Marketers spend tremendous amounts of time and money crafting the perfect messaging and researching the perfect audience. But how can they be sure their messages will be delivered to the correct audience?
Traditionally, marketers have relied on website demographics, targeting broadly in hopes of reaching a few members of their target demographic. People looking at a beauty website must want to buy mascara, right? Fortunately, today's advanced algorithms have taken the guesswork out of targeting. Now, marketers can pinpoint demographics, monitor consumer behaviors, and serve exactly the right ads to exactly the right audiences.
However, most advertisers still spend about 80 percent of their budgets on guaranteed buys, and only about 20 percent on demand-side platforms (DSPs) and other programmatic buying platforms. DSPs let advertisers serve, track, optimize, and bid real-time on ads within a single interface, making it easy to maximize the impact of their ads.
So, why is the emphasis on the older, less effective option? Marketers tend to prefer guaranteed buys because they can choose premium ad space and content that aligns with their brand. For instance, many household cleaning product companies would prefer to advertise on a home improvement site with professional content rather than on an unpredictable social media platform.
Programmatic buying has been a very effective search approach for years, and now it is becoming an effective method for display campaigns as well. A relatively new strategy allows brand marketers to incorporate programmatic buying thorough a private marketplace of premium publishers and is quickly gaining traction. Programmatic premium offers the audience alignment and effectiveness of guaranteed premium placements and the efficiency of programmatic buying.
A primary factor in programmatic premium's appeal and success is that it's based on impression-level decisioning. Previously, marketers were required to buy impressions by the thousand, just to reach a few of the correct targeted impressions. But with impression-level decisioning, impressions are no longer bundled and can be purchased in multiples of one, which saves money and greatly reduces waste.
Consumers benefit as well. With programmatic premium, consumers receive advertisements based on their location and behavioral data. Rather than arbitrary, irrelevant ads, they're served personalized ad content. Programmatic premium ads also have context and are delivered at optimal times, when the consumer is most receptive. Together, all of these factors equal improved response and engagement rates, not to mention the ultimate benefit -- increased ROI.
The ability to serve the right message to the right person at the right time is paramount for marketers. For example, two neighbors both love to cook and share the same recipe sites, but they have very different eating habits. One is gluten free; the other can't get enough carbs. Traditionally, each would be served the same bagel ad as he or she perused bread recipes on a cooking site. Guaranteed buys usually serve the same message to everyone on a website, regardless of whether they are actually in the buying market. With programmatic premium, on the other hand, each neighbor would receive a different ad targeted to his or her specific preferences (e.g., a coupon for gluten-free tortillas versus regular).
Programmatic premium can generate impressive results for nearly any brand. This method increases return on ad spend, drives a more efficient spend for each impression, and even reduces manual campaign management and campaign execution costs.
Still not convinced? Take it from Bob Arnold, associate director of global digital strategy at the Kellogg Company, who discussed Kellogg's success with programmatic premium last month at IAB's Advertising Technology conference: "We looked at what ad networks and other ad tech providers were doing in the space and thought we could do it, but our managers wondered if we could be as effective," he said. "We decided to go with Google and Invite. A year later, ROI increased fivefold, and if you have those kinds of results, it's clear that this is more than just an efficiency play."
Joseph Krokus is a principal in the Digital Media Solutions group at SymphonyIRI.
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