Lance Loveday gave a keynote presentation about optimizing digital advertising spend. Some of the main points from the presentation include: 1) The digital advertising market is inefficient, creating opportunities for advertisers who optimize their campaigns. Loveday discussed 7 steps for optimization, including looking beyond the current playing field, measuring what matters, buying the most valuable traffic first, being wary of display advertising, using quality score to gain an advantage, optimizing to deeper funnel metrics, and ruthlessly auditing campaigns. 2) Quality score plays a major role in determining ad position and cost per click. Improving quality score through more relevant ads and keywords can significantly improve campaign performance. 3) Optimizing to

1. KEYNOTE
Lance Lovedaylance@closedloop.com
CHIEF EXECUTIVE OFFICER,
CLOSED LOOP
LOS ANGELES, CA ~ JUNE 13 - 14, 2018 | DIGIMARCONWEST.COM
#DigiMarConWest
Growth Secrets We've
Learned Managing $500M
in Digital Ad Spend

2. 2

3. THEN
The Efficient Frontier
ROI
LEAD VOLUME
3

4. NOW
Winners & Losers
ROI
LEAD VOLUME
Exponential
Advertisers
Everyone
Else
4
THEN
The Efficient Frontier

5. 5
FREE YOUR MIND
1
THIS IS NOT A LEVEL PLAYING FIELD

7. YOUR
COMPETITOR
IS HERE

8. TRYING TO
GET HERE
YOUR
COMPETITOR
IS HERE

9. YOU ARE
HERE

10. TRYING TO
GET HERE

11. WINNING
FOR YOU
WINNING
FOR THEM

12. 12
MYTH REALITY
Efficient Market Ad Market is Wildly Inefficient
(which creates opportunity)

13. 13
MYTH REALITY
Efficient Market Ad Market is Wildly Inefficient
(which creates opportunity)
Incremental Exponential

14. 14
MYTH REALITY
Efficient Market Ad Market is Wildly Inefficient
(which creates opportunity)
Incremental Exponential
Advertising is Cost Center Advertising is Profit Center

15. 15
MYTH REALITY
Efficient Market Ad Market is Wildly Inefficient
(which creates opportunity)
Incremental Exponential
Advertising is Cost Center Advertising is Profit Center
Ad is Strategy/Creative-Driven Advertising is Execution-Driven

16. 16
MYTH REALITY
Efficient Market Ad Market is Wildly Inefficient
(which creates opportunity)
Incremental Exponential
Advertising is Cost Center Advertising is Profit Center
Ad is Strategy/Creative-Driven Advertising is Execution-Driven
Average is Average Average Is Losing

17. 17
“YOUR COMPETITOR’S OUTDATED
THINKING IS YOUR OPPORTUNITY”

18. 18
“YOUR COMPETITOR’S OUTDATED
THINKING IS YOUR OPPORTUNITY”
- Lance Loveday

19. 19
STEP 1. Look Beyond Your Current Playing Field
TAKE ACTION:
1.1 If your campaigns haven’t been completely rebuilt in the last 1-2 years…
• Evaluate rebuilding
1.2 Check which playing field you’re on
• Look at your impression share, relative CTR and auction insights reports
• Look at competitors spend using competitive insight tools

20. 20
MEASURE
2
WHAT ACTUALLY MATTERS

21. Visualize Your Spend & ROI Distribution
Size = Spend, Color = ROI
21
$90
Helps you to think
differently about
your campaigns &
spot opportunities
you might otherwise
miss.

22. Spend & ROI Distribution Patterns
22
Light restructure for
tighter granularity
3
Looking good…
5
Heavy pruning
2
Light pruning
1
Start over
4
Spend reallocation
opportunity?
6

23. 23
STEP 2. Do a Quick Health Check
TAKE ACTION:
2.1
•
•
•
•
•
•
•
•
2.2 Identify any easy fixes that are holding you back

24. 24
DON’T SPEND MORE
3
BUY THE MOST VALUABLE TRAFFIC FIRST

25. 25
SO, DON’T SPEND MORE BEFORE
MAXIMIZING EFFICIENCY
Spending more guarantees diminishing returns

26. Analyze Impression
Share for Top
Performing Keywords
• If strong performing
keywords (low cost per
conversion) are losing
impression share,
rebalance spend to max
them out FIRST
• Doing this across your
campaigns will maximize
budget and improve
efficiency
26

27. Visualize Your Geographic Performance
Size = Spend, Color = ROI
27
Uncover optimization
opportunities you
can’t see in the raw
data.
Insights jump off the
screen at you when
presented in this way.

