With programmatic buying quickly becoming mainstream, it will be important for marketers to understand this powerful tool, its potential, and its limitations.
Once the darling of direct-response marketers who lauded its unprecedented efficiency, programmatic buying – using automated systems and machine learning to purchase media – is fast becoming mainstream. Today, even brand marketers like Kellogg’s are jumping on the programmatic bandwagon, and enjoying impressive results.
With nearly 30 percent of display media being purchased programmatically, and total spend projected to top $9 billion this year, it will be critical for marketers of all stripes to understand this powerful tool, its potential, and its limitations.
Here are five questions to ask any potential programmatic partners before jumping in:
1. How Do You Source Your Inventory?
Programmatic buying platforms source inventory from exchanges – often from the same ones. This is fine: it helps ensure your campaign can achieve the scale needed to deliver the desired impact. But it’s important to understand the general makeup of your programmatic buying platform’s inventory, and how it will source inventory for your campaign. For example, is it sourcing inventory from private exchanges (increasingly popular among top-tier publishers)? From FBX? From one or a variety of mobile ad exchanges? Understanding how your potential partner sources inventory is a must before beginning any campaign.
2. What Fraud Protection and Brand Safety Controls Do You Have in Place?
Beyond inventory sources is the issue of inventory quality. In the early days of programmatic buying, there was a pervasive, negative (and only partly true) perception that it offered bottom-of-the-barrel inventory at bottom-of-the-barrel prices. Some platforms fell victim to bots, delivered fraudulent clicks, and poor or non-visible placements. The general "black box" methodology behind many buying platforms made many marketers skittish.
The good news is, thanks to the hard work by programmatic and real-time-bidding (RTB) platforms themselves, the IAB, and third-party ad verification services, programmatic buying is now more transparent than ever. It is not uncommon to receive reports with site lists for each impression, and among leading programmatic platforms, sophisticated fraud prevention features and brand safety controls (e.g., human screening, white and black lists) are now the norm. Ask about them.
3. How Fresh Are Your Datasets?
The promise of real-time bidding is the best impression at the best price at every instant of your campaign. True real-time bidding requires datasets and algorithms that update continually. Many programmatic buying platforms combine their own datasets with third-party audience segment overlays (e.g., from BlueKai), the latter of which won’t be updated in real time. Ask about how often audience segments are updated, and how the partner will determine whether a given user is added, kept, or removed from your target audience pool.
4. How Will You Measure Conversions, Especially on Mobile?
Despite the advances of programmatic buying, the limitations of mobile advertising – namely, the lack of persistent cookies – still exist in this space. The level of depth and insight available to you through programmatic buying largely depends on what first-party data you are willing to share. Without a pixel placed on your site, you’ll likely be limited to impressions and clicks.
Pixeling your website and mobile site, or installing your partner’s SDK on your mobile app, can yield richer reporting, including post-view behaviors and conversions, even across screens. Down the road, sharing key performance indicators (KPIs) like cost-per-acquisition, customer lifetime value, or purchase size can help your partner further optimize your campaigns. Start by sharing your goals, and ask your partner what’s required in order to track and optimize to those metrics.
5. How Are You Handling Privacy?
Programmatic buying for video and mobile inventory are the fastest-growing segments of the market, according to eMarketer. As marketers attempt to use big data to reach the same audience wherever it is – online, via mobile, tablets, and connected TV environments – the question of privacy reigns supreme. Ensure your partner is following all protocols and best practices with regard to personally identifiable information (PII), as outlined by industry organizations like TRUSTe and Evidon.
Of course, the questions above are just jumping-off points for the larger discussion of using data to build brands. Once you’ve answered them with your potential partner, the fun part – executing your campaigns and driving results for your business – begins.
Have other questions you always ask potential programmatic buying partners? Tweet them to me @kristinkovner for inclusion in a future column.
Kristin Kovner is a digital marketing, technology, and media industry veteran. Her firm, K-SQUARED STRATEGIES, helps high-growth media and tech companies develop and execute best-in-class marketing strategies. Prior to opening her own consultancy, Kristin served as the Vice President of Marketing Strategy at AOL, where she managed the AOL and AOL Advertising brands and set and executed the go-to-market strategy for AOL's owned and operated websites, including AOL.com, Moviefone, MapQuest, Engadget, and The Huffington Post.
Prior to joining AOL, Kristin served as the Head of Industry Marketing for YouTube and held various roles on Google's marketing team. Kristin has also worked as a journalist for Newsweek and SmartMoney, The Wall Street Journal's magazine, and as an economic consultant at Bates White LLC.
Kristin graduated Phi Beta Kappa and Magna Cum Laude from Yale College and currently lives in New York City.
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