Lecture 4.1: Introducing Programmatic Buying of Display Ads

In Chapter 4, (The Art of Digital Marketing) you learned the four stage iterative process of creating effective digital display as. The following article introduces the “programmatic buying” for display ads. As you will see, this automated technology for purchasing displays has many advantages over the traditional manual purchase methods.


AN INTRODUCTION TO PROGRAMMATIC BUYING

source: Retargeter Blog

As online advertising technology improves, new methods are constantly being tested to create efficiencies around the buying of ad space. Recently, media buyers are moving to add programmatic buying to their online advertising tool belt.  Many agencies are leveraging tech partners with access to ad exchanges, while others have chosen to develop their own trading desks to allow them to buy media themselves. Last year, revenues attributed to real-time bidding (the backbone of programmatic buying) reached $1.6 billion and 34% of all display advertising revenues are projected. In the near future, programmatic buying will be essential to any media buyer’s digital strategy.

What is Programmatic Buying?

Programmatic buying is powerful to advertisers because it automates all of the processes that used to give them headaches. With RTB, a buyer can set parameters such as bid price and network reach. A programmatic buy will layer these parameters with behavioral or audience data all within the same platform.

James Moore, CRO for Simpli.fi explains, “This means marketing professionals can define the budget, goals, and attribution model while the platform rapidly adjusts dozens of variables in real time based on performance to determine the right campaign settings to achieve the desired ROI.”

Algorithms that filter impressions based on behavioral data allow online advertisers to spend more time being creative and less time reading spreadsheets.

The Value of Programmatic Buying

Automated media planning through ad exchanges and DSPs provides enormous benefits to both direct response and brand advertisers. Programmatic buying offers a 100% transparent pricing model. Buyers can leverage third party data to automatically cherry pick impressions and optimize at the impression level. Programmatic buying automates the placement process by selecting who to serve impressions to based on data an advertiser thinks is pertinent to the campaign. In a programmatic campaign, an ad may only show on a specific website if the correct person is browsing that site.

Chief Digital Officer at OMD, Ben Winkler, weighs in on what this greater control can accomplish for buyers. Winkler suggests running a targeted ad buy based on your existing knowledge of customer traits to create a pool of users interested in your brand. Another option, site-based retargeting, can create a more qualified pool comprised of previous visitors to your site. By building “a custom pool of users who you know will want to engage [with] your brand,”buyers can “use those insights to adjust their site list or creative executions.”

The Myth of Remnant Inventory

Advertisers are concerned that programmatic buying will only provide access to low quality, or “remnant” inventory, but this is simply not the case. In fact, many premium websites accessible through ad exchanges don’t classify any of their inventory as remnant because all of their available ad space is high quality. Skeptics concerned with brand building are hung up on “sure things” like direct ad buys, but some brand-centric advertisers such as Ford have found a happy balance. Buying media requires an integrated approach, and programmatic buying is a vital component.

Is Programmatic Buying the Future?

As the technology advances, buyers’ approaches to programmatic buying will become more sophisticated. Recently, an advanced ecosystem has formed around programmatic buying with specialized providers leading the way and some larger agencies building in-house platforms. It’s safe to say programmatic buying will eventually have a dominant market share of online display buying. With the addition of RTB* to social networks like Facebook, new strategies will present themselves that weren’t previously possible. Like many digital advertising trends, programmatic buying has evolved rapidly to become an essential tool.

*Real-time bidding (RTB) is a means by which advertising inventory is bought and sold on a per-impression basis, via programmatic instantaneous auction, similar to financial markets.

Lecture 4.2: Trends in Programmatic Buying of Display Ads

Six Key Programmatic Advertising Trends for 2019

source: Entrepenuer.com l Saurabh Bhatia

The rise in programmatic advertising is no surprise center of discussion in ad tech industry. Zenith forecasts that ad spends in programmatic will grow 19% in 2019, reaching USD 84 billion. In fact, it is estimated that 65% of global digital ad spend is expected to be traded programmatically by 2019.

