What Is Win Rate, and Why Does It Matter?

2
2713

ADOTAS – Marketers are hungry for metrics that provide greater insight into campaign performance and are also in search of greater clarity into what drives successful campaign strategies. New metrics can aid in linking marketing strategies to ROI, and now with the advent of real-time bidding (RTB) exchanges and supply-side platforms (SSPs) in the marketplace, a new metric has entered the scene: Win Rate.

Win Rate is easy to calculate — just take the total number of impressions you have won and divide it by the total number of impressions you have bid on. But what is a good Win Rate? Why should online marketers care? How is it useful? Those questions are a lot harder to decipher than calculating the metric.

First, it is important to understand the data available for calculating Win Rates. Not every exchange lets every bidder retain 100 percent of their lost bid data. If only a sample of lost bid data can be kept, it is important to understand how that sample has been collected to account for any selection bias.

Imagine two bidders in competition with each other. One collects 100 percent of their lost bid data. The other collects only a 10 percent sample and has their bidding filtered by the exchange in question to only bid on remarketing users. Comparing Win Rates between these two bidders would be problematic, as the simple wins/bids equation would reflect two very different data sets.

So what makes a good Win Rate? The answer depends on the type of bidding you are looking at. For a highly targeted campaign attempting to reach valuable users by remarketing, a high Win Rate is very desirable. The marketer wants to make sure they are reaching every available user of their desired audience segment, and a high Win Rate indicates that they are bidding effectively — therefore, they are accomplishing the goals set out.

For a larger run-of-network campaign without specific parameters around desired demographics, there will be a broad spectrum of value in the impressions available for bidding. Some impressions may be very valuable, others less so. The less valuable impressions might not have a high probability of leading to the desired action, but may be effective for the campaign if they are acquired at a low cost. For these campaigns, an effective bidder will submit low bids and may not win very often. In this case, a low Win Rate is not necessarily an indicator of a problem — it simply reflects the low value of some impressions to that campaign, compared to the value of those impressions to other bidders.

For example, imagine that I’m searching eBay for cocktail shakers. I find one I like, but I can see that it’s not in the best shape. I throw down a bid of $20. Someone else sees the same auction and realizes this is the last shaker they need to complete their collection of pre-1940s Revere shakers. They immediately put down a $500 bid. I wanted a new shaker, but I wasn’t ready to spend a lot of money on it. I might have lost the auction, but there was no way this particular shaker was worth $501 to me.

So the question remains: Why should I care? What can a Win Rate be used for? One way is to help a marketer understand competition in exchanges.

A low Win Rate with high bids for a select audience can mean that another bidder is after those exact same users. A zero percent Win Rate for something on the low end of the bid spectrum will most likely mean that a pricing floor is in place. A high WinRate with a big spread between your bid price and your clearing price means that you’ve just uncovered a goldmine — inventory that is very valuable to you that other bidders may not have discovered.

Win Rate can be a very useful metric to a marketer, but in and of itself it’s not an indicator of effective bidding or campaign performance. As with many aspects of online advertising, interpreting the Win Rate metric depends just as much on the question as it does the answer. Ultimately, Win Rate provides a means to gain valuable insight into the performance and context of campaign strategies, goals and targets.

2 COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here