What is Progmmatic Marketing? Introduction

INTRODUCTION:

Programmatic marketing is seen as the future of advertising on the web, with Google targeting 60% of digital advertising budgets spent on Programmatic by next year. According to Forrester, programmatic will account for the majority of all digital advertising spending over the next few years.

The only thing standing in the way of this change is marketers' lack of knowledge of the process and reluctance to give up previous ways of purchasing ads in favour of the complex yet extremely effective instant, automated bidding process used in programmatic marketing. A little knowledge can go a long way, so we thought an introduction to the concept of programmatic marketing would be useful for digital marketers. But what is programmatic digital marketing?

Defining Programmatic Marketing

Because it involves millisecond long auctions during page loading times via algorithms, programmatic marketing can at first glance seem a baffling concept, but when boiled down to its simplest form it is in essence quite simple. We define Programmatic Marketing as:

Programmatic marketing is automated bidding on advertising inventory in real time, for the opportunity to show an ad to a specific customer, in a specific context.

'Programmatic Marketing' or advertising is a general term, so it's best to divide it based on whether it involves Real-time Bidding (RTB) or not. Often it is only considered to be real-time transactions to bid.

How does it Programmatic Marketing work?

When anyone clicks on a web page that has advertising space that is configured for programmatic advertising, the publisher of the page puts up an ad impression for auction in an ad marketplace. The ad marketplace then runs an auction among advertisers interested in displaying an ad to that specific customer that just click on the page. There may be many advertisers competing in this auction, and whichever one ultimately is willing to bid the most wins the auction and then their ad is displayed to the customer when the page loads.

Because the process is automated and the maximum price each advertiser is willing to bid for the impression has already been programmed in, the auction can be completed within the milliseconds it takes for the page to load. Our simple infographic takes you through 6 steps that explain how programmatic marketing works.

What are the advantages of Programmatic Marketing?

Programmatic marketing opens up a series of opportunities, which would not be possible if ad placement was done manually, as it has been done in the past. It allows advertisers to procure digital media without having to pre-negotiate a price, so they pay only for the relevant impression that they actually receive. They can also sign up for a minimum number of impressions or a minimum budget, which makes digital advertising more flexible, and they can buy digital media across publishers, which reduced administration costs.

But the opportunities are much greater than just making ad buying easier and more flexible. Because programmatic marketing means bids are arranged for each individual accessing the site people can be targeted to a far greater extent than before.

Using customer data, Programmatic technology can identify what resonates with each individual and target him or her on the sites on the sites they are most likely to engage with and at the time they are most likely to engage.

Ad blockers effect on Programmatic Advertising

With the advancement of Programmatic ads, consumers are becoming frequently aware of their personal data usage and ads that "stalk" them across the internet. Thus, a popularity in adblockers has risen within the last couple of years. Reasons for using an adblocker vary depending on a user's personal concerns and which country they reside in. 

With this growing concern over data security, marketers will need to become more approachable and evolve their advertising. Some publishers are now not allowing users to view their site at all if they are using adblockers. However, restricting the number of retargeted ads will limit the feeling of "stalking", which may prove more effective in gaining users trust and removing the negative stigma surrounding online ads.

Global programmatic ad spend

This is why customer data is becoming so highly valued (one of many reasons), and why programmatic advertising is growing so fast - it was projected to become where the majority of non-search digital ad spend went by the end of 2015. It was revealed at the end of 2017 advertisers will have spent an estimated ￡3.39 billion on programmatic trading. This is a 23.5% rise from the year before. Programmatic spend now equates to 79% of all UK digital ad spend, as reported by MarketingTech.

According to a study from the World Federation of Advertisers, Programmatic is most popular in North America, with 31% of digital budgets allocated to it in 2017/18. Those less keen on automated buying are Latin America and China, both are allocating it 20% of digital spend.

If we talk about our country, this concept is at its nascent stage.

Why should we adopt Progmammatic Marketing? There are several reasons for the same.

