How Budget Pacing Helps Your Online Advertising Campaign

Posted by Adam Parikh

Apr 10, 2014 11:36:00 AM

Campaign_Budget_PacingWhen you set a budget and launch a campaign, the campaign bids on auctions based on a number of factors. It proceeds to bid in auctions until it reaches that budget; it then stops bidding in auctions. As an advertiser, you would like your creatives to be viewed by users evenly over the course of a day (or a specified period in a day) to increase your chances of reaching the most possible potential customers, but budgeting alone does not account for this concept.

Budget pacing is a tool which governs how often ExactDrive bids in auctions, with the primary goal of spending the campaign's budget evenly across the allotted time period. There are two primary types of pacing; Daily Pacing and Lifetime Pacing.

If pacing is not applied, campaigns will attempt to purchase as much inventory in the shortest time possible until they meet the specified budget amount. This may not be beneficial (if you spend your entire budget between midnight and 5 a.m., a large portion of your intended target audience may never even see your creatives, as they will not serve after 5 a.m.).

As stated above, you can apply pacing to a campaign on either a daily or lifetime basis, or both. Daily budget pacing determines how frequently a campaign bids with the goal to serve the right amount of impressions each day. Lifetime pacing reviews the activity of the previous days in the life of the campaign as well as the days remaining, and adjusts the campaign settings to win more or fewer auctions and serve more or fewer impressions each day. Lifetime and daily pacing act independently of each other but drive towards the same goal; keeping the campaign on-budget within the right timeframe.

Daily Budget Pacing :

This option allows you to spend your budget evenly over a day or part of a day. The amount that a campaign is spending is updated several times per hour (about every 15 minutes) to determine if it is on pace (if it will meet the daily budget amount at the current win rate), below pace (if it will fall short of the daily budget amount at the current win rate), or above pace (if it will exceed the daily budget amount at the current win rate). The systems then adjusts the time between auctions that the system does not offer any bids to either participate in more or fewer auctions, and subsequently win and serve more or fewer impressions to meet the daily budget.

For example, assume a campaign's daily budget is $100 for the day. Based on the settings of the campaign, it may purchase that amount of inventory by 10 a.m., forcing it to remain dormant for the remaining 14 hours of the day so as not to exceed the daily budget. To ensure that a campaign serves ads at a nearly constant rate over all 24 hours of the day, daily pacing extrapolates the win rate (the frequency at which the campaign wins bids and serves creatives) and then deactivates the bidder (i.e., puts the bidder to "sleep") for short periods between successful bids. Because the bidder is only active (awake) part of the time, it can only participate in some auctions, win only so many bids, and can therefore only spend so much budget. The sleep and awake periods vary during the day, with the goal being to spend the last portion of the daily budget at the end of that day.

Lifetime Budget Pacing:

This option allows you to spend your budget evenly over the life of the campaign. Lifetime pacing requires the use of start and end dates, a defined lifetime budget amount, and the use of daily pacing. Like daily pacing, lifetime pacing adjusts the frequency with which the bidder participates in auctions in order to meet the defined lifetime budget amount; if it is trending over budget, it participates in fewer auctions, and if it is trending under budget, it participates in more auctions.

For instance, if a campaign over-or-underspends it's daily budget for one or more days, lifetime pacing increases or decreases the daily budget for the remaining days of the flight so as to bring the entire campaign in line with the final budget goal. Therefore, a campaign with a lifetime budget of $5,000 and a 10-day flight should spend $500 per day; if it spent more than $500 on one day, lifetime pacing will compensate by reducing the daily budget over the next few days to get budget pacing back on the right track.

If you have any additional questions please feel free to contact us.

Topics: Online Advertising, Advertising Optimization, Budget Pacing

Our self-serve advertising platform with managed services provides a leading solution for advertising your brand online.

Register Today Free

Receive Updates

Posts by Topic

View All >