When it comes to retail media, a common question from advertisers and retailers is: "What happens when someone bids $1 versus $2?" The answer is nuanced, as Zitcha's search API integration returns sponsored product and banner ads based on a complex algorithm. This algorithm takes into account several factors, including ad pacing, ad relevance to the customer, and the bid amount. Let's delve into how these elements interact and impact ad visibility.

The Complexity of Ad Placement

Zitcha's ad placement is not solely determined by bid amounts. Instead, it involves a multifaceted approach to ensure that the most relevant ads are shown to users. Here's a breakdown of the key factors:

1. Ad Pacing: This ensures that ads are shown at optimal times to achieve the best results without oversaturating the audience.
2. Ad Relevance: Ads are matched to users based on their search queries, browsing history, and other contextual factors. This ensures that users see ads that are pertinent to their current journey.
3. Bid Amount: While higher bids can increase the likelihood of an ad being shown, they do not guarantee top placement if the ad is not relevant to the user's search or context.

Example Scenarios

To illustrate how these factors work together, consider the following scenarios:

Scenario

1: Competing Product Types

• Bidder A bids $1 on a product type X.
• Bidder B bids $5 on a product type Y.
• A user searches for something closely related to product type X.

Even though Bidder B has a higher bid, Bidder A's ad is more relevant to the user's search. Therefore, Bidder A's ad is more likely to be displayed.

Scenario 2: Competing Brands and Filters

• Brand A bids higher on a general product category.
• Brand B bids lower but has products in a specific filter (e.g., blue colour).

When a user searches for the general product, Brand A’s ad appears first due to the higher bid. However, if the user applies a filter to see only blue products, and Brand B has the relevant items, Brand B’s ad will then surface at the top of the results.

Ensuring Relevant Ads

Zitcha's primary goal is to ensure that the ads shown are relevant to the user's journey. This means:

• User Experience Focus: Users see ads that are pertinent to their current needs and interests, improving their shopping experience.
• Advertiser Value: Advertisers get better engagement rates because their ads are shown to users who are more likely to be interested in their products.

Bid Amounts and Ad Placement

While relevance is crucial, bid amounts do play a significant role:

• Higher Bids: Generally result in better placements, especially in competitive categories where multiple advertisers vie for the same audience.
• Optimised Placements: Zitcha's algorithm balances bid amounts with relevance to ensure that higher bids lead to optimal ad placements without compromising user experience.

Conclusion

In summary, Zitcha's ad placement strategy ensures that the most relevant ads are shown to users, while higher bids can enhance ad visibility but do not guarantee top placement. This balanced approach benefits both retailers and advertisers by delivering pertinent ads to users and optimising ad performance.

By understanding this dynamic, retailers and advertisers can make more informed decisions about their ad strategies on the Zitcha platform. For further questions or deeper insights into our ad placement algorithms, feel free to reach out!