An agency executive recently made the following comment in a December 2013 Digiday article:
"Lots of people will talk about programmatic buying in the same way that they talked about big data: without having a clue about what it really means. And in the unlikely event they do understand it fully, they won't know how to implement it or have the time or energy to figure it out."
From my many years in the programmatic space from a buy side and sell side perspective, this comment articulates the state of programmatic affairs brilliantly.
With the nascency of programmatic buying just behind us, media managers are now being presented with different kinds of challenges that are requiring them to adjust their industry paradigm and skillsets. Digital marketers who leverage programmatic buying through demand side platforms (DSPs) have access to a variety of game changing functionality whose efficacy and inventory is serving as an equalizing force for savvy digital agencies competing against larger media holding companies.
According to eMarketer, the usage of RTB through programmatic buying is pacing to hit $9 billion dollars by 2017, which means that in a very short time, programmatic buying will become the primary vessel to buy and sell media. This game changing functionality surrounding cost controls, inventory options, and execution has been well documented for years and is no longer a ”nice to have" but a "must have." For digital marketing managers navigating this space, managing a team of media planners or simply trying to mitigate financial obstacles, there are several items that should be considered to be successful.
Digital marketing stakeholders have been long fascinated by the ability to target a customer/prospect on an impression by impression. As the technology stack of programmatic buying improved, the ways to target these individuals has become more comprehensive -- advertisers have been jumping into the DSP game in droves. These new players have had to realize in short order that few things programmatic (aka technical media buying) media buying are as simple as they seem.
From a business level, marketing upper management need to have a fundamental understanding of programmatic buying so they can decide how to best position it, integrate the practice, properly staff for it, and for agencies, communicate its benefits to its clients. These managers will go through a similar learning curve as their predecessors who had to wrap their head around new digital marketing concepts such as that of big data, social media, or even search when it was first emerging over a decade ago. During the inception of each new digital marketing tool, there were organizational hurdles surrounding internal competencies, staffing, management tools, and campaign management experience.
For those still grasping onto a superficial understanding of these digital marketing concepts, some will tend to leave the competency, hiring practice, and organizational management to internal resources to "figure it out," which can have varied success. Unfortunately, in many cases this kind of practice is that of the blind leading the blind and problematic when that internal resource does not have the technical chops or the foresight to understand the impacts of business decisions. Even with the best of intentions, those who have a traditional digital media background will find an altered reality when they manage an internal DSP for the primary reason that DSPs allow for real-time inventory versus relying on publisher partners to deliver per insertion order specifics. This means that these managers need to understand how to forecast their delivery and understand how to optimize to performance KPIs, much like those on the publisher side do every day for their clients.
In the arena of programmatic buying, it behooves any business stakeholders to get "into the weeds" when it comes to:
- DSP/Product capabilities
- Programmatic industry landscape
- Performance benchmarks
- Staffing requirements
- Business development
- Technology investment
The first three technical topics informs the latter three business strategies as updates to DSP technology, vendors, inventory sources, and regulatory news directly affect how marketers will position themselves. This is not suggesting that marketing stakeholders should become versed in coding or the day-to-day trafficking. But rather, understanding the optimization levers that can be pulled, the latest innovation in mobile/tablet targeting, RTB direct buying, or opportunities in the expected Twitter exchange will better guide business strategies and investments.
Client's familiarity with programmatic
Apart from developing an internal knowledge base, a major hurdle for digital agencies is conveying these programmatic opportunities to clients and prospects. For those of us knee deep in these concepts it may be second nature, but it may require taking several steps back to explain the idea of programmatic buying to a client or a prospect in a new business pitch. Every client -- or prospect -- has a varied level of digital marketing sophistication and it is the job of the digital agency to help them achieve the kind of success possible through programmatic tools. This difficulty became even more apparent when I spoke as an opening panelist at last year's OMMA RTB conference in Seattle. After my panel, I heard other digital agencies and publishers venting about the difficulty articulating RTB concepts to their clients in a way that did not sound like rocket science or insulting to their intelligence.
For some clients, they may glaze over the concept and trust the agency to do good media work, while others need to be actively sold on the idea. Like any pitch, demonstration, or topline client review, it is important to deliver the programmatic message more like a top line story and less like a podium presentation. In this way, agencies can guide their clients through programmatic concepts and opportunities that make sense. Regrettably, this is sometimes much easier planned than executed for a variety of reasons:
- Programmatic competency
- Presentation/storytelling cadence unique to the audience
- Advising relevant solutions that are in line with client's stated objectives
- Ability to get to root and satisfy the questions the client has
- Setting realistic expectations of programmatic in the holistic media mix
- Digital marketing proclivity
- Priority of programmatic in organization
- Test budget tolerance
- Preconceived notions of the value of programmatic (direct response vs. branding)
- Willingness to learn (or perceived time it would take to learn)
Luckily, most of the above can be addressed with the right people that can understand their client's unique business, present programmatic buying strategically, and have enough technical chops to address any lingering questions.
DSP technical hurdles
Patrick Dolan, executive vice president and COO of the IAB said in a study last year,
"The rise of programmatic buying and the inherent operational efficiencies it promises offers a positive sea change for the entire digital industry, but, if we're going to take full advantage of programmatic buying's potential, it is incumbent upon the industry to overcome barriers to its success."
Dolan was cited as part of a larger survey of more than 250 executive-level thought leaders from across the digital marketing industry. This survey showed that a majority of advertisers and publisher panelists (85 percent vs. 72 percent) presently use programmatic buying strategies but one-third of the panelists cited brand safety concerns. The barriers that Mr. Dolan spoke about are not so much show stoppers but hurdles that can be overcome with varied levels of consideration. Besides brand safety other concerns include topics like click fraud, cookie targeting, RTB waste (yes, it exists), and transparency. Concerns like this have driven agencies and brands to spend budget on site/contextual verification services to mitigate this and have driven DSPs to add functionality in this department.
Although many of the issues today will be addressed through technical innovations, other unforeseen issues will undoubtedly show their face as more diversified needs arise. Looking back at the inception of programmatic buying, advertisers had limited display media options and were chiefly looking to retarget campaigns based on advertiser’s first-party data. Today, the needs of programmatic marketers have advanced to include rich media, video, mobile, and social inventory sources with the ability to leverage a wider array of cross channel data layered with look-alike modeling. Marketers have also pushed into programmatic branding initiatives that leverage the same targeting technology to being more accountability metrics. Due to this trend, big budget digital marketers are investing in enterprise or proprietary data management platforms (DMP) to collect and build audience targeting segments to leverage across their marketing mix. These tools are also leveraged to do analysis and other downstream activities that must be integrated into all the marketing channels that are to be tracked.
With all the possibilities and moving parts, it is important for managers to take a step back and ask themselves what the ideal programmatic practice looks like for their business and if this practice should be outsourced. The answers to these questions will inform what kind of foundational layer should be invested in. Some grandiose ideas may seem simple and straightforward but may have some unanticipated technical hurdles. In many cases, managers may find efficiencies outsourcing portions of this, while others are very successful making the large investments building this infrastructure in-house. Either way, do not overlook the technical nuances of programmatic buying as mistakes can be costly.
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