Google’s Matt Brittin once likened programmatic to teenage sex – and it’s easy to understand why. Everyone seems to be worrying about whether the competition is doing more of it, or doing it better than they are. The truth, though, is that worryingly few people know what they are doing at all.
Brittin’s analogy is all the more disconcerting when you consider that, in Europe, roughly half of digital display ads are already delivered through programmatic (Emarketer, November 2015). Despite this, roughly half of marketers say they had “little or no knowledge” of the technology deciding where and when their ads appear (IAB, January 2016). Are brands risking their own future by blindly taking the plunge? Are they missing the real opportunity? And is there a more informed way to plan out a strategy for programmatic?
We brought together TNS’s Digital Director Jonathan Sinton and Caspar Schlickum, CEO of Programmatic Ad Platform Xaxis, to cut through the confusion and explore what brands should be doing to take advantage of programmatic – and what they shouldn’t. Here’s a selection of the highlights from their discussion:
What should marketers be using Programmatic for?
Jonathan Sinton (JS): Programmatic can really help make sure you are reaching the right strategic target at the right time and hence reduce noise. It can also help ensure the same person is reached effectively across different touchpoints.
Done right, programmatic has the potential to deliver both of these things. And impact increases significantly when you get both of them right.
JS: Programmatic is the executional end of a strategy, but that strategy has got to be right. If behavioural targeting or re-targeting are your only programmatic strategies, then you’ve got a problem. Marketers need to think more broadly about who the target is and how they’re going to target that audience effectively, with the right message. It should be used throughout the funnel, not just at the end.
Caspar Schlickum (CS): To be honest, I think the biggest opportunity for programmatic is also its biggest challenge. Programmatic is really nothing more than using an algorithm to make a decision about whether to place an ad or not. It can make marketing data actionable and executable, but only if you can organise your data to enable it to do that. Marketers need to understand that the challenge really starts there: organising data and getting access to the right data within their own organisation.
Do marketers know what they’re doing yet?
CS: Lots of people aren’t getting it right yet. But in a way, that’s understandable. Re-inventing approvals processes, being able to access data in different siloes, that’s all going to take a while for clients to figure out. People are still trying to invent business models, and a lot of the backwards integration hasn’t happened yet. If Programmatic were a sporting event, we’d still be at the stage where the players are arriving at the venue; it’s very, very early days.
Are marketers undermining brands by spending on Programmatic before they’ve figured out the right approach?
CS: Yes – well, to be honest, I think programmatic is at risk of undermining itself. It’s important to draw a distinction here between programmatic done well and programmatic done badly. There are lots of examples where programmatic is done in a very irresponsible way right now: re-targeting, cookie bombing, not applying proper frequency caps. All of that stuff causes huge amounts of annoyance to consumers, the end-users. It’s not fair to say we are spending too much. The question is: are we spending it on programmatic in the right ways?
Marketers should be challenging the partners they work with, whether that’s media agencies or third parties, not just about the results but about how those results are achieved. Are they real results, and are we sure we’ve delivered those ads in a way that hasn’t annoyed our end-users and consumers, and hasn’t damaged the brand?
What role can research agencies play in helping clients do more with programmatic?
JS: The most important thing that research agencies can do is reintroduce the concept of mindsets to targeting. If you go back ten, twenty years, all marketers were building strategic targeting segments that were a mixture of mindsets and behaviour. Now, suddenly, we’re seeing a whole lot of programmatic targeting just based on behaviour. Losing the mindset aspect is a real risk for brands. What we’ve found is that when you start to integrate mindset data back into programmatic targeting you start to improve the performance of the ads very significantly.
The problem with the targeting of in the past, of course, was that there was far less attention to how you execute against your segmentation. The poor media buyer was left to second-guess how you recreate the segments, and then of course the media was not targetable enough to execute effectively. The opportunity with Programmatic is that we have the potential to target them directly with a far greater balance between strategy and performance. It will enable micro targeting where you deliver slightly different creative messages to smaller segments and that will deliver a better outcome.
CS: I think there are two areas where the research agencies have a really big role to play in this. Firstly, instructing brands which audiences they should be trying to reach and secondly, providing the really granular micro user-level data, which we can use to enrich a profile we already have or create a profile we don’t already have. That way we can actually target advertising against that person or run a lookalike algorithm and find more people like them. The criticism of segmentation always was that you would lose all of its richness and depth when it came to actually targeting the people. A ‘Happy Harry’ or a ‘Sad Sally’ would become a male aged 25 to 35 or a female aged 40 to 50. With Programmatic we’re able to run a look-alike model and then deliver advertising to 10 million data points that are very likely to represent your ‘Happy Harrys’.
Do brands need a more imaginative approach to the data behind programmatic?
CS: This is going to be the real difference between brands. You see some clients who are many years down the path with data strategy and creating their own data profiles, and then others who haven’t really started to think about it yet. The ability to have your own, unique data to integrate into programmatic is going to give you a real secret sauce, and a critical competitive advantage.
JS: What’s actually going to differentiate a brand in this world of data? That’s where you need the secret sauce that Caspar talks about: a way that you’re using your own data to help you target people better than your competitors, and it’s going to make integration really important. I think you’ll find big advertisers insisting more and more on the ability to combine data from the likes of Google or Facebook with their own data, in order to target people better.
Is programmatic about more than just display ads?
JS: What’s really hot right now is obviously ‘moment marketing’: making sure you’re reaching the right person at the right time and on the right platform. Now with something like social, it’s not scalable to have a team of people sitting there responding to every tweet about your brand – so using programmatic to deliver around social moments is going to become more and more common. There are organisations out there doing that already. If you can plan effectively around how people express themselves in different social moments, then you can absolutely target people through programmatic.
What does programmatic mean for advertising creativity?
CS: It’s an interesting philosophical question to think of the role of marketing in a world ten years down the line, where machines increasingly talk to each other, and consumers have to make less and less conscious choices about what they want and when they want it. I think that the task of creative agencies will increasingly be to create these moments of serendipity, which bring people into a conversation and turn them into actionable data points. We have to think about creative, not just in terms of whether it moves the brand metrics or sells more stuff, but in terms of the data it can capture and create. If you apply that lens to a creative brief, you end up in a very interesting place. We’re always telling brands, for example, that they need a presence on Ecommerce platforms not because of how much product they can sell, but because the people on those platforms create such hugely valuable data.
Data strategy becomes extremely important, and that has implications for the creative that helps generate the data, as well as the media plan for executing against it.
Putting programmatic performance anxiety to bed
How do marketers deal with the pressure to get programmatic right whilst ensuring their brands’ long-term health? To build a sustainable approach, they need to focus less on chasing behaviour in the here and now, and more on developing a data strategy that can consistently target the right segments – and deliver long-term competitive advantage. Programmatic will shape the future of media planning and creativity. An insight-led approach to collecting and organising data is the best way to prepare for it.