipping again as temperatures increased. Meanwhile,
revenue in Marseille dropped by 25% when temperatures rose above 10 degrees C, but
remained static until 25 degrees C
6
. This study illustrates how the impact of weather
changes on consumer behavior can vary greatly by region and culture. Of the weather-
related variables examined in the study, temperature was shown to have the most
significant impact on consumer behavior, with people tending to stay indoors and shop
online more during extreme cold. These weather-related consumer tendencies directly
impacted sales and revenue, by driving up sales the colder it was outside. While
weather changes may not impact the behavior of consumers in every industry, the
findings demonstrate the importance of integrating weather data into digital campaigns.
Marketers need to understand how different weather conditions affect their target
consumer behavior and optimize their bids and budgets accordingly.
The above-mentioned examples are only a small part of how weather can influence
consumer behavior and buying behavior and provide targeting opportunities for digital
advertisers. Consider pollen data, which could be crucial for consumers with allergies,
or wind speed which may impact whether audiences stay indoors or venture out.
Marketers need to examine how weather fluctuations influence consumer behavior.
Savvy marketers are learning how weather influences their target audience by comparing
external weather data against performance, understanding the patterns, and adjusting
bids and creative when buying activities change.
6 http://www.journaldunet.com/ebusiness/commerce/meteo-e-commerce.shtml
0
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60
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<5 5-10 10-15 15-20 20-25 25-30
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Temperature (Celsius)

Paris
Lyon
Marseille
This chart examines how revenue changes based on temperature, based on a report from Rakuten. Revenue is normalized at the <5 mark.
Revenue by Temperature
7
Television-Driven Optimization
The relationship between television viewership and digital advertising has become
increasingly apparent. Research has already shown that TV ads boosts online traffic
7
and searches
8
and that there are significant increases in online search for branded
keywords within hours of a related advertisement showing on television.
9
A similar
study measured the impact of television advertising on the volume of Google searches,
and found that the greatest impact occurs that same day or sometimes in the hours
following the original viewing.
10
Nielsen estimates over 40% of consumers have a
mobile device in hand while watching television to engage with social media or search,
and they predict there will be a further move to the middle, or convergence across
television and online platforms.
11
Facebook calls this phenomenon the second-screen
effect and it signals a significant change in consumer behavior. Studies of highly-
televised events have shown that social media engagement during these events is
especially high, with millions of people interacting on Facebook and Twitter during
events like the Oscars.
7 http://www.slideshare.net/rebeccaalig/how-tv-advertising-affects-online-search
8 http://searchengineland.com/can-tv-advertising-really-impact-search-performance-145392
9 http://rady.ucsd.edu/faculty/seminars/papers/television-influence-search.pdf
10 https://econ.duke.edu/uploads/assets/ClippCeleste.pdf
11 http://www.nielsen.com/us/en/newswire/2014/video-convergence-buying-selling-and-trusting-across-platforms.html
12 http://insights.marinsoftware.com/trends/car-companies-win-super-bowl-2/
35.5%
38.6%
29.0%
78.7%
Impressions Clicks CPC Spend
This chart depicts the lift seen by US auto advertisers on Google during Super Bowl Sunday, when compared to the prior two weeks.
Sporting events, like the Super Bowl and the World Cup, are excellent examples of how
television viewership can affect Search. In 2014, auto advertisers bet heavily on
television spots during the Super Bowl, and the bet paid off. During and immediately
after the game, auto advertisers saw a 36% and 39% increase in search impressions
and clicks, respectively
12
, when compared to the prior two weeks. Jaguars ad drove
20,000 visits to the website within minutes after airing. Many of these advertisers have
also recognized the second-screen effect during these events as well, with 57% of
Auto Industry Search Lift
during Super Bowl Sunday 2014
the television ads having hashtags for consumers using mobile devices.
