Have you bought in to programmatic?

30 Aug, 2014

Adoption of programmatic advertising is on the rise. Victoria Clarke looks at benefits, challenges and limitations, and how it fits within the wider marketing landscape

Digital advertising is arguably one of the fastest moving components of the marketing landscape, fuelled by new tools and techniques that aim to better connect brands with customers. From the primitive web banner ads and simple ad exchanges that emerged during the mid 90s, to the sophisticated online advertising models of 2014, digital advertising continues to gain momentum and, significantly, proponents among B2B brands. In particular, programmatic advertising is increasingly causing a buzz because of the potential it offers for even greater efficiency, performance and ROI. According to a recent report by the IAB, programmatic advertising is predicted to account for nearly half (47 per cent) of the digital display ads in 2014.

But what exactly is it and how can B2B marketers make use of it in today’s content-driven marketing landscape?

Unpicking programmatic
Programmatic advertising combines the use of technology, customer intelligence and sophisticated algorithms in order to automate targeted and relevant experiences to customers in real-time. Rebecca Muir, head of product marketing at Quantcast, elaborates: “Programmatic advertising is the automisation of buying and selling online advertising space. Brands can buy advertising inventory according to their different audiences’ requirements and budgets, and publishers can price according to real-time demand for their space.”

Muir also asserts that programmatic advertising can be used to reach customers before they begin researching; a battle that all brands are facing. It also offers marketers the opportunity to keep control of costs through discreet budgeting and the ability to make changes in real-time.

Efficiency, as well as cost, is another top benefit of programmatic, as Dave Reed, MD EMEA at MediaMath, highlights: “Programmatic in its purest sense connects advertisers to the world’s media supply through one centralised system and can drive real business results for advertisers.” He adds: “The right programmatic technology should be transparent, data-driven, scalable and holistic.”

With programmatic leveraging the power of real-time bidding (RTB), it’s easy to see why there is some misconception that one equals the other. However, those marketers who have successfully got to grips with programmatic will explain it goes far beyond computational bidding, and crucially, still necessitates human interaction. Andrew Blackwood, director at Crimtan B2B, advises: “Although tech is driving [programmatic’s] success, marketers need to remain involved to understand why a campaign has worked and use this information to act upon in
the future.

“Ultimately, one of the best strategies when using programmatic is to ensure you don’t leave everything to machines and there is still a human involved to oversee the process, continuing to play an active role in the decision-making process. This is vitally important, not only to prevent against inventory that is not brand safe, but also to ensure your campaigns take into account external influences that may have an impact.”

Brand safety
Brand safety, in terms of transparency of ad placement, is one of the most commonly cited concerns of programmatic advertising. This is largely founded on the fact that the early days of programmatic involved multiple ad networks trading inventory in different ways, and mostly remnant inventory was available on either inappropriate websites or with poor site visibility. This left advertisers in the dark as to exactly how and where their messages were being shown. Will Bradley, planner at Maxus for Business, reveals many B2B clients still voice this misgiving. He says: “The major concern with investing in programmatic buying begins and ends with brand safety. While comfortable with campaigns where [brands] know each and every placement and website their ads will feature on, the thought of their ads appearing across a huge array of unfamiliar yet relevant websites is troublesome enough to outweigh any of the cost and reach efficiencies of a programmatic buy.”

Despite this, brand safety should not be seen as a barrier to programmatic, but rather a speed bump. The good news is that today’s digital advertising marketplace offers far greater transparency and control. Private marketplace exchange deals, as well as the right programmatic partner, can help businesses to know exactly where their ads will run. In addition, Blackwood highlights a number of strategies brands can implement in order to help mitigate against the risks of poor inventory quality. He says: “These include being able to buy brand safe inventories in ad exchanges, using pre-bid technology and making use of blacklists and whitelists to ensure all of a brand’s partners understand what inventory they consider acceptable.”

While efforts are being made to make ad inventory more transparent, an important factor to consider with programmatic is how it fits (or not) with current data privacy legislation. Todd Ruback, chief privacy officer at Ghostery, explains: “Programmatic trading was not contemplated when the ePrivacy Directive was conceived. As programmatic trading has become the chief industry platform, it is becoming ever more difficult for companies to know where and when their ads appear, thus making it a significant challenge to the companies that serve the ads to ensure they are in full compliance with the notice and choice requirements of the cookie law.”

Glen Calvert, CEO of Affectv, also warns of the challenges the proposed new EU data privacy regulation could present. He says: “Current legislation dictates that technology companies cannot connect the Personally Identifiable Information (PII) of a user with a cookie ID for wider targeting practices. Any further legislation that stops targeting companies using identifiers (cookies or device IDs) will hinder the efficiency of programmatic advertising, as its efficiency comes from its ability to be targeted and reduce advertising waste.”

Blending approaches
Despite cautionary words regarding data privacy legislation, the current marketing landscape appears to be playing to the strengths of programmatic advertising. While content sits happy on its throne, native advertising is another rising trend among brands looking to build more meaningful relationships with customers. But while the science and maths of programmatic may seem at odds in a creative, content-driven ad environment, the two combined can prove most lucrative. Alex Still, head of digital, EMEA at Mindshare, elaborates: “What appear to

be opposing forces can end up being a complementary pair focusing on the same objectives.

“Where in programmatic we use data to identify and target people for which the content we serve is relevant, in native we look more on how to integrate content in the right context and environment to deliver a more natural, seamless user experience.” Still believes that in the near future programmatic and native advertising will blend together in order to deliver the right experience to the right audience. Programmatic advertising in B2B has some way to go but all experts agree the climate is ripe for a test-and-learn approach. Programmatic will not be for every brand, but with workflow efficiency at its heart – it’s easy to see why many businesses are willing to dip their toe in.

This article appeared in B2B Marketing.