programmatic-advertising

What You Need To Know About Programmatic Advertising

We know that one of the biggest obstacles to the development and maintenance of strong digital publishing is time; since content and relationship development is critical to success, learning how to use programmatic advertising to make your paid efforts more efficient can be a good idea. Programmatic advertising has become an important skill set for all online advertisers and brands.

We always promote the use of relationship-building content via blogs, websites and social profiles to convert consumers. Programmatic ad buying isn’t a tool to create community and trust, but it is a door by which new consumers can enter your community. Think of programmatic advertising as a cost-effective way of sending invitations to your brand party. You can’t have the party without sending the invites, but once the guests arrive, you must do the work to keep them entertained and comfortable.

 

WHAT IS PROGRAMMATIC ADVERTISING?

Programmatic advertising is exactly what it sounds like: it’s advertising that is programmatically run. Specifically, it means using software to make digital ad purchases systemically and according to data rather than making all decisions manually and negotiating ads piecemeal.

Traditionally, even online advertising purchases are handled via processes that involve constant human intervention. You might not decide exactly where your ads are placed with the traditional approach, but you do insert orders manually, negotiate rates yourself and get involved in the detailed decision making. Some organizations use RFPs — requests for proposals — to outline intense bidding processes and contract terms. With just that high-level look at traditional advertising processes, you can already begin to appreciate how much time is involved to ensure marketing placements that return on the dollars invested.

All the time you spend on manual advertising processes is time lost on customer-facing activities that help you build a loyal following for your brand. Yes, advertising is critical to exposure and can drive new traffic to your site, but advertising isn’t what converts. If you let your site, content or relationships languish while you spend time getting the best bang for your marketing buck, you reduce the return on anything you budget for ads.

Programmatic display advertising — or any type of programmatic ad placement — lets you take a lot of the labor hours out of the process. This means data programs, software and online “robots” handle much of the work, though you do retain control over budgets, ad philosophies and messaging. In short, you hand over the “grunt” work of ad buying to technology while you keep your hand on the most important decisions.

 

WHAT IS REAL-TIME BIDDING?

Real-time bidding is a type of programmatic advertising that helps you match advertising spend with audiences most likely to fall into your target demographics. While the process of real-time bidding, or RTB, can be complex and highly technical, the premise is easy to understand. Here’s a look at the basic concept:

When you browse to a certain page on the web, there’s a moment as it loads. At the fastest bandwidths, that moment might be milliseconds in the marking, but it’s still there.

During that micro-moment, what is known as an ad impression also loads? An ad impression includes the following information:

  • Data about the page being loaded
  • Available data about the IP address or user loading the page, which might include location, region or some browsing history

That information is used to auction off ad space for the impression in real time, which means programmatic buyers bid on and purchase the space in the milliseconds before the page fully loads for the user. Obviously, this would be impossible to accomplish without the use of software and technical processes to handle the bidding and buying.

 

Why is real-time bidding important?
The biggest benefit gained through real-time bidding compared to traditional approaches and some other types of programmatic marketing is that you aren’t limited to certain types of proxies. Historically, a company selling newborn baby items would most likely purchase ad space on websites known to cater to its target audience. In this example, the biggest target audience would be new or expecting mothers, making sites such as Parent and The Bump great proxy sites. Both sites sell ad space and provide expert-level content new and expecting parents seek out.

Real-time bidding changes the game a bit. New parents don’t hang out on parenting sites all the time; they’re as likely to visit general sites, such as the Internet Movie Database, news sites or Facebook, as anyone else. Real-time bidding lets you engage with those new parents online wherever they are, increasing exposure and funneling more potential prospects to your site or products.

 

How is real-time bidding different from other forms of programmatic advertising?

Not all programmatic ad technologies rely solely on RTB to match publishers and advertisers. Some let the publisher set fixed prices for ad space and sell the inventory in advance. While this is closer to how ad space was managed in the past, the buying and selling are all handled by technology.

On one side of the process, the publisher (the site on which the ad will be displayed) enters information about its available inventory and pricing. On the other side of the process, the advertiser enters information about where it would like to see ads placed and how much it’s willing to pay for that space. The software or programmatic platform does the rest, matching appropriate publishers and advertisers following algorithms.

