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An Introduction to Programmatic

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Understanding the value of programmatic and how it can impact your brand.
Presented at the National Ski Area Association Convention and Tradeshow in San Francisco May 2015.

Published in: Marketing
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An Introduction to Programmatic

  1. 1. ©BravoEchoInc,2015 BravoEcho works with the leaders of organizations to evolve their business through brand, strategy and communications. We create and build brands. Our job is to know our Client’s audience. We are champions of the customer and the strategic voice behind the brands we serve. WHO WE ARE
  2. 2. ©BravoEchoInc,2015 TARGETING WITH TECHNOLOGY WHAT IS PROGRAMMATIC THE LINGO PROS & CONS AN AD 
 IMPRESSION THE ROLE OF STORYTELLING The Digital Advertising Landscape 1. Programmatic Advertising 2. Future Considerations 3.
  3. 3. The 
 Digital Advertising Landscape
  4. 4. “Half my advertising is wasted, I just don't know which half." -John Wanamaker ©BravoEchoInc,2015 HOW FAR WE’VE COME
  5. 5. ©BravoEchoInc,2015 IN THE PAST
  6. 6. ©BravoEchoInc,2015 TODAY
  7. 7. WHAT IS PROGRAMMATIC
  8. 8. Programmatic buying is the gluten of advertising. Like gluten, ‘programmatic’ has become a buzzword that many people use but few really understand. They just know it’s important.” -Jimmy Kimmel ©BravoEchoInc,2015 PROGRAMMATIC, 
 THE NEW BUZZWORD “
  9. 9. In this data-driven world we are surrounded by new technologies that enhance customer experiences, create efficiencies and reduce waste for businesses. Programmatic is one tool that has come out of this technology race. It’s an audience-buying tool. It’s a way in which the right message can be delivered to the right person at the right time. ©BravoEchoInc,2015 PROGRAMMATIC IS A TOOL
  10. 10. By definition, programmatic is an automated process in which ads are bought — through auction based systems in the marketplace or through publishers — and served across the web to a specific audience. It’s simply focused on two components: 1) Buying targeted audiences 
 2) Making the process more efficient ©BravoEchoInc,2015 PROGRAMMATIC IS A TOOL
  11. 11. Programmatic is part of this complicated digital ecosystem. And that’s the world advertisers must start to understand better in order to target and spend more efficiently. Ultimately, realizing the same end goal — building brand and creating a stronger and more relevant relationship with the customer. ©BravoEchoInc,2015 BUILDING BRAND
  12. 12. Programmatic can also help to deliver stronger ROI, more “bang for your buck” when used and applied in the right way. Two key components to this equation: Lower cost impressions + Improved audience targeting = Stronger results ©BravoEchoInc,2015 STRONGER ROI
  13. 13. Digital buying used to be centered on the advertiser buying inventory from premium publishers. But over time, advertisers realized buying premium didn’t matter if the user wasn’t relevant. There was a ton of waste. Programmatic allows advertisers to move from mass buys to a system that more precisely targets relevant audiences with stronger results and proven ROI. Targeting the right user at the right time with the right message is the end goal AND is a strategic tactic that has now become price of entry. ©BravoEchoInc,2015 END GOAL
  14. 14. ©BravoEchoInc,2015
  15. 15. Language A CLOSER LOOK AT PROGRAMMATIC
  16. 16. ©BravoEchoInc,2015 In the world of programmatic advertising, media is typically purchased through a DSP on a CPM basis facilitated by SSPs on individual websites which are connected to Ad Exchanges or Private Exchanges. Unlike 
 Ad Networks, programmatic buys are transacted on a unit-by-unit basis offering full transparency into individual placements. More than just retargeting, 1st party data is one of the key leverage points in programmatic. Through the use of this data, tracking pixels and use of cookies create a feedback loop which combined with CPM gives us the ability to value all aspects of the campaign, audience, and inventory at an effective CPA.  Using these findings in combination with 2nd and 3rd party data we create look-alike models which extend the size of the audience. Once considered remnant inventory, RTB buys are where we explore for high performing site inventory. When that inventory has been identified, we secure programmatic preferred deals and programmatic guaranteed deals to scale the campaigns. Every dimension of a programmatic media buy can be assigned an appropriate price or bid so that the campaign is optimized on all levels for maximum ROI.
