Programmatic 101: Everything you need to know but were too afraid to ask

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One of the biggest challenges to programmatic adoption is that people are afraid of it.

To counter this, marketers should keep the language and definitions simple. This was a key takeaway from a panel of experts discussing programmatic at a recent ClickZ Live digital marketing conference.

“In programmatic we have a tendency to use a lot of jargon, which creates a lot of fear, even within the industry,” said Aswin Regawa, managing director, platforms, OmnicomMediaGroup.

What is programmatic?

Matt Harty, senior vice president, Asia Pacific, The Trade Desk, kicked off the discussion by asking the panel to put forward their elevator pitch when defining programmatic.

“It’s ‘programmable advertising’… You want to target a set audience and until that audience is engaged, you don’t buy the ad placement,” Harty said.

Melvin Goo, general manager, OMD Indonesia added that the essence of programmatic is in its automated ability to buy not sites, but the audience. “It’s about buying the audience when [the ad] is most relevant to them,” Goo said.

The LUMAscape

An important, but complex map of images all marketers should have at their fingertips, is the LUMAscape.

There are different versions of the LUMAscape, here’s one for display:

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The LUMAscape is a document (of company logos) showing all the different partners that make up the programmatic ad-buying journey. On one side are the advertisers and on the other are the publishers. In between are all the different businesses that support programmatic buying.

These include the agencies; agency holding companies; agency trading desks; demand side platforms (DSPs); and supporting technologies such as brand safety and viewability. On the supply side are the platforms working closely with the publishers.

It raises an important question. How do marketers navigate the crowded adtech landscape?

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“How do you turn this crowded page of logos into partners to work with?” asked Harty.

Each logo has to be relevant to the final business objective, said Regawa.

“You have a lot of people who will collaborate with you, but if the essence of it has no meaning to the end goal – which is reaching consumers and delivering on whatever KPIs have been set – what is the relevance?” Regawa added.

What is the agency’s role, and can they do a better job?

The perception of programmatic isn’t always a positive one. The panel agreed that for marketers, programmatic is a beautiful thing, but for consumers, it can be annoying.

“When I tell people what I do, they say: Oh, you’re that guy that follows me around the whole Internet, and if I go to the bathroom, you follow me in there and serve me up a travel ad,” said Harty. This prompted him to ask the panel: “Can we do a better job? Can we be more subtle?”

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Goo said programmatic was still in its infancy, as was the digital industry as a whole. Agencies, marketers and partners should manage retargeting with frequency capping. “As an industry we have to get it right,” said Goo.

The rise in ad blocking means advertisers need to be even smarter about how they serve ads. “It’s about ensuring high relevancy for the consumer. I want to see what I want to see, and if you can project that, I will absorb that,” said Regawa.

How to use programmatic to target the user with relevancy

Goo said all parties were guilty of not being up to speed on programmatic. The technology is not only cost effective, but gives marketers enormous amounts of data to learn about their consumers.

“Programmatic is really important for speaking to your audience and to continually learn and retarget a lot of people to get better ROI,” said Goo.

Measurement and ROI

Current limitations to programmatic technology mean measurement is still largely action based around cost per mile (CPM), cost per click (CPC) or cost per impression (CPI) models.

The panel agreed that a fundamental shift needed to take place around media measurement.

“We need to stop worrying about the science and worry more about the real people and the real targets we are going after,” said Harty.

He suggested that might involve dropping click through rates (CTR) as a metric completely.

Goo agreed that CTR was not a good benchmark for measurement, and opened up advertisers to robots and fraud.

“What really matters to businesses is sales and growth. What if we start moving into the metric of ‘cost per valuable impression’ or ‘cost per growth’ or ‘cost per market share’,” asked Goo.

First party data and lookalike modeling

Educating clients on the value of sharing first party data (the information a brand or business has collected about their audience) beyond its use for retargeting, was highlighted as a key objective for marketers. Rather than using first party data to intrude and blast existing customers with more ads, marketers can use it to tighten and reduce the amount of media going out.

It can also be used for lookalike modelling. By profiling existing consumers and then cross-matching with the same, gives advertisers a stronger reach to engage new, potential customers or clients.

“We only want to see your data so we can see who has the highest probability to come and convert and become your next customer,” said Harty.

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Conclusion

Awareness is playing an integral role to programmatic adoption.

“The whole point of programmatic is it is action based, or it leads the person to a particular action, and once brands get that initial bit of understanding, then they are more keen, and then the actions speak for themselves,” said Goo.

Harty added that programmatic was new to everyone. “How do we communicate or show them that it is just a change in work flow, it’s not a change in anything fundamental. We’ve just finally got the tools now to advertise properly for the first time ever,” he said.

Programmatic is a great tool but can only grow if everyone is confident enough to actually use it, said Regawa.

He said that while investments in programmatic globally were rising, local [Indonesian] adoption was slow.

“That’s because not everyone understands the platform or functionality or what impact it will have on the business. In the ad world, it’s cool. But from my side at least, it’s a constant education of what the tool can do in a very simple marketing purpose, instead of programmatic jargon.”

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*Pictured L-R: Melvin Goo, general manager, OMD Indonesia, Aswin Regawa, managing director – platforms, OmnicomMediaGroup, Matt Harty, senior vice president, Asia Pacific, The Trade Desk.

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