Programmatic buying is scaling rapidly, with IDC forecasting nearly $14 billion in real-time buying spend by 2016. This exponential growth is reason enough to pay attention. But the possibilities of programmatic marketing are equally impressive, with an additional $66 billion forecasted in 2016 for programmatic marketing platforms – the approach by which marketers build a continuous, optimized customer engagement capability through the strategic application of technology, data analytics, and media.
For marketers and their agencies challenged by the data deluge and old-style decision-making processes, programmatic marketing opens the door to a new world of more informed decisions – and more effective marketing. Imagine using consumer data and business rules to plan, execute, measure, and optimize every interaction with individual consumers, in real time. If it sounds impossible, it was – until recently.
Turning the Internet Into a 24/7 Customer Alert Engine
If you’re involved in any aspect of digital marketing, you know that as consumers click across channels, they generate a torrent of data. There’s been lots of talk about using big data to understand consumer behavior, but it’s only recently that marketers have truly been able to harness it in game-changing ways.
To spot trends and make correlations, programmatic marketing gathers and analyzes real-time advertising data to continuously fine-tune all aspects of marketing – from identifying and understanding the best consumers and what they want to getting deep insights into their omni-channel buying journeys. And programmatic marketing encompasses the entire engagement lifecycle, sending personalized content to each consumer, throughout the buying journey.
What’s New in Programmatic Marketing?
It’s clear that programmatic marketing has moved beyond the theoretical. Now is the time for marketers to put it to work. To demonstrate the impact and potential of programmatic marketing, here are some top trends seen in the marketplace today.
- Agencies start to transform their model. As technology automates much of the heavy lifting of programmatic marketing, agencies are evolving and discovering the value of delivering real-time data and analytics to their clients. Innovators in this space are now small-to-medium-size independent agencies that have the freedom of choice and ability to transform models quickly, providing transparency and passing savings on to their clients. These agencies are automating tactics so they can fund their clients’ more strategic initiatives.
- Programmatic marketing is going omni-channel. Consumers are omni-channel, and so is programmatic marketing. A recent survey of marketers found that 83 percent of respondents reported they were likely to invest some or a great deal into omni-channel strategies. Marketers can no longer have multiple strategies, one for offline and one for online. They need an all-channels, unified dialogue that focuses on the customer as the centerpiece of all interactions.
- Mobile use is nearly constant. Multi-tasking is now part of how consumers manage their lives, so it’s no surprise we use our smartphones and tablets at home in front of the TV, and even in front of our laptops at the office. We do mobile searches while we’re in a store, place orders from smartphones, and make financial transactions from tablets. EMarketer notes in a recent report that tablets account for nearly half of the mobile RTB share – 46 percent of ads are viewed on tablets – while mobile ad views clocked in at 54 percent. With a projected 1.4 billion smartphone users worldwide by the end of 2013, including nearly 60 percent of American adults, using programmatic marketing to reach consumers where they are, when they’re in the mood to buy, is critical.
- Programmatic video is burgeoning. Programmatic marketing is beginning to merge with video commerce, reflected in the double-digit growth of interactive advertising. By 2014, it will account for nearly 25 percent of all video ad spend, outpacing the slowing rate of growth in TV advertising and potentially topping $1.1 billion. According to Forrester projections, spending on video ads bought via RTB will reach $686 million this year and top $1 billion in 2014. At that point, RTB spending on the format will account for nearly one-quarter of digital video outlays. Since nothing sells quite like sight, sound, and motion, marketers need to recognize this trend – and respond.
- Facebook Exchange is a counterweight to Google. It was the launch heard around the world. Less than 12 months out of the gate, FBX now accounts for nearly 7 percent of all Facebook revenue, and analysts expect it to reach 50 percent within three years. Advertising started with “right rail” (right-hand side of the page) but is moving into the user’s news feed. FBX-traded ads are getting bigger and moving into mobile and video, too. Moreover, marketers can retarget users on Facebook, and bring in first-party, third-party, and CRM data to target their exact audience.
- Programmatic is extending to upfront and guaranteed media. Programmatic buying earned serious cred by delivering outstanding results from exchange-traded media, so it should come as no surprise that buyers are clamoring for programmatic access to premium inventory; nearly 70 percent of media buyers seek more access to inventory and nearly 60 percent look for preferred access, according to a recent report. Publishers are responding by offering their inventory programmatically or by joining private exchanges. And buyers and publishers are using programmatic marketing to make smarter decisions on direct-bought inventory. Why use random rotations when you can carefully select the right ad to show to each user based on her demographics, intent, and behavior?
The Programmatic Evolution Continues
Today, we’re looking at all of the data that results from media and realizing it’s a goldmine of insight into user behavior. But more importantly, it’s a roadmap for developing an “always-on,” customer-centric engagement capability for making smarter decisions about investments and evolving business needs. Make no mistake about it, the age of programmatic marketing is upon us. It’s time for brands and their agency partners to make the critical changes to skillsets, marketing processes, and technology for economic advantage and to achieve true omni-channel, customer-centric marketing.
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