How Is Data Changing Programmatic Buying?

The popularity of programmatic media buying has spiked in recent years, a trend that will continue as the availability of data increases.

Though media was once available at one set rate, programmatic buying has evolved to where marketers can bid different prices for each ad impression. The influx of user data – such as age, gender, location, browser type, and device used – now allows marketers to focus the lion’s share of their budgets on the most valuable demographics. On an individual level, marketers can utilize data to target consumers based on their online behavior, rather than just inferring their interests based on demographics.

“When we develop a target audience based on accurate shopping data and then activate that audience with programmatic buying, we can then refine the target as the campaign delivers, based on what they do,” says Paul Martecchini, vice president of marketing at Connexity, the price-comparing and marketing technology company formerly known as Shopzilla. “That creates a more accurate audience over time.

“Gathering real-time data allows us to reach customers that are currently in-market for specific products, like a red cashmere sweater,” he adds.

If someone looks at that red cashmere sweater online or puts it in a shopping cart but ultimately doesn’t purchase it, marketers can use retargeting to re-engage that consumer – another advantage of data within the programmatic space.

According to recent eMarketer research, programmatic digital display ad spending increased 245 percent from 2012 to 2014. While the market research firm doesn’t expect that number to increase quite as dramatically this year, it’s still on the rise. By the end of 2015, eMarketer anticipates programmatic spending to reach nearly $15 billion and account for 55 percent of total digital display ad spending, up from 24 percent just two years ago.

The combination of media and data helps marketers because of the increased segmentation opportunities, but Ben Kartzman, chief executive (CEO) of advertising technology firm Spongecell, thinks adding creative to the mix would be even more advantageous.

“The challenge [Spongecell’s clients] all say is, ‘We’ve done all this work and have all this data and we can do all these incredible things, but we’re basically serving people the same creative,'” Kartzman says. “That’s obviously a big gap in the industry as we see it.”

Kartzman says that if marketers use the same data to inform their creative that they do to influence their media buying, it would be more expensive but ultimately worth it. If there were 400 permutations of an ad, marketers could target as narrowly as possible, which Nielsen reported as being the most successful way to advertise back in September. Additionally, a greater variety of impressions would allow marketers to mix it up, ensuring consumers don’t get desensitized to ads by seeing the same ones all the time.

“I think three years from now, as it becomes easier to utilize data and it’s easier for brands to onboard that data, the integration will naturally happen,” Kartzman says.

Image via Shutterstock.

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