Programmatic Media Buying: Sitting at the Intersection of Owned and Paid Media

Digital advertising is coming of age and leading global media growth, eating into TV’s decades-long dominance. It’s been a steep climb, helped in part by the growth in programmatic media buying. Programmatic suddenly seems like a buzzword on everyone’s lips. But what exactly is it, and how do you optimize these advertising investments?

Some marketers equate programmatic media buying with technology platforms that allow real-time, automated bidding during the purchase of web banner ads. But strictly speaking, programmatic media buying refers to any automated process. Programmatic advertising leverages marketing technologies that automate the buying, placement, and optimization of paid media. It includes real-time bidding, but also buying through ad networks like Google Display Network and Facebook Ads API, or AOL’s Advertising.com for video.

Clearly, it is big business. PricewaterhouseCoopers forecasts that Internet advertising worldwide will account for one in three dollars of total advertising revenue by 2018. That growth – from revenue of $133 billion at the end of 2014 to $194.5 billion in 2018 – is in very close proximity to that of TV advertising, which is forecasted to be $214.7 billion three years from now.

While programmatic advertising represents only a portion of total Internet ad investment, its stake is growing. When it comes to confusion over what programmatic is and how to optimize it, it’s easy for marketing teams to overlook the relationship of data generated by your brand’s owned media and the placement of digital ads in the programmatic marketplace. Quite simply, your own first-party data from visitors to brand your websites and e-commerce platforms, social media, and mobile apps represents the secret sauce that can enable you to optimize programmatic buys for better ROI.

Programmatic sits squarely at the intersection of owned and paid media. Given the nature of the beast, data drives programmatic advertising. So, what data do you use to support your media strategy?

The Travel Industry Sets the Pace

The travel industry, one of the biggest advertisers, lets me anchor these questions in an example from the tangible world of marketing. The TUI Group, the world’s largest leisure and tourism company, has developed a platform to collect, integrate, and act on data generated across its integrated travel service offerings, including tour operator brands, travel agencies, hotels, and resorts.

tui-travel-service

TUI Group reports that it is using programmatic advertising fueled by first-party data generated on its own websites and customer interactions. The combination allows TUI to employ what it calls “dynamic retargeting” to serve product advertising relevant to the consumer. In other words, someone who has already signed up for a week’s holiday in Italy isn’t going to get served the ads promoting similar vacations the following week. It’s based on linking the data generated on the website with the ad-buying process.

TUI also reports using data to develop lookalike models. The company identifies customers who display specific preferences and behaviors and then creates audiences that look like those high-value visitors to increase reach and conversion.

Simply put, paid and owned media data need to come together to deliver on programmatic.

  • Owned Media: Visitors to a company’s owned media platforms, such as websites, social, and mobile, leave vast amounts of data behind them. You need to collect that data and integrate it into a master data layer with relevant types of second- and third-party data to optimize programmatic ad decisions. Time is critical. Retargeting ads as consumers express interest must happen quickly before the half-life of attention dissipates.
  • Paid Media: Brands place advertising across hundreds of sites using a variety of technologies. These include ad networks to buy, demand-side platforms (DSPs) to support decisions, and ad exchanges that auction ad impressions to the highest bidder. Data management platforms (DMPs) have evolved to help manage the data. The quality of those decisions, regardless of process or technology, depends on the type and quality of data that fuels them. Your first-party data can and should fuel these technologies to optimize results.

Both owned and paid media play a critical role in optimizing programmatic media strategy. The good news is, much of the most valuable data is already in your own backyard. You simply have to connect the dots between these all too often disparate worlds.

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