We live in a remarkable time for digital marketing. Brands can generate interest in their products, win new customers and earn outright brand fame by engaging and moving audiences when it matters most. Every brand aspires to be truly responsive to their audience in real-time, with relevant messaging in a creative way. Brands can now achieve this dream through programmatic, which helps them make the most of the plethora of options available in connecting with their audience.
Programmatic allows brands to use audience insights and technology to tailor messages to the right person, at the right moment, in the right context. It helps brands respond to real-time signals, across screens and across channels. Its taking us from a pre-historic medium of advertising to intelligent use of technology suited to the time we live in (but still requires human intelligence to make it happen e.g. understanding your consumer!). Granted it’s not as simple as pressing play and letting brand advocacy increase – you need to intelligently use of all your data sources such as CRM, social channels, survey data etc… before even being able to harness the power of social interaction.
So what is Programmatic?
It’s a new automated way of buying and selling online ad space. It’s different from traditional media buying because it’s done by machines – eliminating paperwork and freeing up time for marketing/creative to focus on big picture planning. It works by using data and computing power to figure out where to run your advert, which then automatically buys that space for you. A media agency or in-house media team will set programmatic up for you.
Since the ‘automation’ part is pretty interesting, let’s take a quick look at how it all works in four easy steps.
Automation in four easy steps…
Advert buying to the right audience – Quicker than you can blink!
The automation process happens incredibly fast; usually in less time than it takes you to blink, with this small moment of time giving you some huge benefits. For example, it makes the buying process a lot more efficient for brands and their agencies, which can save time and money. You can also do incredibly narrow targeting and reach the right potential customer at the right time, wherever they are online. That means you won’t waste impressions on a large broad buy audience and it can even help you do more innovative marketing.
What does this programmatic ecosystem look like?
So whats with this programmatic ecosystem and where do you fit in? If you get confused with the below ecosystem, don’t worry; you’re not alone. Some of the people heavily involved in it don’t quite get it or can define it. I think the below graphic really helps to understand the whole process that once in motion takes milliseconds. I have listed the benefits and challenges along with a series of definitions for all the key components within the programmatic marketing ecosystem.
This new advertising ecosystem above has lots of benefits, but as always there are still challenges, some of which are listed below.
Data Management Platform (DMP)
This is a platform that enables marketers to move data (e.g. audience targeting segments) from different sources into a single location to analyse audience and channel performance and develop new audience segments.
Third-Party Data Providers
An entity that collects data but does not have a direct relationship with consumers. They pay publishers to let them collect information about visitors, and use it to piece together detailed profiles about users tastes and behaviours as they move around the web.
This information is sold to advertisers to help them target their ad buys and is often “plugged in” to a DSP to help it decide which ad impressions it should buy from exchanges.
Tech-based agencies who have found a niche in offering retargeting at scale with dynamic creative, strong performance (based on real-time optimisation) and service.
Retargeting is one tactic in programmatic buying that uses 1st party data to deliver a more personalised and targeted ad to users.
Agency Trading Desk
Agency holding groups (Publicis, Omnicom, WPP, etc) and independent agencies have trading desks which buy media programmatically.
They leverage a Demand-Side-Platform (DSP) to buy and focus on the “heavy lifting” data management, service and operations to help clients navigate the complexity of display space.
Demand Side Platform (DSP)
A technology platform that allows agencies, advertisers, networks and trading desks to buy media across multiple inventory sources (i.e. exchanges) in real time.
They have features such as first and third-party audience targeting automated optimisation and performance and planning reports.
A marketplace where publishers make their inventory available to advertisers on real-time basis. These are the large pools of inventory that buyers connect with to secure the inventory that they buy.
Inventory can be sold on a real-time basis, where the price reflects the demand exchanges are often compared to open marketplace, providing the transparency to buyers that they did not get from the ad networks.
Supply Side Platform (SSP)
A tool for publishers to help maximise their yield across directly sold campaigns, ad networks and ad exchanges. It is a piece of software sed to dell advertising in an automated fashion.
This is basically the publisher equivalent of a DSP. SSPs are are designed to help publishers maximise the prices their impressions sell at.
Aggregate publishers unsold inventory and sell in packages to advertisers and agencies. Online ad networks will often manage campaigns on behalf of advertisers promising a certain CPA or ROI.