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Is Our Future Programmatic?

  |  February 11, 2014   |  Comments

Programmatic marketing will likely be a big driver of display and other digital spending in the coming year, as the programmatic approach benefits all players in the ecosystem.

One of the promises of marketing automation software is, of course, the "automation." Marketers take full advantage to improve efficiency and augment our staff. Some aspects have "set it and forget it" components - like search optimization and email trigger messaging. Of course, you can never truly forget about anything that is running auto-magically - keep an eye on your messaging, timing, and results. Still, automation has many rewards. The key benefit is that the team is freed from campaign production and able to focus on strategy and offer development and interpretation of the analysis.

If we move automation from a technology layer to a strategic layer, then it becomes "programmatic marketing." Programmatic here means that automation and process align to improve accuracy and allow for real-time adaptation to customers' online behavior. It includes the traditional bidding that is done programmatically, but now can expand to include how campaigns are designed, executed, and optimized across channels like display, email, mobile, and search.

One big fan of this move to programmatic marketing is Bruce Biegel, managing partner at research/analyst consultancy Winterberry Group. I spoke with him recently about one of his 2014 "predictions" that programmatic marketing will be a big driver of display and other digital spending this year.

"We are used to search being automated and efficient to execute, but display is not as easy as search. It is a convoluted and complex ecosystem," Biegel says. "The ad-tech market set out to solve that program last year, and it is still solving it. I'm confident that if we can make search easy with a programmatic and automated approach, we can do the same for display."

To that end, programmatic approaches are now widely adopted throughout the ecosystem. Consider all the live, real-time bidding on an exchange or in campaign execution. This is potentially more than "real-time" advertising based on a sort of "search auction on steroids" concept. Winterberry authors make a distinction in their whitepaper on the topic released late last year:

"The real practice of 'programmatic' is far more complex - and potentially far more transformative - than its most well known use case would suggest. In fact, what began in the domain of ad operations (as a means to facilitate the cumbersome execution of digital media transactions across 'non-premium' inventory) is evolving substantially to address a wider range of applications, presenting advertisers and publishers alike with a new foundation for driving both process efficiency and customer marketing effectiveness across a combination of paid, earned and owned media."

The study also found:

  1. Sixty-three percent of publisher panelists said their interest in programmatic has been driven primarily by a need to achieve "operational efficiencies" in the media transaction; whereas 
  2. 55 percent of advertiser panelists said their interest in programmatic has been driven primarily by a desire to "effectively engage" with target audiences across digital properties.

"Right now, 40 percent of the display market is programmatic," Biegel says. "The real change to get the last 60 percent has to come from a change in attitude and approach of the marketers." It will happen, he predicted, because the efficiencies in the programmatic approach benefit all players in the ecosystem - the agency who needs to improve efficiency and reach because they no longer get commissions for media; the publisher who needs to increase reach and custom ad buys while keeping operational costs low; and the marketer/buyer who needs to reach consumers more efficiently and effectively.

"The Internet is not ready for one-to-one marketing, due to personal identity information (PII) and privacy issues," he says. "However, we solve that problem by marketing to segments of audiences who are like-minded."

What will this evolution to a programmatic approach take? Biegel lists five factors:

  1. Audience Recognition in a Cookie-Less World. "Regulation and browsers are making cookies an endangered species. We need to operate in a world without cookies."
  2. Omni-Channel Addressability. "Marketers must recognize individuals across the life cycle first, and then across channels. It's essential, but a b*tch to execute. Look to data management platforms, marketing automation, and campaign management solutions to come to our aid. However, we also need internal teams to cooperate. Empires inside of organizations will fall."
  3. Unified Data Strategy With Data Governance. "Make a commitment now to ensuring the responsible collection and use of consumer data, and build in trust-building with consumers before it's too late."
  4. Internal and External Process Optimization. "Break down functional silos and restructure compensation and incentives, both internal and with partners."
  5. Continued Technology Evolution. "We will continue to see innovation among small players, and more consolidation of those point solution winners with companies that have mature products."

That sounds pretty hard - but it will take leadership from each of us and every chief marketing officer (CMO) to pull it off and gain the benefits. Consider these results from that same Winterberry study:

  1. Ninety-one percent of all panelists said they expect to deploy the programmatic approach in support of "audience segmentation" over the next two years. 
  2. Eighty-eight percent of panelists said they expect to deploy the approach to support "actionable insight development" over the same time frame.

Are you also moving to a programmatic marketing approach? Do you think this trend has legs? Please share in the comments section below.

Image via Shutterstock.

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ABOUT THE AUTHOR

Stephanie Miller

Stephanie Miller is a relentless customer advocate and a champion for marketers creating memorable online experiences. A digital marketing expert, she helps responsible data-driven marketers connect with the people, resources, and ideas they need to optimize response and revenue. She speaks and writes regularly and leads many industry initiatives as VP, Member Relations and Chief Listening Officer at the Direct Marketing Association (www.the-dma.org). Feedback and column ideas most welcome, to smiller AT the-dma DOT org or @stephanieSAM.

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