Predictive Online Ad Targeting: Benefits of a Pixel-Free Approach

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Predictive Modeling:
Benefits to a Pixel-Free ApproachPredictive Modeling: Benefits to a Pixel-Free Approach 2Table of Contents
THE USE OF TRACKING PIXELS IN ONLINE ADVERTISING. 2UNDERSTANDING PREDICTIVE ANALYTICS. 2MAXIMIZING THE POTENTIAL OF PREDICTIVE ANALYTICS. 3MEASURING PIXEL-FREE SITE VISITOR CAPTURE. 4 Office Supplies . 4 Perishable Gifts. 5 Home Goods. 5 Auto Parts. 5Predictive Modeling: Benefits to a Pixel-Free Approach 2
3. M aintaining pixels remains troublesome: In theory, The Use of Tracking Pixels pixels can be very simple, but in practice, they provide in Online Advertising several notable challenges. They're a cumbersome and Since the first e-commerce marketing professional inefficient way of managing ad campaigns - choices looked to analyze shopper behaviors in order to drive must be made about which pages to pixel, leading more transactions on his web site, the only way to gather to an inevitable loss of user behavior capture. Once that information has been by implementing tracking pixels. they're there, they're often difficult for the IT staff These are small, transparent images embedded in websites. to maintain. All of this adds up to the fact that most When users ultimately browse such a site, information companies get a fairly small coverage of their website is gathered about what they are doing - how they're with pixels. That decreases the effectiveness of the coming to the website, what they're looking at, what information advertisers have and limits their options they've browsed, put in a shopping cart, abandoned as to what to do with that data. or bought. Tracking pixels provide both a high-level and (anonymously) individual view of certain behaviors on Understanding Predictive a given web site, and they lead to an ability to optimize Analyticsbased on those user behaviors. In the case of advertising, targeted advertisements based on those behaviors can Predictive analytics have been used by different indus-then be served to users. tries for years to solve difficult problems that range from detecting credit card fraud to determining patient risk However, there are three key issues surrounding pixels levels for medical conditions. It combines data mining and online advertising for e-commerce marketers. and machine-learning technologies to create statistical models based on historical data. It then uses these 1. S ite performance directly affects e-commerce models to predict future events. Extracting the power conversion rates: In-house research shows that from the data requires powerful algorithms behind companies who use Akamai's Dynamic Site Accelerator, predictive analytics.a site performance enhancer, enjoy conversion rates that are fully 23% higher than those who do not. One increasingly popular way to apply predictive (3.69% conversion rate using DSA; 2.88% without). analytics to online advertising is to look for patterns For an online retailer with five million monthly unique in user shopping behaviors that indicate likelihood to visitors and an average order value of $100, each buy particular products or services. Powerful relational percentage point improvement in conversion rate databases seek out correlative purchase activities; these would result in incremental revenue of $5 million can be intuitive (a blouse purchase leading to a jewelry a month. And according to Steve Souders, Google's purchase) or non-intuitive (auto parts leading to music web performance guru, when online retailers shave downloads). The more data that gets fed into the algo-up to 5 seconds off each website transaction, they rithms, the stronger those algorithms are likely to be. In can ... [download for more]