Value-based optimization (VBO) with real-time LTV: YouTube

Ocurate’s value-based optimization (VBO) solution leverages Machine Learning for customer value and integrations into advertising platforms to increase the Return on ad spend (ROAS) by 15%+.

Over the last years, Google, Facebook, and TikTok have built out capabilities to push data back into the ads APIs.

VBO leverages that technology by infusing the APIs with predictions of future per-customer revenues. Predictions are made immediately upon sign-up and exceed 90%+ accuracy.

The platforms can now allocate bids for ad impressions based on customer value as opposed to first purchase. The result: increasing ROAS without increases to the existing ad budget.

Below, we describe the VBO process with YouTube, where our ROI is even higher (19%+):

VBO on YouTube

Goal: Allow Youtube Ads to optimize bidding toward acquiring customers with higher LTV.

Test methodology: Matched Market Test

  • Push real-time LTV back to Google Ads for all YouTube click IDS identified via OcuboostTM
  • Identify 2 regions in an existing campaign with similar demographics, spend and performance.
  • Exclude the two designated regions from the current campaign and adjust the budget accordingly.
  • Create 2 new campaigns mimicking the strategy of the current campaign: same ad copy and keywords
  • VBO Control - targeting Region #1
  • VBO Treatment - targeting Region #2
  • Run both the Treatment & Control campaigns mimicking the original strategy, allowing both campaigns to learn until behavior normalizes.
  • Once behavior normalizes - within the VBO Treatment campaign, switch the campaign Goal to the new Lifetime Value conversion action, and set the bidding strategy to Max Conversion Value.

Planned timeline:  This test will run for 8 weeks unless statistically significant results are garnered sooner.

  • Run for 4 weeks before measuring results
  • Run for 4 additional weeks to leverage optimized LTV predictions

Observed lift: 19%+ in LTV:CAC

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