Programmatic Advertising: Beginners Guide For Tauranga Based Businesses

[Image credit: Searchengineland.com]

What have you heard about Programmatic Advertising so far?

(Perhaps only by book summary from a few weeks ago?)

It seems like awareness is only now starting to grow here in New Zealand.

Some say that NZ is perhaps 3-5 years behind the rest of the world.

It’s time for us to catch up.

In fact, our timing is good, because getting involved now has the benefit of us accessing a much more mature system. The rest of the world has been removing the bugs for us!

I have come to believe that Programmatic Advertising is about to explode in New Zealand, so I’m looking for a handful of Tauranga based businesses that would like my help to get started.

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At the bottom of this page in an enquiry form, but first, let’s answer questions you might be wondering right now.

Q: “What is Programmatic Advertising?”

  • Programmatic Advertising is a way to deliver digital advertising to the right person, at the right time in the right place
  • It is the algorithmic purchase and sale of digital advertising space in real time, using a vast network of hi-speed machines and software to automate the buying, placement, and optimisation of media inventory via a bidding system
  • Therefore, advertisers like you are able to tailor a specific message to a specific person to maximise the opportunity to convert exposure to an ad into an action that you want prospect customers to take

In a very short amount of time I have come to believe that this method of advertising will quickly dominate all forms of advertising online.

Perhaps, very soon, instead of being called “programmatic advertising” it will simply be called “advertising” because it will just be the standard way it’s done.

All this is possible is because the majority of smartphone users willingly and continuously allow themselves to be located, and are okay with transmitting this highly sensitive information using the apps they love.

Typically, programmatic ads are served on:

  • Mobile devices like mobile phones and tablets
  • Desktop PCs and laptops
  • Connected TVs
  • Digital out-of-home and radio

The 4 main Programmatic Channels / Advertising Formats are:

  1. Display (the traditional banner ads on websites + new formats)
  2. Mobile (the distinction between tablets and mobile phones is becoming increasingly blurred)
  3. Video (no other media captivates our attention quite like video)
  4. Social (such as Facebook, LinkedIn, Instagram, Snapchat, Pinterest, Tumblr, WhatsApp, Vine etc)

Q: “What are some examples / case studies of how we could use Programmatic Advertising?”

  1. Wouldn’t if be great if you could create a list of people who walk into your competitors stores over a month, and start displaying your ads on their mobile phones the following month to persuade them to choose you instead?
    • Easy. This is known as: Geofencing, Geolocation, Geotargeting, Competitor Conquesting
  2. Wouldn’t it be great if you could create a list of people who visit your website, and display your ads to them on their desktop, laptop, and mobile device over the next 30 days to entice them to come back to your website and make a purchase?
    • Easy. This is known as: Re-targeting,  Re-marketing
  3. Wouldn’t it be great if you could create a list of people that have never been a customer of yours before, have never even visited your website, but their online behaviour over the last few days/weeks has indicated that they are ready to buy from a businesses in your category, so you can display your ads to them to appeal to them at just the right time?
    • Easy. This is known as: Browser Behaviour Targeting
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Q: “How can we use Programmatic Advertising to reach new (and existing) customers?”

There are 4 main ways:

  1. Prospecting or Branding
    • Need high-level advertising impact and a high degree of viewability and effectiveness? Then use video advertising media, rich media display and the Facebook Newsfeed
    • Need to increase your reach in a cost-effective manner? Then use standard display advertising
    • But you don’t have to choose, you can have both!
  2. Predictive Targeting
    • First, information is gathered about users that haven’t visited your website before. The information includes technical characteristics, the context of visited sites and their anonymous behavioural data derived from external sources
    • Then, probability’s are calculated about the users likely behaviour of purchasing the products and services from your website
    • If the probabilities favour you, your ads are placed for them to view
  3. Retargeting
    • Did you know that the most effective data in Programmatic Advertising is your own? It’s called “1st-party data”
    • A script is placed on your website which places a cookie on your visitors devices. For the next 30 days your ads follow them around on the internet inviting them to come back to your website
  4. Marketing to Existing Customers
    • Let’s use your CRM or e-mail list, plus other online marketing channels to retarget existing customers to increase your revenue with cross-selling and up-selling

Q: “How many ad impressions are for sale?”

  • The volumes of inventory available on ad exchanges seem to be unlimited
  • For example, in France 100 billion ad impressions are for sale programmatically every month (Source)
  • France’s population is 66 Million, NZ’s is 4.7 Million, so it is reasonable to assume that there are 8 Billion ad impressions for sale in NZ every month. Enough to go around.

Q: “What are the 5 main Programmatic Advertising Channels, Formats and Approaches?”