While programmatic consolidates its position as the most important method of digital advertising, we examine the key trends that are likely to shape the future of programmatic advertising.

1. Video Will Remain the Top Media Buy Among all Ad Formats

The reason is quite obvious – Mobile video is the fastest-growing consumption channel among consumers and currently takes the greatest share of time spent. It is also quite obvious that users who watch video on their mobile devices are giving it their full attention. Mobile video is also playing a pivotal role in influencing and enhancing the purchasing journey. That’s why mobile video ad spending is already growing faster than any other digital advertising format, and the momentum is going to continue.

2. In-App Will Continue to Dominate

Mobile users have gradually moved away from using their mobile browsers to focus on a wide range of apps across various verticals. This affinity towards in-app has forced advertisers to shift their ad spend more towards in-app advertising. Additionally, in-app advertising offers marketers a better opportunity to target the right audience with the availability of location data, device identifiers via in-app SDKs and enhanced user engagement due to effective in-app ad formats. Also, the rapid adoption of In-App header bidding (unified auction) model enables a fair and transparent auction which will contribute to further growth of in-app advertising.

3. A desperate Industry-wide Push Towards Tackling Ad Fraud

2018 has seen some major revelations on ad fraud creeping in programmatic and especially in mobile apps. With millions of dollars lost in ad fraud, the extent of the problem is huge. A silver lining is the fact that a majority of the ad tech vendors, advertisers & publishers have started collaborating or partnered with specialized third-party fraud detection partners to tackle this menace. 2019 will see first-ever massive industry effort to combat fraud and eventually a decrease in ad fraud numbers.

The Trustworthy Accountability Group (TAG) claims that a clean supply reduces the ad fraud by 84% as compared to the industry average when all members in the supply chain are attentive. Pixalate’s Ads.txt trends report highlights that Ads.txt adoption increased over 5.4x over the first half of 2018 and on average, sites with ads.txt have a 10% lower IVT (Invalid Traffic) rate compared to sites without ads.txt.

4. Managed Services will be Replaced by PMP Programmatic Buys

Advertisers and their agencies are keen to invest in solutions that offer them operational efficiency while keeping the optimum performance for each campaign. Private Marketplace (PMP) transactions are regarded as a major factor for driving down the fixed cost of media as they bridge the gap between traditional direct sales model (IO based buying) and automated framework. Additionally, PMPs offer better targeting capabilities via real-time programmatic auction. With PMPs offering efficiencies to a sales process, the ability to target specific audiences and real-time optimization, PMPs are set to replace managed services in coming years.

5. AI in Programmatic will Unlock Untapped Efficiency

Artificial intelligence promises to unlock new understanding of users’ behavior as well as improving the optimization of the overall auction process. With the help of Artificial Intelligence, bids can be adjusted and responded to in real-time based on deep-level data analytics. This promises to improve the overall auction process and avoid unnecessary participation in the bids that are outside the advertiser’s threshold, hence reducing the administration costs. There are other numerous scenarios where artificial intelligence will step into programmatic in near future to deliver the best solutions for publishers, brands, and agencies.

Some examples include:

  • more accurate targeting
  • prediction of probable user behavior with certain ad units
  • discovering the probability of a conversion from an impression served.

6. Moving Programmatic In-House Won’t be Sustainable

There has been a lot of buzz around bringing programmatic in-house. But there are some concerns about taking programmatic in-house.

  • Continuous Investment to ensure that the organization stays on top of the ongoing advancements in technology like in-app header bidding, RTB 3.0, AI and more.
  • Skilled Talent Pool– Programmatic calls for experts who have an understanding of underlying tech, data, marketing objective as well as consumer behavior. Treating programmatic just as a trading tool will undermine the real efficiencies it brings to ad campaigns.
  • Tech Infrastructure– Programmatic advertising is a highly technical field and moving it in-house requires a tech stack that can handle a load of data efficiently. With video being the mainstream ad format nowadays, organizations are looking at infrastructure to support Terabytes of data in real-time.

