Published: 25 May 2017
To understand the appeal of Programmatic Advertising, there are some simple facts we need to accept:
As Marketers, we like to think we know our customers. We say we understand their concerns, their desires, and what makes them decide to buy. The simple fact is: we can’t.
We’re limited to pigeon-holing our customers into broad groups and making educated guesses.
As Marketers, we can upload, test, adjust and optimise to appeal to the most current buying behaviours, keeping up with the most current trends as soon as they emerge. The simple fact is: we won’t.
The world simply moves too fast.
As Marketers, we would love it if our customers thought about us all the time, but the simple fact is: they don’t.
No explanation necessary (I hope).
What is Programmatic Advertising?
View Josh Whiten’s video guide for a rundown of Programmatic in full
‘Programmatic Advertising’ is buying digital advertising space automatically, with machine-learning using data to decide which ad space to select, how much to pay for it, and when to show ads.
Data is the keyword here. Programmatic thrives on it. Every choice it makes is informed, tested, repeated and (finally) vindicated with big data… Data that is more granular than what most Marketers have access to, and utilised around the clock.
Traditionally, digital advertising is mired in a need to be managed. Constant testing is required, and changes come slowly. The need to test, optimise and repeat is a slow process, as many Marketers know. What Programmatic advertising does is take that need for manual optimisation and testing away, essentially freeing a digital advertising manager to focus their time (and money) on other aspects of the wider strategy.
All it needs is:
- Your Average Order Value
- Your desired CPA
- Your ad Creatives
- A set of landing pages with which to test
- A tracking pixel embedded on your website
At the most basic level, Programmatic decides where and when to buy ad space by observing historical “signals” given by your customer behaviours over time, then appealing to those established signals with your material, until it can refine itself to a point where your ad space is only bought when it is most profitable. If it isn’t profitable, it tries something else, and keeps trying until it is.
Traditionally, broad Display targeting would give you a million impressions on major news sites, and you’d refine from there over time. Instead, Programmatic takes that million impressions and hits the ground running with targeting based off those established “signals”, optimising all the time.
This means that after a short initial testing period, CPA is dramatically lower than where it began.
Having utilised Programmatic with some of our clients, we’ve seen CPA drop 66% within 6 weeks of testing. Depending on how high your Average Order Value is, this can make for an outstanding ROI, especially when compared with the average ROI of Google Display Network campaigns, which are traditionally more focused on Brand Awareness rather than conversions.
Concerns & Changing our Thinking for Programmatic
The biggest concern advertisers have with Programmatic is that it requires “letting go” – giving up control of your precious budget to “the machines”.
One of the common queries an advertiser might have with Programmatic is where their ads will end up showing. The answer is simply: “Where it will produce the best CPA”, although you are still able to state Exclusions for brand safety.
That “where” might not be where we expect, but if it converts well, then Programmatic will keep bidding on it. Often with Programmatic we’ve seen the best CPA come from ad space that has nothing to do with our niche, but we understand that our customers don’t necessarily have to be thinking of us to be in the mood to buy from us...
You Are Still in Control. Work Still Needs to be Done
Programmatic excels when it has plenty to test, so make sure to “feed” it with a wealth of ad messaging, creative variation (in ads and landing pages), and more ambitious methods of optimising your User Experience. With the knowledge that a wider set of website visitors are more likely to convert, Programmatic presents an opportunity for Digital Marketers to fully grasp Conversion Rate Optimisation.
Thanks for reading! Click through to Part Two to continue learning about how Big Data makes Programmatic possible, and how it presents a new standard in performance measurement.
Here at Sagittarius we specialise in digital marketing campaigns, working with channels such as programmatic to help brands achieve real marketing ROI. If you would like to talk to us about how we can help your brand get in touch via email at firstname.lastname@example.org or pick up the phone and call 01233 467800, we would love to hear from you!