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The Case for Programmatic

dmnews.com | Programmatic 2

THE CASE FOR PROGRAMMATIC

A ccording to the Interactive Advertising Bureau, 85% of advertisers currently use programmatic ad-buying strategies, a figure that is projected to climb to 91% within the

next couple of years. IDC also reports that its use is expanding and projects programmatic ad spending to grow by 77% this year.

It’s no secret why marketers are drawn to the data-driven marketing approach: Programmatic purports to offer a smarter, more efficient method to buy media — across search, display, and social networks — than old methods could. And because it is automated, it takes a lot of the headache out of ad buying.

Programmatic also puts together audience segmen-tation, optimization, headline bidding, dynamic ad - ver tising, and omnichannel ad management. And it is scalable to a predetermined budget, so it delivers an affordable opportunity to use granular data to target key audiences in real time.

Digital display in particular has been a favorite programmatic buy. eMarketer reports that in 2016 more than two-thirds of all digital display ads will be purchased programmatically.

But, as Perry Simpson notes in “Breaking Down the Most Essential Bits of Programmatic Advertising” (see page 3), despite its virtues, “programmatic advertising can still strike many as an intimidating tangle of techno babble and jargon.”

Don’t we know it! In this eBook, we break through the “techno babble and jargon” to provide jargon- free explanations of what programmatic is, why it works, and how you can make best use of its attri-butes. We also offer a real-life example of one brand’s experience in the programmatic space and hear from Russ Glass of LinkedIn.

Whether you’re already well entrenched in a programmatic approach or just making headway, this eBook has much to offer.

3 4 7 9 10

Programmatic offers a smart and efficient way to approach ad buying across all media

TABLE OF CONTENTSBreaking Down the Most Essential Bits of Programmatic Advertising

How Programmatic Strategies Bring Campaign Success

Lexus Scores Engagement and Brand Favorability

Header Bidding Could Prove Transformational for Marketing

LinkedIn Launches Programmatic for Display Ads

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THE CASE FOR PROGRAMMATIC

Programmatic advertising was a big deal before most people had even heard of it. Who wouldn’t appreciate the auto­mation and quality­of­life

im provements that come with pro­grammatic buying, specifically real­ time bidding and programmatic di­rect? While 85% of advertisers use programmatic ad­buying strategies, and 91% expect to do so soon, ac­cording to the Interactive Advertising Bureau, programmatic advertising still strikes many as an intimidating tangle of techno babble and jargon.

Like traditional advertising, program­matic ad buying is difficult to speak to in an overarching general sense. But there are various aspects of the prac­tice that are immediately noteworthy

for marketers. Let’s break down its aspects and attributes.

The prosProgrammatic advertising can be best understood by breaking it down to its most popular incarnation: real­time bidding (RTB). According to the great fact repository Wikipedia, “[RTB] is a means by which advertising inventory is bought and sold on a per­impression basis, via programmatic instantaneous auction, similar to financial markets.” In recent years, programmatic buying has shifted toward direct, more guar­anteed ad­buying practices that forgo the auctionesque RTB framework.

For marketers, this equals unprec­edented control and accuracy over who’s going to see their ads and how

much they will pay for that impression. And with that increased control comes more and higher­quality data. But be­yond that, programmatic advertising brings much­needed automation to the pro cess of buying ads.

The consDespite its many benefits, program­matic ad buying has brought many marketers into close contact with the seedier sides of the web. Many market­ers have fallen victim to online traffic fraud driven by bots or, perhaps even worse, had their ads placed on woeful­ly inappropriate pages.

Additionally, marketers are often at the mercy of programmatic ad net­works. Premium inventory is scarce, and those with less, or more suspect in­ventory, will greatly diminish the bene­fits of sinking resources into program­matic. It’s still relatively easy to make a bad purchase given both the rampancy of fraud in RTB and the general infan­cy of programmatic direct.

Still, marketers and publishers have taken up programmatic buying mod­els en masse. With adoption at such high levels, it’s hard to truly justify avoiding programmatic advertising, especially as we move deeper into a device­agnostic world. The inherent digital nature of programmatic adver­tising allows for a level of agility that traditional advertising simply cannot match. There are challenges, yes. The whole system is complicated, but no more so than anything else in ad tech.

