Contributed by Matt Harty, General Manager of the global digital-media acquisition platform Accuen Asia Pacific – a part of Omnicom Media Group
The landscape of advertising and media has been transformed by digital. The last 15 years have given us plethora of digital platforms – banners, search, mobile and video ads, Facebook etc. Now we are looking at another milestone in the form of programmatic advertising. But what exactly is it.
Simply put, programmatic advertising is buying ads against a set of instructions. This can be as simple as buying banner ads only in Hong Kong or it can be as complex as buying banner ads targeted at women in their thirties who have looked at cosmetics websites in the past 30 days and live in Bangkok. The growth of programmatic buying is directly connected with the increased digitization of marketing and the rise of analytics that allow us to pinpoint how we use ads to target specific audiences.
Banking, travel and other industries have already gone through a process od digitizing their business processes. Now, it is the turn of our industry – advertising and marketing.
A key subset of programmatic buying is Real Time Bidding (RTB). Real Time Bidding is a revolutionary change in the online digital display media space. It offers new levels of ad performance, brand safety and cost efficiency. It also allows real data targeting to be used for the first time in digital advertising on a campaign-wide basis.
Real time bidding is “real time” as in we buy advertising at the moment we need it. Then “bidding” as we buy ads in an auction, just like search. It applies in any case where we want to target the audience and not just the website. RTB auctions one ad at a time for every single person individually. This allows us to apply any relevant information that applies to the cookie within the person’s browser that may influence the desirability of buying that advertising opportunity.
Programmatic buying is gaining popularity due to a set of clear advantages. While there are a few, let’s start with duplication. When you buy one site, life is simple but if you buy two sites, like say MSN and Yahoo! you have a cross-over audience. In fact, most of their audiences cross over. The third party ads serving technologies cannot control this duplication so you end up buying a much smaller reach and a much higher (and immeasurable) level of frequency. Programmatic via the RTB protocol eliminates this problem over thousands of sites if necessary.
Then there is the nature of advertising contracts. With the old model we guarantee money to publishers and hope they perform. In the RTB marketplaces we make no such guarantees. We retain control of our budget and allocate it only to where it is best performing.
Other than that, I like to look at it this way. In Singapore we have say 200 sites that deal with finance that people use – some local, some international. A normal media plan would use research or some other way to decide which two or three sites to put the ads on. Our new and I like to think enlightened approach is to put ads on all 200 and move the budget to the best performing sites.
In terms of growth, we are just at the very beginning in APAC. In the US where Programmatic has had a bit more time, advertisers will spend more than $3.36 billion for display ads through RTB this year, according to eMarketer’s latest forecast. This amounts to 73% growth for the year. So we can say that it’s a small but rapidly growing part. And if projections are to be believed, we have a number of years of double digit growth ahead of us in the Programmatic space.
For clients to adopt programmatic buying, they need to be strategic and have a well-thought out plan. They need to look deeply within themselves to understand their own goals and how they may be measured. The programmatic systems are smart and they can learn. Once the system knows the key performance indicators (KPI) it can develop the most efficient media-buying plan given time. The systems are smart, but they are still machines and need instructions. The more precise these instructions are, the better the end results.
The toolset that Programmatic represents is useful to a far wider group of advertisers. The de-duplication and audience targeting of the RTB market for example would benefit any brand advertiser. Other programmatic features such as look-alikes and other probability modeling capabilities can be of great help to any B2B marketer with small and elusive target audiences.
The measurement of the success of programmatic buying should be weaved into brand’s actual goals. These goals could be anything measurable – that could be a sale, a request for more information or simply someone performing an action like playing a game or downloading an app.
Pretty simple, but it’s what it should be.
In conclusion, I see programmatic buying being reactive to the information coming in from sales and prospecting based on probability models. Programmatic buying is the first toolset that supports an intelligent progression from campaign to campaign. Before this, we were surviving on insights rather than data.