Ad Auction

An auction determines which ads are shown, the order they will appear, and how much they will cost. Like the Google Ads auction, YouTube ads are ranked based on Ad Rank, which is based on the maximum CPC bid and the ad’s quality score.

Ad Rank = CPC bid × Ad Quality

The quality score measures the relevance of the ad to what the viewer is seeking. It has three components; the biggest amongst them is the click-through-rate (CTR). CTR is the means of incorporating users’ feedback to the Ad Rank. Relevancy is the next largest component. It ensures that relevant and useful ads are displayed to users. The third component is the landing page quality. (See section Google's Ad Auction — How it Works for more details on YouTube ad auctions).

Google Ads provides advertisers considerable information on the performance of their ads for optimization and testing purposes. Key metrics include views (completed views as well as quartiles), reach and frequency, engagement metrics such as CTR and clicks on other interactive elements, and average cost-per-view.

These metrics are covered in more detail in the chapter, Advertising Analytics, under the next section YouTube Analytics. They help advertisers evaluate their video ad spend, and optimize their spend on YouTube advertisements.

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What they SHOULD TEACH at Business Schools

What they SHOULD TEACH at Business Schools

Marketing has changed. More so in practical terms, and marketing education is lagging.

The fundamental change lies in the application of analytics and research. Every aspect of the marketing mix can be sensed, tracked and measured.

That does not mean that marketers need to become expert statisticians. We don't need to learn to develop marketing mix models or create perceptual maps. But we should be able to understand and interpret them.

MarketingMind helps. But the real challenge lies in developing expertise in the interpretation and the application of market intelligence.

The Destiny market simulator was developed in response to this challenge. Traversing business years within days, it imparts a concentrated dose of analytics-based strategic marketing experiences.

Dare to Play

Dare to Play

Like fighter pilots, marketers too can be trained with combat simulators that authentically reflect market realities.

But be careful. There are plenty of toys that masquerade as simulators.

Destiny is unique. It is an authentic FMCG (CPG) market simulator that accurately imitates the way consumers shop, and replicates the reports and information that marketers use at leading consumer marketing firms.

While in a classroom setting you are pitted against others, as an independent learner, you get to play against the computer. Either way you learn to implement effective marketing strategies, develop an understanding of what drives store choice and brand choice, and become proficient in the use of market knowledge and financial data for day-to-day business decisions.