In a nutshell, the most important thing marketers need to know about programmatic advertising is quite sim­ply that they need to be doing it. If not today, yesterday. n

Breaking Down the Most Essential Bits of Programmatic AdvertisingJustification for avoiding programmatic is at an all time low. Here’s what marketers need to know now about the practice. By Perry Simpson

U.S. Mobile Programmatic Display Ad Spending 2014–2017billions, % change and % of total mobile display ad spending

$21.22

$15.45

118.2%

■ Mobile programmatic display ad spending ■ % change ■ % of total mobile display and spending

$9.68

46.0%

69.0%78.0%

37.3%59.6%60.0%

$4.44

234.3%

2014

Note: Mobile display ads transacted via an API, including everything from publisher-erected APIs to more standardized RTB technology; includes native ads and ads on social networks like Facebook and Twitter; includes ad spending on tabletsSource: eMarketer, April 2016

2015 2016 2017

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THE CASE FOR PROGRAMMATIC

I f there has been one popular protocol among marketers, it’s the programmatic, automated responses that create personal­ized connections with customers

as they interact with marketing media. Programmatic is usually related to sales­channel activity and is meant to spur a satisfying customer experience.

Programmatic is typically incorpo­rated into a larger campaign: agile marketing. Agile marketing is meant to establish a fast and tailored response to customer activity and influences on that activity. Agile marketing consists of generating media in a 70:20:10 ratio based on varying demand of viewers:

■ 70% planned media for standard branding. This consists of standard marketing campaigns such as paid search, display ads, and search or con­tent marketing.

■ 20% programmatic. Media messag­ing based on a potential customer’s re­sponses generated by planned media.

■ 10% specialty media issued as a fast response to news events that might attract a potential customer’s interest. Chevrolet’s salute to Prince — showing a red Corvette as a refer­ence to the singer’s popular song on the occasion of his death — is an ex­ample of such specialty media.

Programmatic protocols Programmatic protocols can be used for automating campaign response to high­volume activity in reacting to planned media (planned media can also be bought and sold on a program­matic basis). It can be used for display

and video advertising, automating the buying and ad­placement process.

AdWords and Bing Ads can be in­cluded in programmatic planning, as they have incorporated video ads and can be integrated with views through a mobile device. Pay per click adds prospective customers to the conversion funnel through ads that create initial awareness and a unique opportunity to convert prospects into customers at a later point in the sales cycle. In other words, using programmatic can increase your total AdWords and Bing Ads traffic and conversions faster than conventional account optimizations can.

To implement a programmatic proto­col in this way, marketers work with ad­vertisers to insert pixels from program­matic vendors on their website or landing pages. Pixels collect user behavior and search intent data to develop audience lists that indicate how ads should best be placed to be relevant.

Unique benefits Programmatic advertising offers unique benefits, two of which are:

■ Better use of a marketer’s time to focus on strategic considerations instead of campaign metrics. For ex­ample, that 10 specialty media in an agile marketing strategy require atten­tion to respond to an event. That at­tention can better be paid by a human marketer who understands context than by an automated protocol.

■ A more informed view of customers through the collected data. That view can refine the message sent, allowing brands to avoid offering the same cre­ative to every user across every channel.

How Programmatic Strategies Bring Campaign SuccessMaking programmatic part of agile marketing builds increased responses to and influence on customer activity. By Pierre DeBois

A programmatic strategy should offer ad creativity, budget parameters, and technological benefits for personalized customer experiences

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THE CASE FOR PROGRAMMATIC

Tips for success So what should marketers look for in planning a successful programmatic response marketing strategy? Here are a few tips:

1. Map the audience behavior to channel — where possible.

2. Examine any data collected — to see if the programmatic triggers from your audience are primarily behavioral or based on location. The answer will make a difference in how your programmatic campaign is de­veloped. A behavioral campaign, for example — like retargeting ads aimed at customers who drop out of check­out before completion — would require programmatic ads that re­mind the customer of the value they missed. A location­based market­ing campaign, such as having users check in at a favorite retail location, might serve ads for restaurants that are nearby.

3. Evaluate customization of auto-mated features for ads. The latest features are developed with automat­ing tasks and bids in mind. AdWords Scripting can automate repetitive tasks, such as validating segments in a URL that can trigger media. And there are new features being intro­duced such as smart bidding, which adjusts campaign bids by device. Thus marketers should evaluate how steps are automated as a response to both ad costs and as responses to all the media in play.

4. Focus on segment metrics for real- time analytic reports. Most analytic platforms have real­time data that can report traffic with respect to location, traffic sources, and content. Market­ers can then use this information to monitor when new or changed con­tent from a programmatic campaign is accessed. It is also helpful to assess how frequently the segments occur. Google Analytics, for example, can measure hits during the most­recent minute or 30 minutes.

5. Audit traffic purchase sources for bots and ad fraud. Marketers should seek advertising partners who can help vet bots and mysterious traffic that leads to ad fraud. Not all traffic buying will be

perfect, but advertisers should be aware when unfamiliar networks add tags.

6. Anchor a trial budget by testing creative against long-term objectives. The triggers for sending programmat­ic media consequently open an oppor­tunity to test countless segments of an ad. Each time a programmatic proto col is triggered, a set of media can be sent to test phrases or images that lead to conversion. The tests can be conduct­ed incredibly quickly and accurately.

