Caption:
Left to right: Joanna O’Connell, CMO, MediaMath; Clement Teo, Senior Analyst, Forrester Research
enterpriseinnovation.net
Mention ‘Programmatic Marketing’ and marketers often see complexity. Others hail it as the new buzzword in marketing that will need to be investigated—for later. For some, it is a boon that will give them an edge, while many traditional advertising agencies see it as a double-edged sword.
The truth is that programmatic marketing aims to answer many a marketer’s biggest conundrum: Managing end customer engagements effectively.
Previously, online advertising used to be a relationship game. Agencies will strike deals with clients for large pre-determined CPI (cost per impression) or CPM (cost per thousand impressions) campaigns. They will then assign their staff to handle the account.
A programmatic marketing platform removes this. It uses RTB (real time bidding), DSPs (demand side platforms) and advertising APIs (application programming interfaces) to target specific customers in real time.
Essentially, programmatic marketing shifts the power back to the marketers’ hands. Using a platform, they can now target, buy, localize and even optimize to the end customers’ expectations. This is opening up new possibilities for marketers, and introducing a fundamental shift in the world of advertising.
The recent Marketing Leaders Breakfast Forum, organized by CMO Innovation and MediaMath, highlighted the growing importance of programmatic marketing to Asian advertisers and marketers. ThemedThe Programmatic Marketing Promise, it saw a lively discussion on the promise and challenges that the concept brings.
Rethinking marketing
“The whole world of advertising has become tilted,” said Clement Teo (photo right), Senior Analyst, Forrester Research, when he opened the Forum.
Teo noted that the Internet of Things (IoT) and mobility are changing the way advertising and marketing initiatives are created and consumed. “For example, in the coming months, with vehicles becoming connected to the Internet, we will see how companies can interact with drivers in new ways. Home devices and screens will also start interacting with us. Essentially, marketing is being broken down,” he added.
The reason is that we are becoming more data-driven. With customers and their devices tethered to the Internet all day long, marketers are flooded with data. Turning this data into actionable insights is where the leading marketer shines.
“With so much data and information, marketers have an opportunity to interact with consumers. The challenge here is ensuring smooth consumer journeys from one device to the next, and keeping abreast with them along the way. We also have to make sure the journey is cohesive, positive and relevant to them in terms of their interaction with [brands],” said Teo.
This drive for data-driven marketing has expanded the wallets of marketers going beyond advertising dollars. Marketers now have the ability to purchase technologies to identify and analyze current and potential customers. Where they struggle is in finding the right agencies that can deliver and optimize.
Enter programmatic marketing. “With it, you can get more transparency around the prices you pay and become more granular. With ad placement level transparency, you gain control back and now are able to tell your agency partner where you want to serve those ads. Automation also allows you to optimize the ads [so that they] serve the right audience,” said Teo.
More bang for your money
Programmatic marketing can be complex. But those who wield it will enjoy the control, optimization and cost-efficiency it brings.
“It is automation of decision making and therein is the power,” said Joanna O’Connell (photo right), Chief Marketing Officer, MediaMath.
“It is an automation of processes, and to make the negotiation process easier and seamless,“ she said, adding that marketers should not mistake a programmatic marketing platform for a publisher.
She stressed that programmatic marketing is not going to replace humans. “It is just a totally different way of buying media. So it is individualized decisions, altered by data and powered by machines,” she said, adding that it allows us to “make intelligent one-to-one audience-targeted marketing decisions”.
To fully realize programmatic technology’s promises O’Connell noted that today’s marketing teams need to be multi-talented and multi-skilled.
“You need somebody who has a good understanding of the technology landscape; someone who is good at understanding the data landscape and sourcing the right data sets; good in understanding the media landscape and creating the right kinds of relationships. You also need someone with operational experience who can get into the platform and run it; and a big picture thinker to come up with the strategy. And then you come to the creative piece,” said O’Connell.
Changing conversations
Programmatic advertising has been around for some time but using programmatic advertising as part of a marketer’s marketing mix is still relatively new.
It is a formula already well utilized in the hospitality and financial services sectors. Instead of placing calls with travel agents and concierges or being at the floor of stock exchanges, marketers work through technology platforms that automate these efforts. In fact, high-frequency trading may even highlight the way programmatic marketing is evolving toward.
For O’Connell, this shift to an automated platform for advertisement purchases has created a fundamental shift in how media is bought and how advertisers engage with customers. “It’s a bit like internet search engines, where you have a single platform to access a world of customers and audiences.”
The automation cuts out complex advertisement-related operational tasks. This frees up additional resources for creativity and to do more real-time, targeted and localized advertisements – fast! Of course, this creates a power shift where traditional agencies and publishers are looking to defend their long standing brand relationships with their clients.
“It takes us from a world where publishers packaged inventories the way they wanted to, and sold impressions in a bundle for a flat price to one where you, as marketer or advertiser, are in control of the decisions. Essentially it allows you to use every impression to make an intelligent data-driven decision,” said O’Connell.
“Even when you have a working relationship with a publisher, you can still say ‘you know all these things about the user, and I want to go ahead’. Or inside a guaranteed buy, you can look at all the impressions and pick a few. This is a total power shift,” she added.
Disrupting old models
This power shift and the disruption to the “traditional publisher relationship model” are changing the way the advertising industry works, said O’Connell. Now marketers can holistically manage their end customer experience and innovate.
Programmatic marketing is also expanding—very fast. “You can use programmatic [marketing] to buy online advertisements for display, mobile and even TV,” she said.
It also allows new innovative means of advertising. For example, O’Connell noted the rise of sequencing advertisements that is now being used on social media websites that tells a story, drive interests, bring them through the marketing funnel and convert them into marketing qualified leads (MQLs).
However, for all the promises of programmatic marketing in shaping perceptions, its own perception remains the biggest hurdle to its future ascent.
Besides it being seen as complex, it is also facing concerns about fraud. This is due to a growing number of websites flooded by non-human traffic (NHT), and then defrauding advertisers. But to be clear not all bots are created for evil intent. Deciphering which ones are good for the brand is the challenge for marketers today.
O’Connell is convinced that this problem will be better addressed as more marketers become well-versed with programmatic marketing.
“Programmatic [marketing] is going to be the future,” she said. Although she admitted that it is not necessarily going to replace the entire traditional model, it is changing conversations and negotiations.
“The walls are showing cracks for those who used to hold on to the user experience,” she concluded.
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