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Programmatic 101: Back to Basics

Recently I had the pleasure of meeting with with Brian Stone, VP of West Coast Sales at Adroit Digital. Just two guys meeting up for coffee to discuss specific innovations and challenges that surround the world of digital marketing... no big deal.

I take that back, it is a big deal. Seriously.

As our world of digital marketing (and advertising within it) continues to evolve and change, it's beyond important to keep your ears open and listen to the noise - you could find a tune worth listening to. While programmatic advertising may go beyond some of our budgets, let alone our understanding, we need to listen to it.

In meeting with Brian he explained that marketers are turning to big data to funnel millions of dollars into programmatic advertising, but studies show that only 20 percent actually know what programmatic is and how it works. He further expressed that many programmatic campaigns are falling short, but, advertisers can (with the right tips and tools) mitigate fraud and better hone and measure their results.

Adroit Digital's, Avi Spivack, has concisely laid out out the basics of programmatic. What it is, and how to properly utilize it to obtain measurable success with your advertising media efforts.

Programmatic 101: Back to Basics
By Avi Spivack, Director of Product Marketing, Adroit Digital

Given the rapid pace at which advancements in marketing technology emerge, advertisers often struggle to keep up. This leaves many advertisers operating in a constant state of catch-up, and the struggle today is how best to evolve to keep up – both personally and organizationally.

Buying digital media through “programmatic” channels is a perfect example. A recent poll by the Association of National Advertisers and Forrester found that only 23% of senior marketers polled understood the concept of programmatic and currently use it to execute campaigns. If you’re part of the other 77% you may be wondering what’s so revolutionary. To find out for yourself, you’ll need to develop a basic understanding of programmatic buying benefits advertisers and why so many advertisers are starting to take advantage of it. So, let’s start with a few of the basics here:

What is programmatic?
Simply stated, buying media programmatically means the process is executed using technology: what was once done person-to-person (via phone) is now done machine-to-machine. Traditionally, programmatic has existed in the realm of exchanged-based auctions, but that was just the beginning. In today’s environment, direct media buys have begun to move through programmatic channels as well. The digital media buying environment is changing – both technologically and economically – and any media buying that can be automated will be.

Programmatic is not automatic?
Programmatic’s origins sprang from a need to increase media buying efficiency at scale, but buying media programmatically alone doesn’t necessarily ensure efficacy. It’s not as simple as “set it and forget it” advertising — there’s much more to it than that. Programmatic is based in technology, but the human element remains a critical part of the process to drive the best results. To use programmatic most effectively, advertisers should consider engaging highly trained and educated experts in programmatic buying, either internally or externally but ideally both. Machines can sort through the massive amounts of data that inform programmatic buying and draw correlations in specific events and activities. However, it takes a human to determine if the correlations are related or unrelated, important to inform a buy or irrelevant. The true power of programmatic is unlocked when the right data is combined with the right media to inform the technological decisions to purchase the desired audience.

Why is programmatic everywhere these days?
Programmatic is a natural evolutionary byproduct of the growth of the Internet. As more and more content is added to the Internet, more ad inventory is created to support it. The number of buyers and sellers is staggering. Given this scale it would be impossible to manually buy and sell just a fraction of this ad inventory. A machine-to-machine (programmatic) solution was a logical answer to an understood and foreseen problem.

What are some best practices of programmatic?
The key to maximizing programmatic is twofold. First, it’s critical to understand where programmatic fits as a part of your overall media strategy. Programmatic itself isn’t a strategy. It’s a tactic used as one element of a strategy. Second, understand your data. Using the right data to align to a specified goal is crucial to a campaign’s, and your strategy’s, overall success. If this proves to be an organizational challenge, you should consider partnering with a provider who can help you navigate the programmatic landscape.

A programmatic best practices check list seamlessly combines five things: people, data, technology, creative content, and analytics.

What are some challenges associated with programmatic?
The biggest challenge facing advertisers is the lack of understanding of what programmatic is and how it can best be used as a tool to drive success in digital channels. Many marketers are struggling with some core issues: they are unsure of how to incorporate programmatic into their current strategies and how to merge this new approach with their more traditional advertising strategies and tactics.

Another hurdle is a gap in the talent pool between less tech-savvy marketers vs. the new school marketers, who rely on technology. Success today will require a different kind of marketer. Success in programmatic depends on a new breed of marketer with a blend of the technical and the creative. This marketing hybrid is evolving in parallel with the technology around them.

What is the future of programmatic?
The reality is that programmatic is the future of digital advertising and it’s here. Major brand advertisers Proctor & Gamble and American Express recently announced they plan to move the majority of their digital ad budgets to programmatic. This is a signal to demonstrate that they recognize the value programmatic offers and they understand where the industry is heading. Consumers are shifting media consumption habits and major brand advertisers are shifting the way they buy media to keep pace.

The ad tech industry will continue to evolve quickly and the key to success lies in an organization’s ability to remain as agile as the ad tech ecosystem in which they operate.

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