There has been a surge in programmatic buying among online marketers in the past two years.
A recent review by the Association of National Advertisers (ANA) and Forrester, found 79 percent of buyers surveyed bought programmatically in the past year, more than doubling the results of a similar survey in 2014.
The increase is no surprise. Marketers have discovered the value of programmatic ad buying to refine their audience targeting capabilities and to do it at scale.
Improving Programmatic Outreach
The question is no longer whether marketers should buy media programmatically, but rather, "How can marketers improve their programmatic outreach to audiences?"
To answer this question, it helps to take a closer look at the fundamentals of buying programmatically as well as the buying tactics involved in the process.
1. Advanced Audience Targeting
Programmatic buying assists marketers in reaching their desired audiences in a scaled fashion. It enables them to perform an accurate targeting in curated or open marketplaces that are designated for this type of trade.
They can “listen” to traffic from multiple sources and match their first (or third) party client data with the inventory they stream in.
While doing this, digital marketers can pay for exactly what they bid on without the need for a pass-back arrangement.
Through programmatic buying, one can ensure that the message will reach the right audience, across the right channel, and at the right timing. This results in increased ROI.
To improve upon the programmatic experience and enhance its results, marketers can incorporate technology into their strategies. Through the use of Data Management Platforms (DMPs), brands can find or build robust audience segments to meet their ad KPIs, such as average income, age, gender, and other demographics.
This also includes unifying audiences’ data across multiple channels and devices. Additionally, when expanding marketing strategies, marketers should expand their attribution metrics, too.
Buying programmatically broadens marketers’ reach. It gives brands potential exposure to a wider range of inventory sources (such as supply side platforms (SSPs), Exchanges, Ad Networks, etc.), in real-time, instead of having to settle for inventory on individual websites and media houses.
However, widening the pipelines might open marketers to more fraudulent traffic and/or lower quality inventory sources with lower or no viewability rates.
These types of traffic certainly do not meet marketers’ KPIs and, thus, would not be covered. To combat the industry’s transparency challenge, one would have to keep pace with (third-party) tools to verify and validate traffic at scale.
3. Programmatic Bidding Methods
Programmatic is certainly enhancing the way publishers and marketers interact with each other in the digital space. Transactions have become more efficient and, as a result, more premium ad inventory is available for programmatic bidding.
There are two leading methods of programmatic bidding (whether tag-based or via Real-Time Bidding): Buying via the open exchanges/markets and buying via Private Marketplace Deal / Deal ID. Both have pros and cons for marketers.
- Open exchange/market transactions: Here, the buyer (i.e., the agency or any of the Demand Side Platforms) can elect to “listen” to the traffic stream and bid on the chosen media according to certain KPIs; the buyer in this case would use a bidding form that is waterfall-based. The higher the bid, the better the chances to win a given impression. This method enhances the buyer’s flexibility whereas the seller lacks transparency over the winning bid.
- Private marketplace deal (known as a Deal ID): This method is also known as an invitation-only auction or a private auction. It is one that requires the terms to be negotiated first between the publisher and the marketer(s). These terms are formalized by a deal ID and then passed in the bid request and bid response. This allows the publisher and marketer to identify each other and optimize their yield on a given set of impressions.
Effective and trained buyers strive to reach the right mix of both tactics at any given time. Doing so will preserve the advantages of each method against the campaign’s KPIs dictated by their demand clients.
Programmatic Is Complex
To improve their programmatic ad output, marketers should weigh the impact of audience targeting, scale and buying methods.
The programmatic industry is complex.
Getting a deeper understanding of the supply chain will help marketers know how to navigate through this space and benefit from higher yields at scale.
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