Yandex.Direct automatically predicts the likelihood of conversion for each and every impression. This is nothing new — we have been developing and perfecting this technology for years.
In 2017, we taught Yandex.Direct to automatically lower advertisers' bids for impressions in ad networks if the forecast indicated a low likelihood of the user converting. Doing so allowed advertisers to bring in 5% more conversions without changing their budget or campaign settings. Our launch of bid optimization in ad networks in September of last year brought an average increase in conversion rates of 9% without changing the budget. Yandex.Direct learned not just how to save, but also how to redistribute funds to impressions for those users most likely to make a purchase.
Here’s an example of bid distribution from an ad networks campaign. The advertiser’s bid was 10 RUB. Raising it to 10.53 and 11.42 RUB, the system was able to win additional conversion:
On one hand, our algorithms can determine which actions on a site are most important for businesses by default. On the other hand, we aim to optimize purchasing specifically for each business. The recently introduced priority goals feature makes it possible for advertisers to tell Yandex.Direct which benchmarks to use, either manually or by using important goals from Yandex.Metrica together with their values via the Direct API.
As a result, optimization works according to the same goals that you yourself set, and you can track your revenue and profit in your statistics:
Now that our algorithms have proven themselves in ad networks, bringing a total of 14% more conversions for the same budget, we are planning to launch the same management model on search.
When will these changes come into effect?
We will give you advance notice when we begin enabling these algorithms in the second half of May. At first, this will affect only a small portion of traffic. Later, we will gradually expand the algorithms’ area of influence, carefully monitoring the results of their previous performance.
How will optimization of average CPA work on search?
Optimizing manual bid management in Yandex.Direct will make it possible to get more conversions within your current budget limits, redistributing funds to those impressions or clicks that are most likely to lead to conversions on your site. The system will continue to use your bids for each keyword, but can automatically lower them for clicks with low probability of conversion or, on the contrary, raise them for clicks highly likely to lead to conversions.
Let’s say that you own a flower shop and sell your bouquets online. You set a bid of 7 RUB for the keyword “order flowers in Nizhniy Novgorod.” The average CPA is 70 RUB, since every tenth user who enters this search query places an order.
If a user is highly likely to order a bouquet from your site, the system can set a bid of 10 RUB to show your ad in more visible positions. If, on the other hand, it is clear that the user is unlikely to buy a bouquet, the system can lower the bid. Your average CPA will be no higher than 70 RUB, and the system will maintain your bid level of 7 RUB overall.
How will the interface change after the launch?
“Manual strategy” will change to “Manual bid management with optimization” in the Yandex.Direct interface, the Direct API and Direct Commander. All set bids will be saved in the new strategy, and you will be able to change them as you did before.
The existing “Manual bid management with optimization in ad networks” strategy will be shortened to “Manual bid management with optimization.” The change in name does not indicate a change in function.
If you want to focus on optimizing other indicators, you can choose another strategy at any moment, like an automatic strategy to optimize CPA, ROI or a weekly budget, etc.
External bid management systems will continue to function as they have been. We are making a conscious effort to make this launch as smooth as possible, so that our advertisers can quickly see positive results of these changes.
We’ll be sure to remind you again in advance of the official launch. It’s not too early to make changes to your Yandex.Direct settings, e.g. choosing priority goals in preparation for the launch.
And once more about how this all works
How algorithms predict conversion probability
Using the data that Yandex services have compiled over the years, machine learning algorithms can predict the results of each visit to your site with high probability. The system can determine the likelihood that a given user will convert, and then check if the prediction was correct afterward.
The system also knows what kinds of conversions interest different types of businesses, i.e. ads for real estate aim to attract calls from users, whereas an electronics store hopes that users will place orders, and a beauty salon expects users to make appointments.
How can I tell the system which conversions are important for my business?
You can decide for yourself which user actions bring the most benefit for your business and set values for them in your priority goals settings. This way, our algorithms can adjust your bids on search to get more conversions without changing your budget. Enter your priority goals, and the optimization algorithms will maximize these specific conversions, taking into account the values you set for them.
Moreover, you can find more information about your priority goals in your detailed statistics, and track your profit and assess your campaigns’ performance at different levels of the sales funnel.