Overall, a solid programmatic strat­egy should offer the best combination of ad creativity, budget parameters, and technological benefits in creating personalized customer experiences. n

Most analytic platforms have real-time data that marketers can use to monitor when customers access new or changed content from a programmatic campaign

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THE CASE FOR PROGRAMMATIC

L ike many group sports, programmatic advertising needs to be thought of as a team effort. Brad Piggott, VP and industry lead for

Yahoo’s automotive vertical, says mar­keters need to be able to double­team content and technology in order to produce immersive experiences that are part of an overall strategy rather than a stand­alone entity.

Piggott and his team helped Lexus do just that when the two companies launched a custom­branded game for the luxury automaker’s 2016 Lexus GS F sedan during March Madness.

Jumping at the opportunityLexus’ media manager, MaryJane Kroll, wanted to find a way to promote the power and agility of the GS F while tapping into the excitement surround­ing the 2016 NCAA Men’s Basketball Tournament. So the company served as a presenting sponsor of Yahoo Sports’ Tourney Pick’em bracket and developed a custom game of its own: GS F the Bracket.

Unlike a traditional bracket, where participants strive to pick the winning team, GS F the Bracket asked fans to pick which games would reach a com­bined 60­point total the fastest — a nod to the GS F’s ability to accelerate from 0 to 60 mph in 4.5 seconds.

“Given that the GS F is the most powerful Lexus sedan yet, the vehicle appeals to luxury consumers who want the next level of performance on the road,” Kroll says. “They’re competi­tive and confident, and a fast­ moving

game like GS F the Bracket tapped into their desire to win.”

To participate in GS F the Bracket, fans had to visit the campaign’s website and create an account by registering their email address, entry name, and a password. Participants could also opt to receive email notifications when new picks were available. Once they were registered, players would predict which match­ups in a particular round would score a combined 60 points the fastest.

When players made two or more ac­curate predictions, they were consid­ered to be on a “winning streak” and would receive one point. Participants could win up to six points for a perfect set of predictions. But if a player made an inaccurate prediction or didn’t make

a prediction at all, the winning streak would end and the streak count would reset to zero.

Follow the bouncing ballDuring the final stage of the tourna­ment, participants had to make two ad­ditional “tie breaker” predictions: How much time will elapse on the official game clock before the combined 60 points is reached and before an individ­ual team scores 60 points? The partici­pant with the highest point total has the chance to go on a luxury vacation.

In addition to hosting the game, the website featured scoreboards, leader­boards, and expert­opinion videos.

To encourage participation, the companies prompted any fan who

Lexus Scores Engagement and Brand FavorabilityThe luxury automotive brand experiences big wins by relying on content, data, and technology. By Elyse Dupré

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THE CASE FOR PROGRAMMATIC

completed a Yahoo Sports bracket to sign up for the Lexus bracket, Kroll says. Lexus also promoted the cam­paign via paid placements on Yahoo (for instance, native, display, and video ads), its social media channels, and an integration with Yahoo Sports’ show Tourney Bracket Live.

“We wanted to reach people where they may have been reading about basketball or we wanted to reach them where they may have been reading about the new hottest cars,” Yahoo’s Piggott points out. “So we created an immersive ad experience to both inform [consumers] about the Lex­us vehicle but then also drive to [the Lexus] promotion.”

Piggott also says that Lexus lever­aged Yahoo’s DSP and combination of first­ and third­party data to target con­sumers with these ads. For instance, he says that the companies could target consumers based on behavioral data, demographic information, and intent — such as whether people had been searching for “bracket challenges.”

Heating upThe campaign ran from March 13 to April 4, 2016. During that time, Lex­us generated 165 million total impres­sions, 23 million total views, and 1.3 million page views for GS F the Brack­et. The company also experienced a 15% lift in brand favorability and a 29% lift in purchase consideration — both measured through a Millward Brown study. The latter two figures were high­er among men (22% and 37%, respec­tively) than among women.

Despite this success, Kroll now says she would have done a few things dif­ferently if she had a chance to rescript the campaign. For instance, she would have created more points of entry.

“The results of the custom cam­paign were powerful among all view­ers,” she acknowledges. “If we were to do this again, we would have more points of entry to drive users back to the game and increase our integration into partner­owned content.”

So although the campaign wasn’t a complete slam dunk, it’s nice for Kroll to know that Lexus’ partners were there for the assist.

“This was the first time Lexus cre­ated a game around a major sporting event,” she says. “Working closely with our partners was key to conducting extensive testing, making real­time changes, and making sure we creat­ed a game that entertained fans, kept them coming back for more, and still delivered our vehicle messaging in an authentic way.” n

Lexus also promoted the campaign via paid placements on Yahoo (for instance, native, display, and video ads), its social media channels, and an integration with Yahoo Sports’ show Tourney Bracket Live.