Programmatic advertising is the automated buying and selling of online advertising. … Computers and algorithms make the ad buying, placement and optimization process more efficient, remove mundane activities and cut down on time to market.

WHAT IS PROGRAMMATIC ADVERTISING

Effectively capturing the attention of consumers in today’s digital ecosystem is no easy task, which is why we’re going to talk about Programmatic Advertising today. There are millions of websites, applications and digital properties being viewed across a variety of channels, all day, everyday.

Having to use separate platforms to advertise on different channels and having to select the best places to put your advertisements in the digital world is an increasingly daunting task.

Programmatic advertising solves this.

Programmatic advertising is the automated buying and selling of online advertising.

This automation makes transactions efficient and more effective, streamlining the process and consolidating your digital advertising efforts in one technology platform.

Programmatic platforms have been growing their inventory and database such that any format and any channel can be accessed programmatically today, including mobile, desktop, tablet, audio, digital outdoor and connected TV.

Targeting tactics are used to segment audiences using data so that advertisers only pay for ads delivered to the right people at the right time, and depend less on the “spray and pray” method of digital advertising. Computers and algorithms make the ad buying, placement and optimization process more efficient, remove mundane activities and cut down on time to market.

An Example of How Programmatic Advertising Works IRL: 

Advertiser Totally Tubular wants to sell more surfboards 

It hires a programmatic advertising platform that is able to identify online consumers by things like: 

  • demographics (male / female / 18 – 45),
  • geography (3 min from a beach),
  • interests (surfing, saltwater, California),
  • behaviours (consume surfing content on their lunch break),
  • time of day (7-10PM)
  • weather (sunny)
  • device (smartphones) 

The platform then uses real-time data to identify the best online audience(s) for the campaign and buys digital ad inventory through an auction based on everything available across multiple devices, in places the audience cares about. 

Advertisements are personalized based on each consumers unique interests and behaviors. 

Intelligent connections are made, insights are generated, and performance is optimized.

Should I care?

Programmatic advertising contributed US$25.48 billion to the digital advertising market in 2016, up from $17.5 billion in 2015, according to eMarketer. By 2019, it is projected to reach US$45.72 billion, meaning the industry will have grown more than two and a half times over just four years.

What’s the secret to success for programmatic platforms? 

At the heart of every programmatic advertising platform is a proprietary machine learning algorithm that analyzes campaign inputs and user behavior so real-time campaign optimizations can be made and audiences that are most likely to convert are identified and targeted. A number of different types of data come into play to enhance the probability of a campaign’s success.

So, What Are The Benefits?

There are multiple benefits to using a programmatic advertising platform for all your digital advertising efforts. First and foremost, programmatic advertising helps buyers and sellers make data-driven decisions and removes the guesswork from the ad buying process.

Here are a few additional benefits of programmatic advertising:

It’s good for your budget. Programmatic technology creates efficiencies by using machine learning to optimize campaign success, avoiding ineffective inventory.

Better targeting. You will be hard put to find a technology platform that allows you to target across as many different tactics, across devices, in real-time.

Streamlined campaign management. Consolidating campaigns in one system across devices and formats allows you to visualize success in one place.

Easy access to ad inventories. Advertisers are able to access the optimal inventory across a variety of exchanges at once, and allow the algorithm to do the heavy lifting in bidding.

 

Is Programmatic the Future of Advertising?

Programmatic advertising enables marketers to more effectively funnel messaging across desired channels and optimize Share of Attention(R), to reach the most desirable markets and demographics, and use data to pinpoint new opportunities.

Through automation and machine learning, programmatic creates an environment that enables marketers to reach their most meaningful audiences more efficiently than ever before using digital media to deliver the best results.

However, programmatic is not the future of advertising, it’s already here. If you are not taking advantage of its potential in some capacity already, you are missing out on the potential to save money and see better performance in your online advertising campaigns.