The popularity of programmatic advertising is surging, and it's beginning to take a more defined shape than in years past. While it hasn't quite reached maximum maturity, marketers are getting smarter about what programmatic does and the value it can bring. The increased shift to programmatic comes at a time when CMO budgets are also shifting. In fact, according to Gartner, CMOs are expected to outspend CIOs for the first time by 2017. Even more, AdRoll found that 66 percent of marketers plan to increase their programmatic ad spend this year, which is more than double the number that had such plans in 2015.
The true value in data is what you do with it
An increase in budget is putting marketers under pressure to demonstrate ROI across all investments, including data, which represents a significant portion of spend. As a marketer, being able to reach your exact target is paramount. Most times, CMOs have the data they need under their roof. They just need to mine it, build an infrastructure around it, and act on it. However, a 2014 CMO Survey report showed that more than 20 percent of marketers aren't using quantitative analysis to measure ROI. And at best, three-quarters have a qualitative understanding of the impact their activities have on their business.
What can we learn from these statistics? It's that the rise of programmatic has facilitated the need for a deeper understanding of data, insights, and technology. As it has become clearer that the true value of data is in what you do with it, data-focused positions have been added to the ever-evolving marketing arm of brands. From chief data officers to data scientists, these titles are charged with turning insights into strategic assets.
Members of the data science team should be a CMO's best friend -- they should be working hand-in-hand -- but they're being held back for two reasons: First, data overload. There is a lot of data available to marketers, who are typically trained to think more creatively. If just left up to the CMO, there will be analysis paralysis. The key is to break information down and not take it as a whole. Someone in a data-focused role will know how to do this, breaking down the data into sets that are actionable.
Holding back the harmonization of marketing and data teams is the second reason -- changing the perspective of CMOs. There is an understanding among legacy marketers that new data sets could expose flaws in previous efforts that other indicators deemed successful. While this could be true, more times than not there is the possibility of opening up a huge opportunity, including targeting a new audience or identifying subsets of an existing customer base. Marketers need to go into data and programmatic with the "opportunity" mindset. It's important to not get mired in the technology that powers the data, but rather understand what it allows you to do.
Reminders for marketers in the data haze
As budgets shift in the favor of marketers -- and as data becomes more than a buzzword -- there are a few things that marketers need to remember. At the CMO level, everything starts with the brand. With tech-heavy and data-centric tactics, it's easy to overlook goals. For programmatic to work the best, it needs to be positioned as a strategy. This is why programmatic is moving into the realm of "big M" Marketing versus "little m" marketing. At its core, programmatic advertising can help a brand achieve its goals of creating value for a specific group of people. This is contrary to the marketing of yesteryear, where advertising, promotions, and coupons rang supreme.
Additionally, it's critical that every party involved in a campaign recognizes the brand's goals. To get to one or more of these goals, programmatic may be a good fit … but you need to know why programmatic is the answer. The brands that are appropriately choosing programmatic advertising are the ones that have blended their marketing and data departments. Even more importantly, these brands are looking at their advertising holistically. They are applying data and insights across all channels, even if their percentage of spend shifts.
Gartner's recent CMO Spend Survey found that marketing budgets grew nearly 10 percent from 2014 to 2015, and they're expected to increase in 2016. With that in mind, don't forget about the valuable data that is under the hood -- and the capable people that can advise how to evolve data and use it. Remember, even if programmatic advertising scales, the strategy is the same: Reach a defined, finite audience at a specific frequency cap regardless of device.