The marketing industry has undergone many minor revolutions since the turn to digital media, but it is in programmatic marketing that we are beginning to see the full potential of advertising with the unison of computers, search engines, social media, algorithms, Google ads, ‘big data’ and targeted content.
For some time, there’s been enough data emerging in the industry to show that TV advertising is on the way out, being replaced with the might and weight of web-based advertising, following the bend of consumers as they migrate into the online world. So, it’s in the entire digital and web-based programmatic marketing that we can expect to see great leaps in the coming years.
Below you’ll find some HC Media Group’s answers to the questions you have concerning what’s being largely touted as the future of digital marketing. The sooner you get your head around programmatic marketing, the sooner you’ll be able to harness its unprecedented power.
What is Programmatic Marketing?
As the new upstart in the digital marketing sphere, programmatic marketing brings something new to the targeted advertising game. Put simply; it’s exactly that. A new form of targeted advertising that’s guaranteed to promote content at a more efficient rate. Why? Well, it’s all in the algorithms.
Crucially utilizing the power of complex and well-adapted algorithms to seize targeted advertising opportunities in real time, programmatic marketing looks a bit like the zenith of digital marketing. It can smoothly deploy ads to a target demographic in super-quick time. Using it, you’ll be able to target ads based on the usually expected demographics – those all-important variables – without going through the considerable labor of finding the right time and place to drop an advert and negotiating a lock-in contract with the publishing client.
How does Programmatic Marketing work?
The algorithms involved in programmatic marketing are what’s going on under the bonnet, saving marketers time and effort and ultimately streamlining the process of getting a targeted advert out there. Rest easy that the code has been tried and tested for some time now and will only improve in time.
Let’s look at the process. A web user clicks onto a website with an advertising space that is configurable with programmatic advertising. Their web profile gives clues as to their demographic and therefore determines their value as a consumer to a variety of marketers. These marketers engage in an auction to decide who will assume the advertising space on the page, with the highest bid winning and presenting their advert to the website’s visitor.
The algorithms are what shortens this process, which you’d expect to go on long after the visitor has left the site, into the milliseconds, with all the values and prices predetermined so that each auction is a flash of competing numbers resulting in a winner being drawn and displayed. In this way, programmatic advertising achieves efficiency, value, streamlining and targeting all at once.
Why now?
This great leap in advertising may seem a no-brainer, but it’s taken technology and its developers a long time to join the dots for its use in the digital marketing realm. Consider the elements that make programmatic marketing possible, and there are many. The ability to assign values to each web user based on their activity and profile, and the ability to call up these values instantaneously. The ability to coordinate some marketing agencies together in an auction; and finally the all-important ability to crunch all the numbers through an algorithm that analyses and presents the final result in well under a second.
It’s also a change that has been underway and imagined for some time and, although in the past three to four years many brands have been playing catch-up with this fast-moving technology-based form of advertising, it’s the natural pinnacle of the targeted advertising dream, coupled with the pinnacle of what exactly algorithms can do to help industries. It’s happening in finance, it’s happening in healthcare, and it’s happening in marketing, too.
What changes does this bring?
Whenever a new form of marketing such as this hits the industry, there’s usually one thing that you can predict with certainty: other less efficient forms of advertising will suffer, becoming redundant and cost-ineffective when compared to programmatic marketing. Some of the statistics already surrounding the rise of programmatic marketing show its dominance in a wide field, with Google and other major names having led the doubling down on its use.
One of the most pleasant changes for all concerned is the relative ease with which adverts are now bought and sold. Instead of lengthily negotiating contracts that may be far from optimal in the long-run, you can merely set your price for each demographic of a web user and hope to win some auctions. When you do, you’ll know you’re displaying ads to exactly the right web user, pushing up the value of each won bid and creating a more optimal form of business.
What are the benefits?
As well as reducing the relative cost of each successfully delivered advert, programmatic marketing also boasts the desirable feature of feedback. It’ll provide metrics like viewability and click-through rates that will enable you to tailor your bid price as tightly as possible around the potential returns on each small investment. Already, major brands are enjoying the cost-ratio benefits of such advertising.
It’s in programmatic advertising that we’ll also see a move away from the kind of ‘spray and pray’ marketing techniques that are inadequate in the modern world of digital data and unique user tastes. An astronomical amount of money can be saved, and ultimately the industry will see a shift towards an algorithmic set-up to decide upon the right level of investment per ad per head.
Finally, much has been made of drawing from what leaders in the marketing world are calling ‘micro-moments.’ Those little sections of a web user’s daily experience that ordinary web-based marketing fails to register with. There are thousands of these per internet usage hour, and it’s programmatic marketing, with its ability to target advertisements instantaneously to specific users, that harnesses these infinite small moments that are so often missed by effective marketing thus far.