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THE CASE FOR PROGRAMMATIC

A n Interactive Advertising Bureau’s Programmatic Marketplace conference was titled Header Bidding: Fad or Future? Panelist

Sam Cox opened by answering that question: “The technology could be a fad, but what the tech does could en­able the future, because the future is to put programmatic first,” said Cox, who at the time was VP of global part­nerships at MediaMath. (He is now Google’s group product manager for AdX Buy Side and Policy.)

Fellow panelist Tom Shields, a pro­grammatic pioneer who launched one of the world’s first ad servers, was equally adamant that marketers pay full attention to the development. “Header bidding is transformational,” Shields reported. “If you’re not paying attention, you may be missing out on something important.”

Header bidding is an antidote for programmatic advertisers who com­plain that the automated bidding pro­cess provides nothing but remnant in­ventory. The technique has publishers offering premium inventory to multi­ple ad exchanges before releasing it to their ad servers. In this way publish­ers can test the true market value of inventory they usually sell direct and, perhaps, realize higher yields.

But the technique is new and still holds questions for publishers and advertisers alike. Reuters’ global head of ad operations, Pilar Prassas, who moderated the IAB session, said her company had just recently begun a header bidding test. Because using the system means another tag must be added to a web page already weighed down by third­party ad tags, Reuters

was concerned that it could slow down ad load times.

But Shields thinks the double pos­itive of higher yields for publishers and better ad performance for mar­keters can only make header bidding thrive. He said half of ad servers and SSPs have adopted the practice in the past few years.

Cox said header bidding should in­spire technology­driven advertisers and agencies to go old school and call publishers to get a crack at premium inventory. “Whether it’s buy or sell technology, the idea is to get the most out of the advertising. If a publisher is doing header bidding, call and ask how they’re selling it up,” Cox said.

That way, advertisers can get guar­antees on premium inventory, pub­lishers can realize higher yields, and publishers’ sales teams still have a chance to earn full commission. n

Header Bidding Could Prove Transformational for MarketingThis programmatic route to premium inventory is here to stay, says a panel at an IAB conference

— Sam Cox, Google

The technology could be a fad, but what the tech does could enable the future, because the future is to put programmatic first

Header bidding is an antidote for programmatic advertisers and has publishers offering premium inventory to multiple ad exchanges

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THE CASE FOR PROGRAMMATIC

L inkedIn extended its offer­ings to digital advertisers by allowing them to purchase display ads that will reach desktop users. Program­

matic buying will allow ad buyers to use their own data or LinkedIn’s data.

“This really augments the capabili­ties we have,” said Russ Glass, head of products at LinkedIn Marketing Solu­tions. “We now allow marketers access­ing digital ad programs the platform of their choice.” LinkedIn already has ad programs that let advertisers reach its professional database with sponsored content or ads delivered via InMail.

“The only way to access the ad on the site was by targeting the targeting data we had available,” Glass said.

Advertisers now have two audience­ targeting options. The first is intent­ based, where advertisers can use their own or third­party data to target pros­pects. The second is Professional Iden­tity Targeting, where advertisers can use LinkedIn’s data to reach segments by size, seniority, or career type.

Digital advertisers are highly data driven. Letting them use their own data to pitch to LinkedIn’s list lets them make best use of their data strategies when crafting campaigns for B2C or B2B or when pitching premium goods. “Advertisers know the customer better than anybody,” Glass noted.

Programmatic buying is targeted at display ads only and will only appear on LinkedIn’s desktop version. “This is not a great format in mobile,” Glass noted. “It’s intrusive from the user experience point of view.”

Advertisers can also resort to open auction or private auction to purchase targeted digital ad space. “Open auc­tion is the easiest way to set up and run,” Glass said. “You can bring any data to the table.” Advertisers would go through their demand­side plat­forms to get their ads served through the LinkedIn pipeline.

Digital advertisers could use pri­vate auction for more options to reach LinkedIn’s home base, Glass said. This technique is more complex to set up,

and the ads run only on LinkedIn. If the advertiser chooses to be a little less picky about where the ad runs, the advertiser is likelier to resort to open auction, Glass said.

LinkedIn’s programmatic buying solution does not conflict with any ef­fort that Microsoft may be working on, given Microsoft’s recent announce­ment that it is buying LinkedIn.

Programmatic buying follows Linked ­ In’s Account Targeting, a program that lets marketers automate outreach to Linked In decision­makers. Informa­tion could only be served to fewer than 100 companies at a clip earlier on. n

LinkedIn Launches Programmatic for Display AdsA snapshot of LinkedIn’s recent foray into programmatic buying. By William Terdoslavich

— Russ Glass, LinkedIn Marketing Solutions

We now allow marketers accessing digital ad programs the platform of their choice