13
These studies
show that successful television advertising is no longer simply about whom can deliver
the best commercial, as marketers must now learn to combine both television and
digital advertising to reach their audience effectively.
Looking beyond sporting events, there are many examples of how everyday television on
online advertising can affect consumer behavior. Ubisoft recently partnered with
Facebook on coordinating video advertising between Facebook and television for their
Assassins Creed 4 campaign. They did this through careful timing of digital advertising
on Facebook with conventions and television ad flights. Their integrated TV and
Facebook advertising strategy resulted in astounding success, with 57% of their target
audience reached and engaged during the campaign, and a 12-point lift in ad recall.
These results suggest that a cross-channel approach helps marketers reinforce ad
messaging for consumers, aiding in ad campaign recall and engagement. The apparent
second-screen effect of the study is one possible explanation for the results, with
47% of ad impressions served on mobile devices.
14
The results highlight an opportunity
for marketers to use Nielsen TV ratings data and ad flight data to understand their
audience, and from there, coordinate digital advertising on social media and search in
order to capture that audience while their audience is receptive.
13 http://www.adweek.com/news/advertising-branding/play-play-jaguars-super-bowl-social-media-lair-155453
14 https://www.facebook.com/business/success/ubisoft
60%
70%
80%
90%
100%
110%
120%
130%
140%
1 2 3 4 5 6 7 8 9 10
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Week
CPC Email Organic Referral
TV Flight
When looking at the impact of TV advertising, search traffic increased by 1525% over the 4 weeks when TV ad flights occurred.
source: http://searchengingland.com/can-tv-advertising-really-impact-search-performance-145392
Visits by Channel
9
To get ahead of the competition, marketers should take advantage of the apparent
synergies between television and digital media from a consumer standpoint. They must
look at the data from both mediums in a consolidated format and analyze it together,
rather than as two separate mediums. Marketers should collect data on their target
audience television viewership, understand how that affects their search, display, and
social behavior, and adjust ad bidding with this information in mind. Television ad
flights should be used to predict when the consumers will see the ads and search for
the brand online.
Customer-Review Driven Optimization
Another relevant example of contextual data that can be harnessed by advertisers and
used to gain a competitive advantage is customer feedback. For example, positive or
negative reviews of a brands products or services can have a significant effect on the
behavior of potential customers in the future. Online customers pay close attention
to reviews during the purchase cycle and use them to inform their buying decisions,
especially in the travel industry. According to comScore, consumers were willing to pay
at least 20% more for services receiving an excellent rating than for the same service
receiving a good rating, signaling an important shift in consumer behavior based on
online customer reviews.
15
These statistics suggest that the implications of customer reviews are significant for
marketers. If captured and analyzed at scale, customer reviews can be useful for
understanding consumer behavior and to serve relevant ads that have a higher chance
to capture the attention of buyers. When marketers are trying to understand their target
audience, they should look at their audiences product reviews, which provide valuable
insight into what their consumers respond to and hint at what they will be interested
in. For example, a hotel room broker would want to display ads that have the highest
chance of conversion or click-through. However, buyer behavior can vary wildly. By
using customer review data, a broker can understand what type of hotel room different
audiences are most likely to be interested in. Thus, they can display the ad that has
the highest chance of conversion. By using data on the best-reviewed hotel rooms for
the consumers demographic, the broker can ensure the best possible room is served
to the consumer, thus maximizing the chance of click-through and conversion. As
customer reviews are a critical driver of customer behavior, marketers should leverage
feedback data into making more informed digital marketing decisions. At the very least,
reviews can help marketers understand what a consumer is looking for and guide
targeting and optimization of creative messages.
15 https://www.comscore.com/Insights/Press-Releases/2007/11/Online-Consumer-Reviews-Impact-Offline-Purchasing-Behavior
Inventory-Driven Optimization
Most product-oriented marketers operate in a world of supply versus demand. When
demand for products is high, marketers often become more aggressive with their
advertising efforts in order to drive the greatest amount of sales possible. Other
marketers elect to increase prices in times of high demand in order to increase profit
margins, at the expense of volume. Conversely, when demand is low for products,
advertisers often become more conservative with their advertising spend to increase
margin and or decrease prices in order to increase volume. While these widely
understood concepts sound basic in theory, in practice they can be difficult to
implement at scale. Marketers with access to inventory data can automate their
advertising based on changes in supply and demand. Advertisers that can improve
consumer targeting and dynamically optimize toward both supply and demand stand to
gain both profit margin and volume.
There are many practical use cases for applying using product inventory to shape
marketing campaign optimization decisions. For example, if inventory has run out at
a brands brick-and-mortar store, it may make sense to use that knowledge to pause
mobile campaigns for that particular product in that region, due to mobile devices
having a higher incidence of leading to in-store purchases versus desktop devices. This
leads to cost savings and increased efficiency by eliminating spending for ads that have
no chance of providing a retailer with revenue. In addition, different geographic regions
may differ in demand and profitability by items, and adjusting bids to accommodate
these differences can help to improve the efficiency and targeting relevancy for
marketing campaigns. Time-sensitive products, such as flight or event tickets, are also
an important source of data for marketers. Marketers should increase bids as expiration
dates draw closer, to prioritize these products above those with later expiry dates. Once
a flight or event has passed, they should also stop the relevant campaign.
Competitor-Driven Optimization
Brands often rely on competitive information as a key factor in shaping their marketing
strategy. In particular, most search, social, and display advertisers monitor the
maneuvers of their competitors on a regular basis as a means of informing creative,
bidding, and keyword expansion decisions. Though monitoring the competition is a
critical component of any marketing strategy, doing so at scale across millions of
keywords, creative, and audiences can prove challenging. To overcome these challenges,
many marketers have partnered with leading third party competitive intelligence
platforms like SpyFu or AdGooroo which provide spend levels, keyword lists and bid
averages for competitors.
Advertisers can automatically optimize their programs based on competitive contextual
data captured by these third party systems. For example, a retailer may be particularly
interested in knowing when a major competitor holds promotions so they can respond
accordingly at similar times and bid lower or higher to meet these competitive
challenges. Marketers should also be aware of the keywords the competition is bidding
on and add keywords that are relevant or increase bids on highly competitive non-
branded terms that are important to both companies.
Additional Opportunities for Contextual Data-Driven Optimization
The proceeding examples represent only a few of the many potential contextual data
sources that influence todays consumers and that can help marketers better
understand and forecast audience behavior. Stock prices and financial markets affect
consumer confidence, which can impact many industries in varying ways, such as
increased interest in luxury goods during strong financial periods, or staple goods
during poor. Trending topics on social media can create unexpected marketing
opportunities for savvy advertisers. Even sports scores play a role in consumer behavior,
and understanding and incorporating this data can be important in many verticals.
Incorporating all these disparate data sources can be a huge challenge for marketers.
While it is relatively simple to perform one-off changes to a single campaign, once
advertisers attempt cover all trends at all levels within their entire program in real-time,
campaign management and optimization at scale can be challenging. Using a platform
that has the ability to integrate contextual data from multiple sources, map it against
keywords, creative, and audiences, and automatically automate bidding, can be a real
advantage for marketers looking to understand how consumer behavior changes based
on external factors. How should marketers adjust bids if there are external weather
and event influences affecting a certain region? What about if the local team makes a
big win? These are challenges that marketers will be faced with more and more, as
contextual data becomes increasingly important to understanding consumer behavior.
Many marketers strive toward optimizing using contextual data, but many struggle with
actual implementation. For the marketer that is looking to start integrating external
data into their marketing campaigns, what should they do?