How can I use it?
Programmatic marketing is largely outsourced to agencies, who provide around 90% of UK-based companies with their technological solutions. While larger companies will be able to create in-house teams, SMEs and start-ups benefit the most from the ability to request from a media agency some programmatic assistance in marketing their brand, product or service. Of course, if you’re lucky enough to have an array of coding whizz-kids in your organization, then there’s certainly the viability for them to create, buy or borrow an algorithm that works for you before testing it out in the programmatic marketing space.
What’s in the data?
When considering the role of advertisers in the age of algorithmic decision-making, it’s now more than ever a case of crunching the numbers: just how much data do we have on consumers, where can we locate more, and at what cost? There’s already first-, second- and third-party data sets available to harvest at different costs, all with algorithm-friendly sets of data that will go towards deciding what kind of customer is clicking on the site, and whether they’ll be worth targeting. That said, the data means nothing without the programmatic marketing algorithms to match them up with a suitable ad, so it’s not exactly in the data that the secrets to this form of marketing are held.
What does the future hold?
As mentioned above, the future holds, almost certainly, a whole lot more of programmatic marketing than we presently see today. Whether it’ll exist in its current form, or whether it’ll gain from new algorithms and a more sophisticated level of marketing nous, we are yet to see.
There’s also a level of sophistication that programmatic advertising encourages in the industry in that it’ll keep everyone on their toes to create content that truly taps into each web user based on all the measured demographic predictors. Expect to see a continued upsurge in personalized content that will feel like an advert but somehow cozy and relatable to the web user.
That all said, there will still be a place for brand awareness advertising that is not so much concerned with individual user tastes as simply getting the brand seen and remembered. While the more specific advertisers will target increased use of programmatic marketing in the years to come, the larger companies and conglomerates may happily still keep their display ads ticking over.
It’s clear that programmatic marketing holds some key answers to the questions of marketing in the age of high-rate internet use, TV streaming, and the rise to ubiquity of smartphones. With a future becoming more and more enmeshed with big hauls of data and impressive algorithmic abilities to target more and more sophisticated adverts at better and better-known consumers, expect the world of programmatic marketing to continue its meteoric rise, seeing multiple developments along the way.
How do You Measure the Success of a Programmatic Marketing Campaign?
Heralded as the marketing rocket-fuel that many expected to ignite the industry, with its deployment of algorithms to target advertising on a bid-by-bid, view-by-view basis, programmatic marketing has been a big-picture success story since its inception. But how can companies utilizing such a form of marketing measure the success of a case-by-case basis, analyzing the hit-rates and click-throughs that determine whether your campaign strategy is paying off, producing the best value for money compared to other forms of marketing?
It’s a big question that looms over all marketing campaigns. Although there are tales aplenty of incredible percentage increases in webpage visits and sales in the case of programmatic marketing, there remains a concern. This concern wonders whether, in the bidding process which ultimately decides if you land the advert, you’re spending too much (or indeed, too little) on your programmatic marketing campaign to produce the most optimal returns. Happily, there are concrete ways of measuring how campaigns run on this system do so that you’re not forced to believe the hype where programmatic marketing is concerned simply.
What is Success Offered?
Briefly, it’s worth introducing the claims that programmatic marketing makes before expanding on the measurability of how justified it is in making such claims.
Programmatic marketing works in a different way to traditional forms of digital marketing. The ‘spray and pray’ form, which is the reflection of its colloquial name, is seen as inefficient as well as being almost entirely unmeasurable success-wise. Programmatic marketing is all about adverts targeted at demographic groups, analyzing the data held for web page visitors to determine whether the visitor is inside a demographic that’s worth advertising. If they are, you’ll make an unspoken, instantaneous digital bid to advertise to that consumer, and your advert will be displayed if your bid is the highest.
Programmatic marketing is deeply rooted in the kinds of data sets and algorithmic patterns that make campaign analysis easy. It’s unsurprising then, that as well as being touted as ‘the future’ of targeted marketing it’s also widely celebrated as one of the most concise when it comes to the feedback that companies can use to measure the success of their campaigns.
What is Measured?
As with most digital marketing, success is measured along some key metrics that most in the industry will be more than aware of. The list of how many clicks an advertisement earns, and whether these consumers who click through eventually go on to make a purchase. It’s simple data that can be traced through the movement of a web user on different internet pages to the virtual checkout.
As well as this eternal aim of marketing, there’s a second measure that comes into play when using programmatic marketing as a source of business, and that’s whether you win any bids. Measuring this is what the competing marketing agencies and marketed companies will want to focus on as their campaigns develop, and they analyze their sales and traffic data connected with this particular campaign.