Once the purchases are made through these processes, the ad space is locked in. It doesn’t matter who loads a certain page, the intended ad will be displayed. The process is sometimes referred to as programmatic guaranteed or programmatic direct.

The benefit of programmatic direct processes over RTB processes is that you are guaranteed your ad will be displayed on the purchased page. While RTB might target a tighter audience, there’s a possibility your ad could lose to a competitor bidding in the same instant.

The downside is that publishers are becoming more aware of the power of RTB and other programmatic efforts. You can expect the cost of ad space made available programmatically to trend upwards as data bots and software become increasingly adept at targeting the perfect audience with your marketing.

 

TAPPING INTO PROGRAMMATIC VIDEO ADVERTISING

One area where programmatic marketing is making a name for itself is in video advertising. Video ad inventory is, by nature of the digital real estate it occupies, fairly limited. That means programmatic inventory related to video remains a relatively small percentage of overall inventory, but programmatic buying is an increasing option for those looking to advertise on video channels. This is especially true for YouTube advertisers.

Programmatic digital ad spending isn’t just trending up, either. It’s climbing at an astonishing rate. In 2015, programmatic accounted for around 39 percent of all digital video ad spend. The figure for 2016 is estimated to be about 60 percent, and experts expect it to reach close to 75 percent by 2018. Several factors are driving this increase.

Both publishers and advertisers in the video space are becoming more comfortable with programmatic processes
Programmatic lets publishers meet the growing demand for target-specific advertising
Programmatic video advertising lets advertisers leverage popular channels such as YouTube
The technology provides increasingly efficient ways to target very specific audiences

 

SOME TOP PROGRAMMATIC ADVERTISING COMPANIES

Dozens of startups have flocked to the growing programmatic advertising space, where existing advertising companies and platforms have already set up shop. With so many options and platforms, it can be daunting to choose a service, so we’ve listed a few of the top programmatic ad companies to get you started.

Rubicon Project

The Rubicon Project began as a startup with a novel idea about how online advertising should be a collaboration between companies and consumers. It’s grown quickly and recently went public. The platform lets businesses access automated ad buying or sell inventory on its exchange.

The Rubicon Project also lets users create an account so they can control the type of advertising they see. The company’s Project Awesome initiative is currently in beta, but it has implications for advertisers everywhere. While it might seem like a bad idea to put control in the user’s hand, it’s actually a low-cost way to gather enormous amounts of data and target ads with extreme precision.

Rocket Fuel

Rocket Fuel is another programmatic platform that’s gone public in recent years. Its tagline is “marketing in the moment,” and it drives programmatic advertising based on what it calls Moment Scoring. The scoring mechanism works via real-time bidding processes to score a user based on criteria associated with your ad. For example, if Rocket Fuel is attempting to match users to ads for restaurants, they might look at factors including:

  • Has the user browsed online for restaurants
  • Has the user ever clicked an online ad
  • What restaurants has the user checked into
  • Is the user on a mobile device
  • Is the location appropriate for the restaurant
  • The score is what lets Rocket Fuel match advertisers and ad spaces correctly.

The Trade Desk

The Trade Desk made the top 15 of Forbes list of 100 promising companies. It’s a buy-side platform catering to advertisers in all types of niches. One of the benefits of The Trade Desk is that you aren’t limited completely to online ad spaces. It offers access to RTB inventory in every channel, including video, display, social, mobile and television.

Integral Ad Science

Another company on the Forbes list, Integral Ad Science supports data-driven programmatic digital advertising. It lets you verify the efficacy of your ad campaigns, optimize the consistency of targeting and analyze the impact of your campaigns over time.

LiveIntent

LiveIntent concentrates mostly on email marketing and newsletter ad placement. They work with some of the largest publishers of email newsletters, letting you programmatically place ads before the right users in emails. Email marketing is one of the most effective online advertising tools, and LiveIntent lets you piggyback the email marketing of others to reach new consumers.

Q1Media

Q1Media specializes in online advertising in the video, display and mobile arenas. It works with proven ad units, including those designed for tablets, mobile phones, and desktops, to ensure ads are visible and impactful.