  17. 17. A software used by advertisers and agencies to purchase advertising in an automated manner. DSPs allow advertisers to target specific users and buy impressions across a range of publisher sites. These publishers make ad impressions available through the marketplace and the DSP software decides which impressions make sense to buy. The advantage of using DSPs instead of ad networks is the ability to buy, serve and track ads using one central tool, and to optimize campaigns more easily as a result. And, it’s cheaper. ©BravoEchoInc,2015 DEMAND SIDE PLATFORM (DSP)
  18. 18. A software used by publishers that connects their inventory with ad exchanges, networks, and DSPs to sell impressions at their highest value in real time. Publishers can set a minimum price they will sell impressions for.  ©BravoEchoInc,2015 SUPPLY SIDE PLATFORM (SSP)
  19. 19. A model that charges advertisers every time an ad is displayed to a user, whether the user clicks on the ad or not. If a publisher charges $3 CPM, the advertiser must pay $3 for every 1,000 impressions of its ad. ©BravoEchoInc,2015 COST PER THOUSAND (CPM)
  20. 20. A performance-based advertising measure that looks at how much it costs in advertising to convert a prospect to a customer for a company. ©BravoEchoInc,2015 COST PER ACQUISITION (CPA)
  21. 21. Ad networks bring together inventory and audiences to help marketers buy online ad impressions faster and more efficiently. There are many different types of ad networks. Some focus on reach and price and don't provide much insight on who or where. Other, more premium networks — including publisher-specific networks — are all about guaranteeing audience demographics and quality. The business model for ad networks is to aggregate inventory from a range of publishers, mark it up and sell it on for a profit. ©BravoEchoInc,2015 AD NETWORKS
  22. 22. A technology platform that facilitates the buying and selling of advertising inventory between an advertiser and thousands of publishers, often through real-time auctions. Ad exchanges allow advertisers to buy ads, using DSPs, across a range of sites at once versus site-direct through publishers. Ad networks and other entities also buy ads from exchanges. Exchanges are supposedly more transparent than networks because they enable buyers to see exactly what price impressions are being sold for. Popular ones are Google Ad Exchange and Facebook Exchange. ©BravoEchoInc,2015 AD EXCHANGES
  23. 23. Publishers are starting to use private exchanges to control who can buy their inventory and at what price. It allows them to be selective and not have to deal with the open market and/or networks that could sell those ad impressions through a markup. ©BravoEchoInc,2015 PRIVATE EXCHANGES
  24. 24. You are referred to as the 1st party. This is data you own. It’s free. Information you have collected over time on your customer (via web cookies, mobile apps, purchases, forms, email). It’s unique. It’s the most valuable type of data organizations can collect. Why? Because, these are existing customers who are interacting with your brand, already. They have behaviors that can be analyzed and leveraged. It’s also limited. In quantity and in insights. But still, very valuable. ©BravoEchoInc,2015 1ST PARTY DATA
  25. 25. 2nd Party Data is another organization’s first party data. This is a growing area for audience targeting acquired through strategic partnerships and alliances. 3rd Party Data is data you buy from companies that are data aggregators. It’s becoming less popular given the backlash from privacy groups and consumers. ©BravoEchoInc,2015 2ND AND 3RD PARTY DATA
  26. 26. A technology that allows an advertiser to serve up an ad to a visitor who has been to their site. Retargeting has evolved to include Site, Search and CRM retargeting. And these audiences can be bought programmatically. They say 2% of online shoppers convert the first time around. Retargeting helps to bring back the other 98%. ©BravoEchoInc,2015 RETARGETING
  27. 27. ©BravoEchoInc,2015
  28. 28. A Tracking Pixel is essentially a piece of code that’s placed on a web page by a marketer. Not viewable by the users. They can be placed where a sale or conversion takes place or across sites. Pixels also trigger Cookies which store information about the user. The cookie is what allows ad networks and exchanges to ID a user across sites and serve up an ad. Pixels are extremely valuable in tracking campaigns and creating user profiles to create look-alikes. ©BravoEchoInc,2015 TRACKING PIXELS AND COOKIES
