Yield Optimization

Yield Optimization means optimizing the yield and tries to optimize the available resources in order to increase sales. In this way, expenditure is invested in the best possible way and channels used are optimally utilized for sales.

Understanding Yield Optimization

If you want to optimize yield, you have to consider a few things. Shop revenue is influenced by many factors and changing one variable can disrupt another in its function. In the worst case, the yield after optimization is worse than before. This is why Yield Optimization (also called Yield Management) has become a very important part of large companies.

In the past, processes and flows within a business could be easily recognized and understood. In the meantime, however, many aspects have become more complex. Above all, the large amount of data that is now available must be interpreted and evaluated correctly. Today, complicated calculations are necessary for effective strategies to optimize earnings. Well-founded decisions can be made not only with the bare figures, but also with statistical processing. For this reason, yield managers are increasingly in demand. But experts also have to deal with constantly growing and ever new data. Yield Optimization is still very important and at the same time more complicated than ever before.

Using Yield Optimization, yourself

Many different industries and companies use the Yield Optimization system. Airlines and hotels, among others, like to use yield Optimization strategies in order to increase yield effectively and sustainably. However, the term is best known from online marketing.

This is exactly how Yield Optimization can be used by virtually any company that already places ads online. If this has not yet happened, then social media or Google Ads should first be run for at least 3 months. As already described, a solid data basis is mandatory for a meaningful Yield Optimization.

Evaluate conversion rates and campaigns

But where do you start with Yield Optimization? It is best to first look at which campaigns or ad groups perform best and which pages or products they lead to. Then you look at the conversion rate. Does this correspond to the industry average? These pages/products receive the most traffic, so the conversion rate should at least match the average of the other pages. If not, there is potential for optimization here to increase revenue. Either the below-average CTR (or conversion rate) is then due to the landing page or perhaps the targeting of the ads is not perfectly adapted to the target group.

Another method for Yield Optimization is the evaluation of the channels. Does Google Search bring in the most revenue or do users mainly click on the display ads? In online marketing, you have a lot of power over the targeting of the ads. It is important to use this power to carry out many small or large A/B tests.

Yield Optimization is not simply changing existing systems and metrics. Rather, Yield Optimization consists of many A/B tests that help you determine the best setup. Every change must be tested before you adopt it permanently or for all pages. Even with a very good data analysis, it is not certain that the measures really bring the desired improvement. Yield Optimization is the constant striving for improvement and optimization. It is also about the constant effort to keep increasing sales and to get the most out of the resources used. Therefore, Yield Optimization is never over, but a continuous and sometimes exhausting process.

Questions about Yield Optimization: