Programmatic Buying: What We’ve Learned and Where We’re Going

Programmatic buying – the latest buzzword that you probably hear everywhere. It has been around for a while now, but it has become increasingly more important as marketers test and find value in its ability to engage consumers throughout all phases of the purchase funnel, from broad reach, low-cost tactics to lower funnel retargeting. So what are the key things to know about and where is everyone headed with this? To help answer these questions, I have spoken with Jay Habegger, CEO of OwnerIQ.

Leah Block: How are most marketers and advertisers using programmatic buying today and what are the important findings that are being uncovered?

Jay Habegger: Programmatic buying today seems to focus on one of two extremes:

  1. Narrow focus on bottom funnel retargeting strategies.
  2. Broad reach, low-cost “spray-and-pray” tactics.

The former is efficient, but lacks scale. The latter is scalable, but lacks quality. I have found that the most effective campaigns are those that are set up to engage consumers at all phases of the purchase funnel and also include vendor compensation that is appropriately based on the contribution level that the media has on each particular phase. For example, prospecting media placements should have a different cost-per-sale goal compared to retargeting. This would give vendors the flexibility and incentive to address all phases of the sales funnel and drive ROI.

LB: If you could give every media planner and marketer out there one piece of advice to keep in mind when planning to utilize programmatic buying, what would it be?

JH: It is important to give a lot of thought to what the appropriate KPIs (key performance indicators) will be for the campaign. Your success metric, or success metrics, should align with your campaign’s objective. Many times, buyers will mistakenly choose CPA as the key success metric for an ROI program. While it is a good indication of performance, how efficiently a sale is converted gives little indication of the ultimate value of that conversion. We have seen many advertisers fall into a trap, where they cannot scale their campaign because their CPA goals are too restrictive, which places limits on their program and results in a smaller ROI.

LB: Where is programmatic buying headed/what is the next big thing that everyone will be focused on?

JH: “Top funnel” attribution and data transparency will be much bigger themes moving forward. Advertisers and marketers are looking for solutions to help them scale beyond just their retargeting programs; solutions that will help them fill the funnel with new consumers. To that end, attribution models will evolve to begin assigning more value to “top funnel” impressions – impressions that reach consumers at the top or middle of the funnel, versus strictly focusing on the bottom of the funnel.

In addition, more advertisers and marketers are asking for data transparency. Last year, “where” we delivered ad impressions was a chief concern. However, next year will focus on “why” we delivered ad impressions, i.e., what specific behaviors are being targeted. More and more advertisers are consolidating their retargeting efforts and looking for alternative prospecting solutions to help them build scale. Vendors will be asked to be more transparent with their targeting methods and data sources to ensure they are reaching non-retargeting prospects.

LB: How is OwnerIQ embracing this new question of “why” that advertisers and marketers are asking?

JH: We have built a vertically integrated business model specifically designed to manage the process of data collection through to media execution. We form direct strategic partnerships with e-commerce and transactional websites to collect consumer browsing behaviors on products and brands. These partnerships include retailers, manufacturers, price comparison, and coupon websites. We also have our own DMP, CoEx, which was specifically built to manage our unique product and brand data. It contains a taxonomy of over 5,000 products and 8,000 brands. This enables us to apply a full funnel approach to all advertiser campaigns: convert mid-to-bottom funnel consumers closer to sale, while continuing to prospect against consumers that are more top funnel, but are still actively engaging with products and brands.

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