  29. 29. It’s simple a way of leveraging and analyzing data from your existing customers — generally your best customer profiles — for targeting. Once characteristics, behaviors and profiles are identified, companies develop “look-alike” models. It’s about broadening reach by finding new prospects who behave like current customers. A technique that allows for targeting to be much more precise and efficient with media dollars. ©BravoEchoInc,2015 LOOK-ALIKE MODELING
  30. 30. Real-time bidding is the buying and selling of ad space (per impression) in real-time through auctions held. RTB is not its own platform — it’s a type of technology that ad exchanges, DSPs, and SSPs integrate in order to perform these auctions. ©BravoEchoInc,2015 REAL-TIME BIDDING (RTB)
  31. 31. Trading desks are used by agencies and are a way to purchase ads and audiences in real time and measure results and report audience insights. Trading desks were created in order to give the advertiser and the agency more control over the ad placement and more closely examine the results to optimize if and as necessary. ©BravoEchoInc,2015 TRADING DESKS
  32. 32. Preferred Programmatic — Buyers who have more information than other advertisers because it takes place outside an auction, and they have the right of first refusal over impressions. It’s based on set CPM but non-guaranteed inventory. Programmatic Guaranteed/Direct — Buyers negotiated a set price and run date, outside of an auction. And it’s based on a set CMP and guaranteed inventory. ©BravoEchoInc,2015 PREFERRED PROGRAMMATIC VS GURANTEED/DIRECT
  33. 33. The Life of An Ad Impression A CLOSER LOOK AT PROGRAMMATIC
  34. 34. ©BravoEchoInc,2015
  35. 35. Pros & Cons A CLOSER LOOK AT PROGRAMMATIC
  36. 36. Efficient in Process, Targeting, and Spend Control and More Data Flexibility with Tactics and Spending Test and Learn Approach Evolving beyond RTB Evolving Opportunity for Brand Impact ©BravoEchoInc,2015 THE PROS
  37. 37. Remnant Inventory Control over Sites and Context Transparency Hidden Costs/Fees The Loss of Storytelling ©BravoEchoInc,2015 THE CONS
  38. 38. What’s the role of storytelling? A CLOSER LOOK AT PROGRAMMATIC
  39. 39. ©BravoEchoInc,2015
  40. 40. Programmatic has traditionally been a tool focused on direct response campaign buys. Meanwhile, direct site buys ensured premium inventory promoted brand and leveraged creative that pushed brand awareness and bigger storytelling. Part of this stemmed from the historical perception that programmatic was limited to remnant (bad) inventory. However, programmatic has evolved and matured. So now it’s time to understand the opportunity for brand messaging and storytelling. ©BravoEchoInc,2015 DIRECT REPONSE RULED
  41. 41. Facebook and Adaptly (social media ad platform) put these two marketing strategies to the test with Refinery29, a fashion lifestyle site, to see which would generate more email subscriptions. ©BravoEchoInc,2015 SEQUENCED STORYTELLING 
 VS CALL TO ACTION
  42. 42. ©BravoEchoInc,2015 GROUP 1: SEQUENCED STORYTELLING
  43. 43. ©BravoEchoInc,2015 GROUP 2: SUSTAINED 
 CALL TO ACTION
  44. 44. ©BravoEchoInc,2015 THE RESULTS
  45. 45. -View-Through, increased 87% by those exposed to sequencing storytelling -Subscription rates increased 56% by those exposed to sequential storytelling ©BravoEchoInc,2015 SEQUENCED STORYTELLING PREVAILS
  46. 46. The idea of telling a story through a series of messages and the cumulative effect is not new. But the idea of doing it in real-time is. Building a sequential brand story that leverages real-time technology and insights, across multiple digital devices, allows advertisers to change the story and creative at each step. Although the challenge has always been about engaging and entertaining the consumer, the new layer is getting the audience to become participants in integrating the pieces of the story. ©BravoEchoInc,2015 SEQUENTIAL STORYTELLING
  47. 47. Just A Trend? FUTURE CONSIDERATIONS
  48. 48. In 2014, the most dramatic growth and expansion in programmatic occurred. This year, nearly $15 billion will be spent programmatically, about 55% of total display ad spending. By 2016, spending is predicted to reach $20.41 billion, nearly 63% of total display spend. ©BravoEchoInc,2015 A CONSISTENT PATTERN OF GROWTH
  49. 49. In 2013, AmEx spent $128.5 million on online display ads and was the 9th largest online display advertiser, according to Ad Age Datacenter “American Express would like to transform their Display Media Channel to become 100% programmatic…We believe the advancements in programmatic buying give Amex the opportunity to get much closer to the digital media campaigns specifically using our expertise, data and resources.” - 2014 RFP distributed by AMEX ©BravoEchoInc,2015 AMEX SHIFTED TO PROGRAMMATIC