1. Buy more ad impressions, pay less intermediary fees

A typical ad buy involves multiple intermediaries – such as agencies, DSP, Ad exchanges, SSP, and publishers. Studies show that 60% of the digital advertising budgets goes towards intermediary fees and only the remainder is actually deployed in buying media. A brand with a digital budget of Rs 100 crores may have only spend Rs 60 crores buying impressions, with the rest consumed by intermediary fees. Programmatic ad platforms help by providing a complete transparency to the cost chain and lets you unlock at least 20% of the wasted budget. This is made possible by providing visibility to the exact fees associated with every single intermediary in the supply chain thereby enabling smart advertisers to plan the most optimal path to delivering the impressions to the audience. This money is now available to buy more ad inventory or reduce your overall CPM or CPCV.

2. AD fraud reduction

A significant proportion of your display advertising budget is lost to invalid traffic that includes bots and other fraudulent means deployed to divert your hard-won budgets. As per recent research, 9% of display ads and 22% of video spending were wasted on bots. This is estimated to be much higher in India. A good programmatic platform provides marketers with complete control of the publishers they want to use to target audiences. In addition, with built-in capabilities to block bots and fake pre-rolls and other type of fraud, programmatic platforms help reduce wastage. Moreover, platforms like Adobe have a non-human traffic credit program that compensates in cases where fraud manages to slip through.

3. Ads delivered in a brand safe environment

Brand safety is emerging as a top concern for brand managers. 99% of advertisers are worried about the content alongside which their brand ads are being displayed and 45% of them feel that media partners are doing a poor job of ensuring a brand safe environment. Marketers, as brand custodians, must be wary of their advertisements showing up alongside objectionable or offensive material such as racist, pirated, hate or adult content. A programmatic platform can minimize the possibility of your ads being run in an unsafe environment. These platforms have specialized media quality teams that screen inventory and remove any unsafe ones.

4. Ads become contextual, relevant and respectful of consumer privacy

52% of internet users in India employ some of form of ad-blocking tool. The rise in ad-blocking behavior can be attributed to poor hygiene by advertisers – not respecting consumer privacy, allowing pesky ads that block content, using auto-play audio, etc. But the most causative of the ad blocking behavior is irrelevant and non-contextual targeting. For example, consumers are served ads and shown offers for products that they have already bought, hotel rooms ads long after the holiday is completed, airline ticket offers after they have booked, or offers to loyal customers who don’t need the added incentive. This is wasteful advertising. And even worse, consumers think that brands executing this way are clueless or foolish. Programmatic advertising platforms help to avoid disconnected experiences by leveraging consumer and prospect data integrated from various sources and stitched together to drive relevant and contextual communication. Programmatic can use CRM and loyalty data to suppress an ad or advertise the right offer to loyal consumers.

One brand that has personalized it’s programmatic experiences is OCBC, Singapore’s oldest bank. OCBC’s marketing team wanted to optimise paid search and media buys to reach more customers and achieve greater returns on digital marketing. Campaign by campaign, the bank has systematically measured, tested, and refined its approach to reach audiences more efficiently. Discover how OCBC has now seen a 23% boost in video completion rates at half the cost per view, and a 25% increase in conversions witout increasing spend.

5. Rapid advances in ad technology

There are two types of technology changes that are at play in the programmatic space. One type of technology advancement is in the core programmatic tech stack. Machine Learning makes possible capabilities such as predictive spend recommendations, forecasting campaign performance.

The other advancement is happening at the channel level. There are newer forms of digital channels emerging that only programmatic can tap into. Programmatic TV is already one of the fastest growing digital channels in the US and has become an easy one for advertisers to buy TV spots like they would buy ad inventory on an website. Abhay Singhal, Co-Founder & CRO at inMobi, says they’ve already started to classify channels like connected TV and billboards under ‘mobile’ because they are channels that are quickly becoming smarter, more programmatic, and, ultimately, more mobile.

India’s advertising community is increasingly discussing programmatic though it’s extremely nascent. As programmatic audio and “out of home” channels continue to emerge, we may see that interest accelerate.

The future is programmatic

It is forecasted that in 2019 about two-thirds of all digital display ads will be programmatic, reaching around $84.9 billion in total spend. Pioneering marketers have already started seeing the value of programmatic in India. Those that have not considered programmatic buying should seriously consider it as option to helps them buy more media with every dollar of media money, safeguard against ad fraud and enable more data-driven automation.

These are the top five reasons for adopting programmatic, but there are many more. If you need to know more and want to include it in you Bucket/Funnel....Please feel free to contact us: