It’s been with us for 3+ years already, and it’s proven to be successful for many companies. Programmatic advertising is a way to use automated technology and data to better target your audience with relevant ads, on the various online channels available to advertise. Let’s see what this means now, in 2019, and how can you make the most of it if you’re not there yet.
Programmatic advertising: the basics
The most basic definition of programmatic advertising is the use of software to buy ads in the online space. Traditionally, you would engage with each advertising channel to negotiate the ads, price, and timings. Whereas with programmatic advertising, you tell technology what you want, and it will do the work for you.
It doesn’t mean you can take your hands off entirely from advertising, but the process will be massively lighter on you. The human touch is still needed to optimize ads performance and adjust targets so that the results match the advertising campaign objectives. This way, you can spend more time on improving the outcomes on the go, and run successful campaigns.
Programmatic advertising isn’t perfect, and that’s why monitoring it and adjusting it by a real person is needed. For example, in 2017, big brands excluded YouTube from their automated advertisement as the platform couldn’t guarantee its ads won’t show on extremist content.
But despite the exceptions and some minuses, programmatic advertising is successful, for the simple reason, it is so efficient. Spending continues to grow, as seen on the chart later in the article, and more and more companies feel left out if they’re not doing it. Day by day, technology improves as well, making it easier to work with complex requirements, data, and audiences.
To start such a programmatic advertising program, here are a few things you should be mindful of to make sure you do things the right way:
- Get to know the “T&C,” or, literally, the terms used in programmatic advertising. What do they mean and how things work. You will have lots of ideas, but do make sure you understand how they translate into the automated ads world
- Set your goals; this way, you can pick and choose the best ways to achieve them through programmatic advertising. Don’t just jump to it without knowing what you aim to get out of this investment
- Make sure you have someone in charge. While some platforms are fully-automated, others need a human to help out and finalize the setting up and running of the ads. Also, you will need skilled individuals to plan, optimize and control your buying
- Protect your brand. As mentioned, one downside of programmatic advertising is that you don’t control where your ads will show up. That is why maintaining the blacklist of websites to avoid is so essential in this case. If your brand is sensitive, you can also set up a whitelist of sites to advertise. No matter if you do it in-house or with an agency, make sure they do their best to protect your brand reputation.
IHG, the hotel chain that owns Intercontinental and Holiday Inn, begun running programmatic ads to encourage its customers to book directly through them instead of using third party sites like Expedia or Booking. These third parties run a commission between 15% and 24%, so a direct booking makes a significant difference in revenue. In their ads, they offered a “book direct” price option that was attractive in comparison to third parties offers. The program was a real success as it allowed them to target the right audience through the right digital environments and the right message. “By using advanced targeting capabilities through programmatic, we are able to find a broader range of people looking for accommodation and target them with our book direct message,” said IHG’s COO Matt Luscombe. Read the full story here.
Being a reputable media agency, The Globe and Mail relied on qualitative ad placements since 2012. With the introduction of programmatic advertising, they scaled up and put together a program called Programmatic Guaranteed, where they combine the automation benefits of real-time auctions with the safety and assurance of reserved ad buys. They invested in re-training their people, and they were the key to success in running the program and maintaining excellent client relationships. Technology came in second, as the tool to run the Guaranteed program successfully. Read the full story.
Trends for 2019 in programmatic advertising
According to the programmatic ad spent forecast report in the US for 2019, run by eMarketer, automation or programmatic advertising will account for 59.45 billion dollars this year, or 84.9% of the US digital display ad market. Of that, two-thirds of those automated dollars will go to mobile, and nearly one of every two ad dollars goes to video.
Also, there will be significant and constant growth in programmatic ad spending over the following years as well, directed mainly towards video, social and native instruments, reaching up to 87% of the total digital display ad spending in 2021, as shown in the forecast graph below.
With constant technological progress and advancement, programmatic advertising is becoming more sophisticated and able to offer solutions to more pretentious brands and needs. Some of the trends where programmatic advertising will improve or develop over the following years are personalization, programmatic TV, and in-housing.
Programmatic customization of messages to target the audiences in their buying journey is now becoming standard practice. The vast amount of data used by automated technology can now serve ads depending on variables such as location, device, weather, demographics, or time. The ads become more relevant and cost-effective. The significant advantage of using such technology is the fast feedback loop, which allows real-time adjustments and optimization.
Such an example is Mindshare Indonesia that served thousands of variations of ads dynamically targeting travelers based on the last destination they searched for on AirAsia’s website. It was not just a cost-saving exercise (reusing the same ad, setting it up once then letting it run for months), but it also generated higher ROI for the business.
Programmatic advertising is now helping to bridge the gap between TV advertising, on a fast decline, and digital advertising. With programmatic advertising, you will be able to purchase TV ads through automated technology. PWC predicts that programmatic TV will represent one-third of TV ad spending by 2021.
There are of course challenges to this, such as making sure ads are diverse enough and that the brands are protected, although things are continually improving, and the benefits are also sometimes worth taking some risks.
More and more brands switch from using an agency to in-house teams specialized in running programmatic programs. Their motivation is based on an increased need for control of the operations and brand reputation, but it is also a more cost-effective solution. By capitalizing on internal resources, they can gain more value for the ad spending.
The biggest challenge of making this switch is related to finding and keeping the outstanding people that can run such programs and benefit the business. That is why it’s safe to recommend a smooth transition from an agency to an internal department rather than making a move in one go.
That being said, running programmatic advertising is now the norm, and taking full advantage of this sooner rather than later will only benefit the business in the short, medium, and long term. In a world that is becoming more complex and noisier with every given second, making sure we promote our brand to the right people in the right moment and context are keys to a high ROI on our digital ad spending.