28. Geographic Performance Patterns
28
1 2
3 4

29. Geographic Performance Patterns
29
1 2
3 4
Low-Hanging Fruit:
Apply geo-specific bid modifiers in areas
where you’re clearly winning or losing to
boost ROI immediately.

30. Aggregate Match Type
Performance
Can help uncover easy
optimization opportunities just to
reallocate spend. Also a great
indicator of overall campaign
health.
30

31. Match Type Performance Patterns
31
1 2 3

32. Match Type Performance Patterns
32
1 2 3
Low-Hanging Fruit:
If Exact Match performs best but Exact
Match Impression Share is low (<80%),
reallocating more spend to Exact could
increase ROI immediately.

33. Match Type Performance Patterns
33
1 2 3
Our Target Allocation:
Spend 60%-80% on Exact, remainder to
Modified Broad

34. Quality Score by Match Type
34
Quality Score for Exact
Match keywords is >2x
higher than Broad
Match!!!

35. 35
STEP 3. Buy the most valuable traffic first
TAKE ACTION:
3.1
3.2
•
•

36. BE REAL
4
ABOUT DISPLAY

37. •
•
•
•
•
•
•
•
Tough Love About Display

38. STEP 4. Be Wary About Display
TAKE ACTION:
4.1
• Can be more for branding/awareness-oriented campaigns
4.2 Standardize on 1-2 platforms
• E.g. GDN + 1 DSP are more than enough for most
• Don’t get spread too thin
4.3 Invest in good creative
• A small lift in CTR can be game-changing
4.4 Always separate view-through conversions from click through conversions &
value them differently in reporting
• We see that GDN will give you far more click through conversions than DSPs

39. 39
USE QUALITY SCORE
5
TO GAIN AN UNFAIR ADVANTAGE

40. Ad Rank – The Hidden Metric That Limits Your Potential
40
Ad Rank Determines Ad Position

41. Ad Rank – The Hidden Metric That Limits Your Potential
41
Ad Rank Determines Ad Position
Higher Ad Rank = Higher Position

42. Ad Rank – The Hidden Metric That Limits Your Potential
42
Higher Position = More Traffic
Ad Rank Determines Ad Position
Higher Ad Rank = Higher Position

43. How is Ad Rank Determined?

44. How is Ad Rank Determined?
Ad Rank Max Bid Quality Scorex=

45. How is Ad Rank Determined?
(Max you can pay
for that click)
(Determined by ad relevance,
CTR and other factors)
Ad Rank Max Bid Quality Score= x
(Determines
traffic potential)

46. In other words…
Ad Rank Max Bid Quality Score
orMore Traffic Pay More Improve Relevance
($$$$) (FREE)
It’s your choice. I’ll wait.
=

47. 47
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Why Quality Score Matters

48. 48
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Max Bid x Quality Score = Ad Rank

49. 49
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Max Bid x Quality Score = Ad Rank

50. 50
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Max Bid x Quality Score = Ad Rank

51. 51
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Ad Rank drives Ad Position

52. 52
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Ad Rank drives Ad Position

53. How is Actual CPC Determined?

54. 54
The Ad Rank of the
Person Below You
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC

55. 55
The Ad Rank of the
Person Below You
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Your
Quality Score
$0.01

56. 56
Your
CPC
The Ad Rank of the
Person Below You
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Your
Quality Score
$0.01

57. 57
Your
CPC
The Ad Rank of the
Person Below You
Your
Quality Score
$0.01
Ad Position Max Bid Quality Score Ad Rank Actual CPC
1 $2.00 10 20
16/10 + 0.01 =
$1.61
2 $4.00 4 16
12/4 + 0.01 =
$3.01
3 $6.00 2 12
8/2 + 0.01 =
$4.01
4 $8.00 1 8 Highest CPC
Notice how Advertiser 1 pays
less for a higher position due
to high quality score.

58. What’s Your
Quality Score?
Know where
you’re starting from.
Quality Score has a huge
impact on your campaign
economics. It’s critical that
your higher spend terms
have the highest possible
Quality Scores - and that
your account overall has a
high Quality Score.
58
How many of your
keywords have a Quality
Score of 1, 2, 3… 10?
Brand
Non-Brand

59. Quality Score Distribution Patterns
59
Slightly less bad
2
Good
3
Bad
1
Brand
Non-Brand

60. Can You Really Improve Quality Score?
60
BEFORE AFTER

61. Can You Really Improve Quality Score?
61
BEFORE AFTER
Weighted Avg. QS:
3.8
Weighted Avg. QS:
5.2

62. Can You Really Improve Quality Score?
62
BEFORE AFTER
Weighted Avg QS:
3.8
Weighted Avg QS:
5.2
37%
Improvement
in QS

63. 63
Quality Score provides a
multiplier on both VOLUME & ROI
Aside from Conversion Rate, there is usually no bigger
lever to improve campaign performance than QS.
Learn it, Love it, Own it.

64. 64
STEP 5. Use Quality Score to gain an unfair advantage
TAKE ACTION:
5.1
5.2 If below 5, treat it like a Code Red situation and immediately prune/rebuild
campaigns to increase relevance/CTR
• Monitor Quality Score for your higher spend terms
• Break those terms into their own Ad Groups if needed
• Apply Match Type recommendations to help reduce waste & increase CTR

65. 65
OPTIMIZE
6
TO DEEPER FUNNEL METRICS

66. Full Funnel
Optimization
Don’t settle for front-
end optimization.
Go as deep as you can.
Even one step deeper
can have a massive
impact.
66
Impressions
Clicks
Leads
MQLs
SQLs
Sales
Revenue







LTV 

67. Which Campaign is Top Performer?

68. Which Campaign is Top Performer?

69. Which Campaign is Top Performer?

70. Which Campaign is Top Performer?

71. ClosedLoopmanagementbegins
Optimize to Lead Optimize to SQL
2015 2016
71
How Spend Shifted
Our spend mix changed substantially when we shifted to optimizing to SQL.
Optimize to Lead Optimize to SQL

72. 72
How Spend Shifted
Our spend mix changed substantially when we shifted to optimizing to SQL.
ClosedLoopmanagementbegins
Optimize to Lead Optimize to SQL
2015 2016
Previously “expensive”
leads turned out to be
worth it
We’d been overpaying
for “cheap” leads by
30%

73. How Else Can You Improve Traffic Quality?
e.g. Can you generate more medium/large company leads?
Micro Business 2-20
Small Business 21-100
Mid Market 101-1,000
Commercial 1,001-5,000
Enterprise 5,000+
Company Segments
73
Q1 Q2 Q3 Q4 Q1

74. The Impact
Fewer small company leads
Micro Business 2-20
Small Business 21-100
Mid Market 101-1,000
Commercial 1,001-5,000
Enterprise 5,000+
Company Segments
74
Q1 Q2 Q3 Q4 Q1

75. The Impact
More medium/large company leads
Micro Business 2-20
Small Business 21-100
Mid Market 101-1,000
Commercial 1,001-5,000
Enterprise 5,000+
Company Segments
75
Q1 Q2 Q3 Q4 Q1

76. $0
$5
$10
$15
$20
$25
$30
0
5K
10K
15K
20K
25K
30K
35K
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Qualified Leads CPL
ClosedLoopmanagementbegins
76
The Impact

77. 77
STEP 6. Optimize to deeper funnel metrics
TAKE ACTION:
6.1 Create
6.2
•
•

78. 78
AUDIT
7
RUTHLESSLY

79. A Complete Audit Contains Over 30 Areas of Analysis
 Account Structure
Campaign & Ad Group Organization
 Key Metrics
Impression Share, Spend by Match
Type, CPA
 Spend Hierarchy
Channel & Platform Spend Distribution
 Account Settings
Dayparting, Ad Rotation, Distribution,
Geotargeting, & more
 Bidding Strategy
ROI vs. Position
 Keyword Strategy
Match Type, Depth, QS, Search
Query Reports, & more
 Landing Page
Continuity, Design for Conversion
 Ad Copy Creative
Continuity, Testing,
Differentiation, CTA, Automation
& more
 Tracking & Metrics
Conversion Tracking, GA Usage
 Display Campaigns
Placement, Ad Formats,
Multivariate Ad Testing
 Remarketing Campaigns
Audiences & Conversions
 Social Campaigns
Placement Targeting, Audience
Targeting Expansion,
Campaign Budgets, Video
Strategy, & more
79

80. 80
A CAMPAIGN AUDIT IS LIKE AN
ANNUAL HEALTH EXAM
POSSIBLY UNPLEASANT,
BUT CAN SAVE YOUR ASS

81. 81
YET ALMOST NO ADVERTISERS
REGULARLY AUDIT THEIR
CAMPAIGNS

82. NOW, GO FORTH
& DOMINATE YOUR
PPC CAMPAIGNS!
THANK YOU
Growth Secrets Learned Managing $500M in Ad Spend | CLOSED LOOP | www.closedloop.com | @closedloop

83. Want These Insights For
Your Campaigns?
If you’re spending more than $50K/month,
we’ll audit your campaigns for free.
83
POTENTIAL UPSIDE:
35-40%
Our comprehensive audit:
• Includes over 50 data visualizations
• Pinpoints areas of opportunity
• Will help you grow qualified leads & maximize ROI
Visit: closedloop.com/audit
Get a Free Audit