BEST PRACTICES FOR LEVERAGING CONTEXTUAL DATA
1. Identify sources. As explained in the above examples, every advertiser has contextual
data sources which are more relevant and appropriate for their business. It is important to
identify which sources impact the consumer behavior of the advertisers target customer
demographic the most. Weather data can be a big factor for the retail and travel industry,
while financial data may be more important for the finance industry.
2. Build upwards. Begin integrating contextual data in your campaigns slowly and in only a
few select campaigns. It is far more efficient to integrate and optimize contextual data
one by one, rather than integrating it all at once. With slow, gradual integration, it
becomes easier to connect consumer behavior to performance data and adjust bidding
accordingly. If you start too broadly, it can become confusing to determine what data
signals which change. Only when each contextual data source is optimized should it be
rolled out across all campaigns.
3. Combine contextual data rules with algorithmic bidding. If your platform allows contextual
data integration, create rules that adjust bidding based on key trends spotted. These rules
are a great supplement to an automated bidding algorithm. While an algorithm can be
used to bid towards a certain objective, contextual data rules will help marketers take
advantage of unexpected spikes or drops in consumer behavior, allowing for essential
quick pivots in real-time bidding. These can be changes in buying patterns or increased
demand. Understanding how the contextual data matches with fluctuations in consumer
behavior is important when setting these rules.
4. Associate contextual data. Contextual data is not always relevant to every part of a
campaign. For instance, some product lines may be more responsive to weather, whereas
others may be more year-round or be less prone to fluctuations. Make sure that contextual
data is linked to relevant campaigns, and also make sure not to go overboard by
associating contextual data across all campaigns if unnecessary.
5. Update often. Contextual data needs to be updated often due to its very dynamic nature.
Micro trends can last for hours or days, so your data source needs to be refreshed often to
stay up-to-date. Stale information causes sub-optimal bidding, which defeats the purpose
of using contextual data in the first place. Update data regularly and often to maintain
optimal performance.
6. Monitor, measure, and optimize. It is important to constantly monitor performance data
to understand if the adjustments to your bidding strategies are working. Contextual data
evolves over time so your strategy must adapt along with it. Results can be unexpected,
and unintuitive, so keeping an eye on actual numbers allows marketers to adjust for the
unexpected. Consistent monitoring and measuring also helps marketers know which
campaigns are currently working the best, which require further optimization, and which
should be stopped.
CONCLUSION
Contextual data is the next logical step for savvy marketers looking to understand and
reach their audience. Being able to tie contextual data in with audience data helps
marketers understand consumer intent, which leads to better optimized marketing
campaigns. The impact of these disparate factors can mean increased efficiency and
sales and revenue for a marketer who can understand how this data reflects changes in
consumer behavior and capture audience attention at crucial moments.
2014 Marin Software. All rights reserved. Other trademarks belong to their respective owners. WP 387_072214
(415) 399-2586 123 Mission Street,
info@marinsoftware.com 25th Floor
www.marinsoftware.com San Francisco, CA 94105
ABOUT MARIN SOFTWARE
With more than $6 billion in annualized advertising spend, Marin Software (NYSE: MRIN)
is the leading digital ad management platform in the world. Offering an integrated platform
for search, display, social, and mobile advertising, Marin helps the worlds best brands and
agencies simplify their advertising workflow while dramatically increasing ad performance.
Powering advertising campaigns in more than 160 countries, Marins technology transforms
data into insights and complexity into opportunity for hundreds of global advertisers and
agencies. For more information about Marins solutions, please visit:
www.marinsoftware.com/solutions/overview.
Marin Softwares Context Connect functionality allows marketers to easily integrate
contextual data from a variety of sources to adjust bids. The Dynamic Actions feature
can help you optimize your marketing strategy by boosting bids up or down based on
this external data. While integrating all this contextual data into a marketing campaign
may seem complicated at first, Marins solution compartmentalizes it and makes it
simple and fast for the marketer, increasing efficiency for the while improving their
bidding strategies.
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The Hidden Power of Optimizing

for Competitive Spend, Weather,

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