Taken together, you’ll be able to see not only the success of targeted advertisements when they’re placed, but you’ll also be able to perform the cost-value analysis that involves the crunching of both datasets to optimize value. You may need to increase the amount of your bid slightly in the auction process to secure more ads or you may find you’re winning a few too many bids and that you can afford to reduce your price slightly.
How is Success Measured?
The success of programmatic marketing campaigns is demonstrated by an overall return on investment measurement, or ROI. Marketing companies hope to offer an impressive ROI through metrics that present the merits of embarking on a programmatic marketing campaign.
Basic ROI
The first port of call when measuring ROI on an online business involves click-throughs to the site, browsing time, return time, sign-ups, and of course, sales. The information pathway here is clear and thanks to the fact that data and algorithms are integral in the very form of this kind of advertising, you’ll be able to view the digital success rates of such a targeted campaign in real time. Furthermore, you’ll have accurate data visualizations that will ultimately map the increased percentages that the campaign has garnered.
Here, then, marketing and media companies will work hard to select key metrics that suggest the success and merits of a programmatic marketing strategy, measuring all those metrics that can be connected to a significant ROI and present them in infographics to the client. It’s the easiest way of measuring success and will determine where the strategy might go.
Demography
There are also demographic measurements. The data that can be analyzed regarding what the most valuable demographic may be to target an advertisement at. This works similarly to traditional ROI methods in that the journey of a customer is tracked from advert to purchase. However, it measures the digital footprint of the individual to say, for instance, that a certain age group located in a certain geographical position, with certain social status and a certain set of interests is the most likely to respond to any given advertisement.
This is an effective form of personalized optimization, and it’s something that marketing specialists are rather good at. By analyzing performance on an individual basis, your strategy will develop to increase the ROI, ensuring that no money is wasted in what is already a delightful streamlined process of bidding for adverts to the target audience you desire. Subtly adjusting which target you bid for will reveal some valuable nuances to increase success.
Bid Cost
On the virtual and near-instant auction for adverts, you’ll know through the data returned how much you’re getting through to targeted customers, and this will ultimately reflect whether you should be spending a little differently regarding bid amounts.
For instance, a higher-than-average bid will win most auctions, meaning that the advert is always placed in front of the web user (a marketing ‘win’) but at a less than optimal rate of investment, seeing as you’re winning bids too easily. On the flip-side, a well-orchestrated campaign with well-constructed adverts can be floored by underbidding, which will ultimately mean your advert is too infrequently displayed to make the difference desired. Subtle adjustments to the bidding price will again optimize your activity to ensure the best ROI for your client.
Footfall
As well as measuring these more traditional forms of success rate, marketing agencies can go further by measuring the increased footfall into the physical stores in which advertised products are sold. Thanks to the ubiquity of mobile devices, 4G and Wifi, GPS tracking can be linked to the individual who was shown the programmatically-sent marketing content. It means their eventual visit to a local store can be measured, displaying an intriguing and potent form of success that’s completed offline through the online presence of the customer.
There are several examples of this kind of success story, and so an expert liaison between marketers, algorithm coders and data analysts will be able to help present companies investing in marketing with an entirely new and much-appreciated metric to measure success. It’s another of the features which set this ultra-modern form of digital marketing apart from the crowd.
Should Success be Measured?
There’s an additional quirk to the debate around programmatic marketing. Some marketers, contrary to the endless analysis that digital marketing usually demands, are suggesting that the best thing to do with this form of marketing is to sit back, relax, and let the algorithms do their work. After all, the algorithm is saving you regarding efficiency in the actual marketing side of the equation, and you’ll be saving on efficiency at the back end too if you decide to take a more hands-off approach to the analysis.
Now, that’s something that is likely to make more than a few marketing bods gasp with utopian dreams (or nightmares) where algorithms dictate a large part of our jobs. However, as such lines of code become more and more sophisticated, one of the factors to analyze may well be the need to analyze at all. Food for thought…
Conclusions
Programmatic marketing is, on paper, a revolutionary, cost-effective targeting strategy that should ensure an enviable ROI without costing clients a great deal and without tying them into contractual investments with publishing sites that turn out to be ineffective. On the surface, it’s a no-brainer to compute the advantages, although of course, a success measurement will be required both to drum up business and to assure clients that their investment is returning visitors and sales.
By measuring not only some key ROI metrics but also other data-driven metrics that’ll work to enhance the optimal deployment of programmatic marketing, marketing agencies will be able to show an increasingly attractive ROI to investing companies, tailoring new and more efficient campaigns to make the most effective marketing success stories.