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Why should you care about programmatic?

By July 16, 2015 No Comments

No longer just a fancy word to throw around in meetings, programmatic has grown up: of the £2.3bn spent on display ads in 2014, 45% (£960 million) was traded programmatically – up from 28% in 2013. The IAB’s chief strategy officer Tim Elkington has said that programmatic will account for up to 80% of all digital spend by 2018.

Programmatic accounts for two-thirds of mobile ad sales: its share of mobile ad sales has nearly doubled from 37% in 2013 to 64% in 2014, and nearly one fifth (18%) of video ads are now traded programmatically (IAB). 85% of advertisers told the Winterberry Group that they are deploying automated real-time bidding practices today.

We take a look at how product data can play an important role in this powerful new area.

BUT FIRST: WHAT DOES ‘PROGRAMMATIC’ ACTUALLY MEAN?

It basically just means ‘automated’. Econsultancy explains that programmatic “refers to the use of software and algorithms to buy ad space based on predefined budgets and target audiences.”

Not to be confused with real-time bidding (RTB), which is just one form of automated media buying, going ‘programmatic’ essentially allows marketers to “identify and target consumers with relevant advertising that helps them find products they are most interested in, at the very moment they’re ready to buy”, according to technology company MediaMath, who introduced the first demand-side platform (DSP) for digital media buying in 2007.

In other words, it means targeting the right person with the right product at the right time.

Programmatic embed

SO HOW DOES IT WORK?

Through a programmatic media-buying platform, users can set rules that automatically evaluate impressions against campaign goals, and make buying decisions in real-time if the price and value is right. In other words, you can claim a spot on a webpage just at the moment that your ideal consumer lands there. It’s very clever.

It’s also about combining data sets wisely. A clothing retailer may target particular mobile users, perhaps basket abandoners or people in their CRM database, with a curated selection of summer clothing adverts, but only if the shopper is near a store and if the temperature is above a certain number.

MediaMath sums it up nicely: “Unlike paid search, which is based on particular keyword searches, programmatic combines and activates valuable audience and media data in order to drive conversions that align to marketer’s goals.”

Indeed, programmatic has, for many brands, brought attention back to first-party data and unlocking the value in the information that brands already store.

(You can read a superb simplified explanation of programmatic and RTB on Econsultancy’s website).

WHY IS PROGRAMMATIC SO GOOD?

1. Reach the right consumer with improved targeting

WBR and MediaMath study found that multichannel programmatic campaigns had improved efficiency in media buying and targeting and helped them improve the customer experience with more relevant messaging. People using programmatic also reported increased return on investment (ROI) and conversions.

2. Measure the effectiveness of ads and gather more data as you go

Programmatic is very much about measurement – you can only be sure you are targeting the ‘right person with the right ad’ if you can actually measure the success, accurately and consistently, of every ad your serve. Many programs allow you to compare campaigns across channels with a relevant and consistent metric, and a higher conversion rate should let you collect more data on the people who see and engage with your ads.

“Programmatic is a fantastic learning engine that allows you to apply data to see what’s working and feed that back in to our creative process or target segmentation for the brands to creative better DNA, whether it’s improving our products or creating new ones,” said Heineken’s USA region senior media director Ron Amram at Cannes recently.

3. Make better use of your owned data

As Neil Coleman of AdRoll comments, “Marketers have a direct line to their customers in the form of first-party data gathered from website visitors, email lists, and contact databases. Programmatic ad buying is the cost-efficient, real-time application of all that data for strategic ad campaigns that can predictably transform data into customer revenue.”

And, as Beverly Macy states in the Huffington Post, “Brands… are realizing there’s gold in their own data and they intend to forge closer contact with their customers’ purchasing intent.”

How product data can help

Much commentary focuses on owned customer data and audience targeting but, if you want to serve up the right product to the right person at the right time, having control and deep knowledge of your product inventory is essential. Being able to publish live product offers into the right media dynamically requires a high-quality product data feed with as much detail as possible – as well as knowledge of what converts best.

For example, does one of your brands or categories perform better than others? Do you see more clicks when you promote specific attributes? The beauty of programmatic is that you don’t have to work this out – it can be done for you – but you need to understand your product data and be able to respond to what your fast-moving advertising requires.