This week we are going to talk about the ad auction, and how you can use it to maximize your digital ad spend.

What’s up Fish Fans! My name is Marcus. You’re watching Marketing Madness, the Blue Fish vlog!

Digital ads are a complicated subject. There are multiple platforms, a large variety of spending strategies, optimizations, and more. But something that just about every platform shares is the idea of the ad auction.

The ad auction is the system that determines which ads get shown to a given user. Many people believe that whether your ad shows or not is simply determined by how much more money you’re spending than your competitors. But that’s actually not the case at all. Your budget is important, yes, but an ad auction takes into account dozens of things all at once to determine if someone should be served your ad.

For example, say someone is browsing through their Facebook feed and come across a sponsored post. Facebook now has to look in its large catalog of ads and pick which one needs to go there. Say the user expressed interest recently in dog toys. That gives Facebook something to go off of, so they’ll start by looking around for all the ads that target people who own dogs. They then look at several ads individually for content, targeting, budget; and widdle it down until only one remains: the ad that gets shown on the user’s feed. The chosen ad to rule them all.

Unfortunately for us, this is a “black box” system. The only people that know what’s really going on in the ad auction is the platform. It’s a trade secret. After all, if we knew exactly how it worked, we could game the system and make sure our ads show each and every time. And that’s unfair.

What we do know about the ad auction is that both your budget and your content matter. It’s often easy to determine your ad spend budget, as most platforms have neat little forecasting tools that will tell you how far your money will go. What’s harder to predict is how your content will perform. Each image, each video, and each block of text is a factor in your ad content. It gets complicated, and fast. Sometimes your content will be vetoed by the platform site, forcing it to not show up at all, other times it gets limited, or simply can’t compete in a “quality check” against other similar ads. And even if it does start to show, how the people will respond to your ad is heavily variable as well. That’s why we do automated A/B testing to determine which ads should stay, and which should go away. Ye’ like that?

Okay, well, that’s a wrap for this week! I want to thank you for checking in. Make sure to hit that like button. And if you have any questions or comments leave them down below. If you want to talk about how Blue Fish can help you grow your business just send us a message and we’ll get the conversation started!