  1. Facebook Advertising
    • In exchange for free use of the platform, users expose a staggering volume of data about themselves, much of which is accessible to advertisers
    • Additionally, the value of an ad exposure can be amplified by the social context on social networks. It is in our human nature to pay closer attention to the actions taken by those close to us and in our social circles
    • Perhaps Facebook’s domination of the social media category will be slowly eroded by emerging social networks, but it is still a giant
  2. Mobile Advertising: Out-of-Home-Use of Mobile Devices
    • Sometimes disrespectfully referred to as “Bored-in-line” use, the local context and the interaction with the direct, local environment are most important.
  3. Mobile Advertising: At-Home-Use of Mobile Devices
    • Often as a second screen as one big portion of mobile device use is at home. End users often use several screens parallel
    • Apple, Amazon, Microsoft and Samsung have been experimenting with voice recognition at home for quite some time
  4. Online-Video and Digital Out-of-Home Advertising
    • Nothing captures and holds attention like online video
    • Ads served digitally whilst out-of-home are also effective
  5. Content Marketing and Native Advertising
    • Instead of slapping banner ads above and below content, advertising has evolved to become part of the content itself to the point where it is often indistinguishable. Because it is targeted individually to the user, it can be highly useful by providing ideas on what to read/watch next, or prompting a purchase of a valuable product or service (yours!)
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Q: “How has Programmatic Advertising come about?”

Programmatic advertising actually emerged from a number of different developments initiated well over 5 years ago and only became a game-changer when these 7 developments came together:

  1. Immense computing power:
    • Complex data needs to be computed in milliseconds in order to allow for real-time marketing decisions.
  2. Inexpensive data storage:
    • Millions of anonymised stored data points can potentially be used to forecast campaign-specific values for each individual ad space.
  3. Science in marketing:
    • New technology allows marketers to persuade mathematicians and quantum physicists to join them in their work.
  4. Stock exchange structures when trading ad space:
    • Pricing based on real-time supply and demand for each individual ad impression opportunity at the moment it is created helps to make markets more dynamic.
  5. Globalization of advertising markets:
    • Advances in standardization, a global infrastructure and globally operating market players help to speed up the pace of development.
  6. Fast data connections
    • Correspondence on how to get the most out of an individual ad impression can be sent around the world several times over within a matter of milliseconds.
  7. Personalisation
    • “Real value comes with real identity” is the basic principle now banishing the pure anonymity seen on the web during its infancy.
    • Log-ins and permissions enable dialogs to be conducted across multiple devices.

Q: “What are the 5 main characteristics of programmatic advertising?”

  1. Granularity
    • Full consideration of individual ad impression opportunities together with their general parameters, specific recipients and specific advertising environment
  2. Real-time trading
    • Deciding on a specific advertiser or a specific ad impression opportunity at the time of its creation and based on the latest data
  3. Real-time information
    • Assessing the available opportunity based on its highly specific characteristics and relevant empirical data collected to date
  4. Real-time creation
    • Advertisers serve a (where possible: dynamic and data-driven) ad that is best suited to the opportunity immediately after winning the bid
  5. Automation
    • An automated booking and posting process
    • In a nutshell: “Programmatic advertising describes the automated serving of digital ads in real time based on individual ad impression opportunities” (Bardowicks and Busch 2013).

As I stated at the top of this article, it connects media with creation in order to serve the right people with the right messages at the right time, and all of that on a large scale.

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Q: “What about Programmatic TV, Outdoor, Radio, and Wearables?”

Yes! Experiments are underway already, and access to advertisers is improving rapidly.

  • Digital Outdoor
    • Digital Outdoor is already starting to be ad-served, so buying it programmatically is the next logical step
    • Data signals like weather can influence the value of an outdoor ad. Being able to launch campaigns in minutes and change ads in seconds may make programmatic outdoor interesting for both buyers and seller
    • However, this type of display can be seen by many people at the same time, so it will be difficult to get the one-to-one relationship that other types of digital advertising can generate
  • Radio
    • As music listening moves into one-to-one digital channels with web radio and music streaming services, opportunities for programmatic buying are already becoming available
  • TV
    • TV is the largest advertising channel and the power of video to drive both brand values and actions is unparalleled
    • TV usage is still growing in most markets, but younger audiences move more and more into non-linear video-watching online, so advertisers want to do integrated screen planning, combining traditional TV with online video, to maximise reach and impact
  • Wearables
    • Some believe that wearable computers could be the next revolution
    • With wearables, health data in particular comes into play for advertisers
    • For example, the device tracks how sedentary one has become in recent weeks so that data could be used to help encourage users to find the nearest running club or gym via advertising
    • Bio data being shared with advertisers is not something consumers have been widely exposed to so far, but the potential for this device to help live a fitter, healthier life is significant, and actionable bio data for the advertiser unlocks a tremendous opportunity

Q: “What’s the difference between 1st, 2nd and 3rd-Party Data?”

1st Party Data

  • Is the information you collect directly about your site visitors or customers
  • It may include names, addresses, phone numbers, site-interaction data and information about products purchased

2nd Party Data

  • Is when businesses like yours sell their 1st-party data to each other on the open market

3rd Party Data

  • Is when anonymous data is collected on a large scale, and sold in bulk
  • It may include socio demographic data like age, gender, location-data, psychographic data like behavior, opinion, and interests

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