Programmatic buying is shaking up the digital marketing industry, even if those deep within the market don’t know it yet.
As TechRadar reports, according to recent research by the IAB (International Advertising Bureau), 89 percent of European publishers, advertisers and agencies state that they believe “programmatic trading will indeed have a significant impact on digital advertising.”
Magna Global, the digital media buying arm of Interpublic’s Mediabrands, projects that “programmatic spending will reach $9.8 billion in the U.S. this year, or about 20 percent of the overall digital-ad market,” but, while programmatic spending is on the rise, business owner confidence in their knowledge of programmatic advertising is still low.
Just consider this report, the first of its kind that surveyed over 230 Fortune 500 companies in the U.S., Canada and U.K. on their use and understanding of programmatic advertising. The survey found that while three out of every four marketers currently use programmatic advertising, out of approximately 70 percent of those marketers surveyed, “almost a third of them have been doing so less than a year” and “over 30 percent of marketers surveyed are currently NOT using Programmatic, although about half of these respondents indicated that they intend to do so in the near future.” What these numbers show us is that even though a large portion of the marketers are currently exploring programmatic advertising, it is still very new and more education is needed.
Programmatic ad buying, which is essentially the use machines to buy ads, as explained in a recent article published on Digiday, compares to the traditional process of request for proposal (RFP), which involves a salesperson and humans manually inserting orders. Programmatic ad buying is more efficient and reliable since there is less room for human error or necessity for human involvement. This also means more inexpensive transactions since fewer people are needed in the process, so “through programmatic technologies, advertisers can buy ads the way they pick up something on Amazon or bid on eBay.”
Managing programmatic advertising varies business to business with multiple models that include building an in-house team to using agencies, or a variation between the two. There’s essentially no “best practices” at this point since it is a relatively new model, but one thing is for sure: programmatic advertising frees up both time and money for businesses to work on strategically planned and implemented marketing strategies.
Also noted in the report surveying Fortune 500 companies, “over 30 percent of respondents are evaluating resources to better their efforts, 7 percent have reallocated internal resources to the effort, and 36 percent felt there would be internal organization and staffing changes due to programmatic in 2014-2015.” People are still needed in the process of planning marketing campaigns and assessing marketing strategies, but because machines are sending the insertion orders and dealing with the buying of digital ads, businesses are able to save money and focus their efforts on more tangible results.
Custom Fitted Mobile Ads
So how can businesses use programmatic advertising as part of their marketing strategies? One way is to use the upcoming holiday season (or really any time) to take advantage of “mobile marketing optimization.” As explained in a recent article on ProgrammaticAdvertising.Org, “programmatic advertising has transformed the mobile marketplace with the ability to manage advertising needs on a customized basis,” allowing marketers to effectively target customers in a more unique and tailored way.
Through this approach, businesses can create custom fitted mobile ads and do something the brick-and-mortar stores cannot do. Using the application of software to purchase to digital ads allows businesses to create customized ads tailored to the shopping habits of customers without having to spend any time manually inserting orders or pitching proposals. In the end, “by picking your targeted audience for you, programmatic buying takes the guess work out of wondering what demographic to target with online advertising.”
Current Challenges and the Future of Programmatic
Real-time ads have changed the digital marketing industry and this is only the beginning. There are however a few challenges to overcome, mainly the shortcomings of the cookie, which can only track consumer data via desktops. But a report in Chango foresees “unique device identifiers (UDIDs) to emerge in the near future that make the dream of a universal cloud-based cookie a reality.”
Other challenges may involve a feeling of breached privacy from consumers, but despite these challenges, marketers who embrace these changes now will surely be ahead in the future of advertising. Currently, the majority of ads traded programmatically are online, but with more agencies exploring various ways to sell “traditional media” online, the future of programmatic marketing appears to be a bright one.
A Case Study: A Programmatic Native Approach
Native advertising was a huge trend for 2013, allowing businesses to present advertising to match the native function and form of the platform on which it is presented, such as advertising that looks like part of editorial content. Combining programmatic and native advertising, Ball Street, the company behind the 451 digital football show, beat its engagement benchmark (the estimated clicks and views of content before publication) by 71 percent after using a programmatic native approach. Using RadiumOne’s programmatic MPU Flite unit, “Ball Street developed video content, sponsored by Papa John’s, and pushed it out in three bursts around matches with a deciding role in the race for the Premier League title,” which yielded 639,447 video views.
Matt Wilson of Ball Street, as cited in this case study, commented that “the results go to show what is possible with the right content using technology that can deliver it at the right time, in the right places to the right people. Having the ability to innovate and create while also measuring our reach and efforts is a hugely powerful tool for us and makes our proposition to brands even more compelling.”
Photo via IAB