The Application of Programmatic and its Nuances
Caspar SchlickumDecember 9, 2014
“Programmatic,” and the various acronyms and technologies that surround it, is without a doubt the buzzword of the marketing industry today.
Two recent studies, when taken together, show why this might be the case. A study by the CMO Council shows that 63% of CMO’s see “improved segmentation and targeting” as the best way to maximise the “impact and value of marketing” in their organisations in the next year.
Another study, this time by WARC, asks what marketers feel are “the key benefits of programmatic”. “Improved targeting” (55%) is the clear winner, with “reduced waste” (35%) coming in strongly as well.
So marketers are clearly seeing the opportunity that programmatic represents, and how to apply this to the real-world marketing challenges that their brands and businesses face today.
Taking Care with Programmatic
But some care needs to be taken, as programmatic is a very broad term that can be applied in many different ways, and not always with the right outcome. As always when new technologies are applied to old problems, new problems arise. Far from creating process efficiencies, new processes need to be learned.
So let’s be clear. While programmatic without a doubt plays a revolutionary role in our industry, marketers (and their agencies, advisers and suppliers) need to understand that there are some key nuances in its application:
1. Programmatic trading is not the same as programmatic execution.
One key difference within the programmatic space is the application of technology to trading (that is, the transacting of media) versus execution (the targeting and placement of the actual ad). Real Time Bidding (RTB) is about using technology for trading, in an open exchange. But this is far from the only way to “do programmatic”.
In fact, it may not be in your interests to do so. With RTB, you are not able to get the best media at the best price (see below on fraud and viewability) as you will be in an auction competing with everyone else. The opportunities programmatic brings are much broader and deeper than buying media using RTB.
2. Fraud and viewability are made worse because of technology, not better.
Let’s face it, neither of these issues is new. But both are made significantly worse in an ecosystem where we rely solely on technology to make trading decisions. And though applying more technology to the problem is part of the solution (certainly it helps us to understand where ads are going), it is ultimately not something we can rely on to solve the problem.
The best way to beat fraud and increase viewability is to do what our industry had always done: bring publishers and buyers together, and agree on media, pricing, create private exchanges - or better yet, a pool of inventory across which we can then use technology to execute programmatically.In fact with the proliferation of technologies and the opportunities these create, I would argue that the media agency’s role is more important now than it ever has been.
3. Data is key – invest in it, but don’t silo it.
Data is the lifeblood in this new ecosystem. Data instructs the signal to place an ad, but here again, we need to be careful about how we all think about data. Not all data is the same and not all data does the same thing. Clients should think about their data, and use data management platforms to make it actionable.
But don’t get obsessed with big data. Big is not better. Think about the use cases, and then decide what data you need and in what form. And break through the silos.
Yes, data is valuable, but only if you actually use it. Understand how your partners want and need to use your data to help drive results. And understand what data they bring to the table to augment yours. It still amazes us how many of our clients talk to us about their big data ambitions, but won’t let us put a tracking pixel on their homepage.
4. People are more important than ever.
Technology is a people business. Today, we need to attract a very different type of person into our businesses, and for the first time the people that our clients are hiring are the same people their agencies are hiring: data scientists, technologists, etc. Ultimately, this is a good thing, as I have to believe that as the level of education rises across the industry we will evolve further and faster with all the tools we have at our disposal.
5. Ignore creative at your peril.
It’s easy to think that programmatic is just about standard ad sizes, and dynamically created ads. It is not, and I think the lack of engagement from this programmatic industry of ours with the creative side of the industry is one of the biggest impediments to our long term success.
6. A word on transparency and disclosure.
There are many forms of transparency and disclosure and brands need to educate themselves about how they want to take advantage of these new opportunities. Ultimately, the assessment should be the same as it is with every other decision about how to spend your marketing budget: does the solution you are using add (real) value for your business, based on what it is costing you.
I have highlighted some of the complexities and opportunities of benefitting from this brave new programmatic world. There are many options and ways to do so, many pitfalls and much to be gained. Just like most things, it’s not one size fits all. Understanding the dynamics, and how your partners approach these, is the key to success.