Yext

While Yext does have some programmatic adoptions, it’s dedicated more to helping you manage your brand’s exposure on maps and apps. This is a good complement to programmatic advertising because mobile users often default to a map or app when searching for businesses in their area.

 

Other apps and platforms

Some other apps and platforms you might want to consider when shopping for programmatic ad solutions include:

  • CPXi
  • Magnetic
  • Yellowhammer Media Group
  • Accordant Media
  • TripleLift
  • PK4 Media

PROGRAMMATIC ADVERTISING TRENDS

According to industry experts, says Mark Abay of Ashton Media, programmatic advertising will account for 100 percent of trading execution in the industry by 2020. That’s not surprising, as programmatic marketing was expected to account for a whopping 63 percent of online ad buys by the end of 2016. Here’s a look at some other programmatic advertising statistics and trends in the niche.

 

Data collaboration will become critical for success

Programmatic advertising requires strong data to ensure appropriate ad targeting, and up until now, much of that data has been internalized by the companies and brands dealing with it. That creates an uneven playing field since smaller businesses don’t have as many internal data points as larger companies. Cyrille Vincey, Ve Interactive’s Chief Data Officer, says companies and users all stand to gain from data collaboration — sharing certain data elements related to demographics and advertising.

Experts who agree with Vincey predict 2017 and beyond will see the development of programmatic software and programs that support cross-over data. That doesn’t mean confidential user information is necessarily up for grabs; the data is more likely to be identity-free information about user experiences, behavioral insights, and demographic targeting.

 

Manual ad buyers are going to fall increasingly short of the competition

As programmatic buying takes an increasingly larger piece of the inventory pie, manual ad buyers are going to find themselves losing out. First, without engaging in programmatic, you won’t have a shot at all the inventory offered through such venues. Since experts believe that programmatic advertising will be 100 percent of online ad inventory within the next 5 years, manual advertisers could be closed completely out of the market.

Manual ad buying also doesn’t provide the precision of programmatic, and that gap is growing wider by the day. Advertisers who aren’t targeting appropriately will see ROI continue to decrease, while their competition sees it trending upward.

 

Header bidding is coming

Header bidding is coming to all areas of programmatic, but it’s likely to impact video inventory most. We’ve already noted that video inventory is constrained naturally, and since it’s valuable real estate online, as much as 90 percent of that inventory is gone before it hits the market. That means video publishers and channels presell almost all the ad space, leaving a small amount that’s dumped into programmatic as a sort of clearance attempt. Traditionally in this space, programmatic was seen as the way to unload the last remaining ad space.

As programmatic platforms become more adept at providing comprehensive, proven targeting, video advertisers are more likely to want programmatic options. That moves those ads from clearance status to premium status, and publishers are beginning to take note. Header bidding lets publishers set aside certain parts of the inventory for programmatic purchasing; it also ensures all advertisers see the entire inventory, even if some of it is already spoken for. The benefit is more data for advertisers and better ability to forecast across the entire calendar year for both publishers and ad buyers.

 

The birth of programmatic storytelling

It’s no secret we think content and story is the backbone of digital publishing success. Content is what draws the consumer in and prompts them to take action. Storytelling is one of the oldest ways to engage your audience by presenting them with interesting information and tying emotional or mental factors to that information.

Today’s audiences expect storytelling even in short advertisements. The television ad spots that make the best-of lists each year or excite Super Bowl fans every February are all miniature stories. Programmatic advertising lets you leverage that winning approach online. The growing ability to pinpoint audiences with extreme accuracy lets you present information repeatedly to the same types of users, making it possible to continue stories from your site or string stories through several advertisements.

 

PROGRAMMATIC AD BUYING IS A MUST FOR TODAY’S ADVERTISERS

Content might be king, but programmatic advertising is the road by which you reach the castle. If you aren’t already on board with some of these options, make sure to consider programmatic advertising for your marketing and ad plans in 2017 if you want to keep up with trends, technology, and the competition.

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A Six Sigma black belt, Sarah writes regularly on business and project management, marketing and technology. When she's not working with local youth or writing for global clients, she spends time on a crooked mountain with her family.


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State of Digital Publishing - Copyright 2017