Capturing the right audience with programmatic buying
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Digital advertising has revolutionised the media industry and twenty years on, its momentum shows no signs of dwindling.
Ever since the first banner ad in 1994, we have witnessed the evolution of an infant platform grow into an advertising staple, rapidly surpassing the traditional mediums we once relied so heavily upon. Those two packed decades have brought us direct media buys, networks, real-time buying, mobile advertising, and a whole world of acronyms we are all trying to keep up with such as PPC, DMP, DSP and SSP.
Whilst we are still trying to get to grips with how all this affects our advertising campaigns, another stage of this evolution is beginning to creep in. To call programmatic buying the new kid on the block would be doing an injustice to all the digital groundwork that has allowed this intelligent system to flourish. But it has definitely changed the face of the online industry and it won’t be long before it is applied to the traditional, offline industry too. It is predicted that programmatic buying will grow at an average rate of 31% annually over the next four years, reaching $36.8 billion globally by 2019.
But what exactly is it?
Using complex algorithms, programmatic buying combines intelligent software with data in order to purchase audiences and people rather than impressions, in real time. In a nutshell, this means that it uses the same real-time methods that large networks (such as Google) use but it knows much more about the user before a decision is made to serve them an ad.
The power that programmatic has lies in the various data points it taps into - from information provided through forms filled in, to credit card purchases. In fact, in some markets, major life events can be accurately predicted from information provided by supermarket loyalty schemes.
Previously, tactics for predicting the value of an impression were based on broad demographic and behavioural signals. Now we are armed with many more resources to decide whether or not that person is valuable to us, including whether or not they are in the market to purchase. So now we can optimise and drive the funnel to conversion whether that is a sale, a sign-up or a registration, depending on what the aim of the campaign dictates.
Identifying the audience
With the introduction of CRM, mobile, multi-screen and offline purchase data we now know who these audiences are and who is actually buying, and most importantly, when. As most cookies are anonymous, programmatic processes observe signals and, with machine-learning, they detect patterns, making very educated and highly accurate guesses. This means that ads are served to people who are more likely to engage with them rather than being bombarded with irrelevant ads. Think of how much more you would know about a potential online consumer if you had insights into what they had purchased recently: A charity being able to isolate people who regularly donate to good causes, or a luxury brand who knows the user’s average income.
How is the audience targeted?
The process of targeting is then broken down into two stages: prospecting and retargeting. Prospecting focuses on acquiring consumers who have been identified as being 'in-market' for the brand’s service or product that haven't been to the brand's website previously. The aim is to encourage them to move from awareness to consideration and hopefully lead to a visit to the website.
Retargeting then follows by serving ads to these people who have already visited the site to drive them to a conversion. The ideal result then leads to more targeted ads, higher engagement rates and tailored prompts from other sites incase any distractions caused the user to navigate away before purchase, resulting in significantly more conversions and more knowledge of the audience.
Overcoming teething problems
As with anything still in its infancy there are a few drawbacks. Firstly, the high cost of entry is a barrier to smaller clients whose average spends fall short of the minimum requirements by the programatic suppliers. Secondly, using a programatic platform has typically restricted the use of powerful creatives due to the reliance on large scale, standardised formats. However, this is rapidly being addressed and many more formats including video and interactive banners can now be served as successfully as before.
This new era of data-led advertising may have a few teething problems but it has caught the eye of many of the big brands. Nestle and Tesco reported last year that, remarkably, they had sold out of products and were unable to fulfil online orders after running data-led campaigns.
BRND WGN has already begun trialling this new platform and, even though its still early days, we expect big things. Stay tuned or better still come and speak to us about your next campaign.