  50. 50. Mondelez brands Oreo and Ritz bought :15 Super Bowl ads this past year to test and pilot programmatic buying in TV “Programmatic fits within the larger digital optimization strategy we’ve been employing for the last year as we shift more media spend to digital, and online video is a major area for growth.” -Ivelisse Roche, Mondelez’s , Associate Director for Global Media 
 and Consumer Engagement ©BravoEchoInc,2015 MONDELEZ SHOWS EXTREME CONFIDENCE
  51. 51. Time Inc — publisher of People, Fortune, SI — announced earlier this year, the decision to let advertisers buy print programmatically. Target is among the first of advertisers to experiment. “With this process, print is now as easy to buy as digital.” -Andy Blau, Senior VP of Ad Sales and Marketing for 
 Time Inc. Branded Solutions “The ability to start to experiment with print and buy it programmatically fits nicely within our overall strategy." -Kristi Argyilan, Target's Senior VP of Media and Guest Engagement ©BravoEchoInc,2015 TIME INC SELLS PRINT PROGRAMMATICALLY
  52. 52. Where will we be in 2020? FUTURE PREDICTIONS
  53. 53. ©BravoEchoInc,2015 5 PREDICTIONS FOR WHAT MARKETING WILL LOOK LIKE IN 2020 BY
  54. 54. ©BravoEchoInc,2015 It moves beyond digital to TV, print, and radio. #1 ALL CHANNELS BECOME PROGRAMMATIC
  55. 55. ©BravoEchoInc,2015 Technology will become part of the planning and development of marketing. After this transition, technology will become part of the core fabric of marketing. #2 TECHNOLOGY AND MARKETING MERGE
  56. 56. ©BravoEchoInc,2015 New tools have made fans and consumers more accessible than ever. Create a community with them and have more direct conversations. #3 OWNING YOUR AUDIENCE
  57. 57. ©BravoEchoInc,2015 Smart homes, TVs, cars, and phones are all becoming interconnected. Smart marketers will take advantage of this. #4 CONNECTED EVERYTHING, EVERYWHERE
  58. 58. ©BravoEchoInc,2015 People will reward the brands that do good and punish those that don’t. Brand citizenship will turn into a marketing function that drives transactions and scale and creates advantages for companies in the talent wars. #5 DOING GOOD IS GOOD BUSINESS
  59. 59. THANK YOU
  60. 60. ©BravoEchoInc,2015 SOURCES Videos "Big Data Meets Presidential Politics.” CSC. https://www.youtube.com/watch?v=6ZOfnFCMHTM "The Evolution of Online Advertising." Interactive Advertising Bureau. https://www.youtube.com/watch?v=1C0n_9DOlwE "200ms: The Life of a Programmatic RTB Ad Impression.” MediaCrossing. https://www.youtube.com/watch?v=rTg9l4d8MU4 Additional References Gallagher, Sean.  "Built to win:  Deep inside Obama’s campaign tech." http://arstechnica.com/information-technology/2012/11/built-to-win-deep-inside-obamas- campaign-tech/ Iseenberg, Sasha. "How President Obama’s Campaign Used Big Data." http://www.technologyreview.com/featuredstory/508836/how-obama-used-big-data-to- rally-voters-part-1/ Oetting, Jami. "The Definitive Glossary of Programmatic Advertising." http://www.chango.com/resources/magazine/storytelling-in-a-programmatic-age/ "Programmatic Advertising 101.” Chango.com. http://www.chango.com/resources/magazine/storytelling-in-a-programmatic-age/ Limon, Kathleen. "The Difference Between First, Second and Third Party Data."  https://retargeter.com/blog/general/difference-first-second-third-party-data-use Tyler, Mike. "The Pros and Con of Programmatic Ad Buying." http://advertisinginstitute.com/pros-and-cons-of-programmatic-ad-buying/ "The Value of Storytelling on Facebook for Marketers.” https://www.facebook.com/business/news/value-of-storytelling-on-facebook "The Science of Social Media Advertising.”  Adeptly, Facebook and Refinery. https://fbcdn-dragon-a.akamaihd.net/hphotos-ak-xft1/ t39.2365-6/10333119_1457635661160496_168768318_n.pdf "Storytelling in the Programmatic Age.”  Chango.com. http://www.chango.com/resources/magazine/storytelling-in-a-programmatic-age/ "US Programmatic AD Spend Tops $10 Billion This Year.” eMarketer. http://www.emarketer.com/Article/US-Programmatic-Ad-Spend-Tops-10-Billion-This-Year- Double-by-2016/1011312 Beer, Jeff.  "25 Predictions for What Marketing Will Look Like in 2020.” http://www.fastcocreate.com/3043109/sector-forecasting/25-predictions-for-what- marketing-will-look-like-in-2020

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