If you were to guess which form of advertising would see the most growth in 2017, what would your guess be? Social media? Video marketing? Both are good guesses and both will continue to important. But Media Post reports on Zenith’s Programmatic Marketing Forecasts, saying neither social media or online video will be the forerunner. Programmatic marketing will be.
The report estimates that programmatic marketing will take the lead. Surpassing online video growth by 25% and social media by 25%… rising to be nearly 60% of all digital advertising expenditure this year (Adobe says more than 70%), with the U.S. holding the majority of the ad market (Over 60% of programmatic ad market).
While this report is only referring to digital advertising, it’s slowly making its way into traditional ad space like radio and TV.
Considering that in 2012, programmatic marketing only accounted for 13% of adspend across the digital display market, this is obviously something that you should be looking into if you’re involved in marketing in any way.
Programmatic marketing explained
Programmatic marketing companies use automated technology to buy digital ad space with real-time bidding, allowing ads to be specifically targeted to certain people at a certain time. Traditional ad buying where you show a generic ad to larger, more general segments of your audience is becoming a thing of the past. With programmatic marketing, you’re able to drill down and precisely choose which ad will be shown to which people at what time. Ultimately, you get a better ROI since you aren’t wasting money on showing ads to the wrong people or wrong time.
Note: You may also see programmatic marketing referred to as programmatic advertising, programmatic media
Native ads and programmatic marketing – a perfect fit
Mobile devices are an integral part of everyday life. And most brands realize this, creating sites and content that are responsive, displaying beautifully across any screen. Online advertising though hasn’t progressed as much, though. It’s still very common to see traditional banners or popup ads and they simply don’t fit in with the surrounding content when you see them on a mobile device.
They’re ugly. They’re obtrusive. But native programmatic ads fit right in. Google gives a couple of highly successful examples of companies transitioning to native programmatic ads. One being The New York Times, which seen 6x the number of CTR and 4x viewable impressions after they made the change.
How does programmatic advertising work?
So how does it actually work? When someone lands on a site, there’s a lot happening in the blink of an eye. In mere fractions of a second, information about that user is gathered (if available) and sent to different advertisers to see if this user fits their predefined target audience. If so, the bidding begins automatically and the winner’s ad is shown on the site for the lowest price possible. This all happens automatically and within 200 milliseconds.
Why should you consider using it?
You can dramatically increase your ability to zoom in and precisely choose who your ad is shown to and when. The algorithms that take place in that fraction of a second will evaluate many different data points and information from cookies to determine if any given user is a match to your target audience. It will also look at the bidding price and what the odds are of that user converting.
And any good platform will also look at any possible fraud and the odds of your ad actually being seen. Fine tuning when your ads show and optimizing the price you pay. In fact, Performics increased conversion for clients who switched from Google AdWords to using programmatic marketing by nearly 400% and impressions by over 550%.
Why some brands are still hesitant
At one time, many of the sites that provided ad space for programmatic advertising weren’t very admirable. So many marketers and brands are hesitant to jump on board. Who wants their ad to show up on shady or questionable sites? Or to only be displayed in less than desirable ad space position?
But the truth is that there are plenty of high quality sites and ad space that can be found in premium (usually private) exchanges. And even getting your ads on sites that aren’t the cream of the crop, in terms of quality, can be a big advantage. Why? You can obtain data about your audience that’s extremely valuable. You can learn about sites they frequently visit that you may have never thought of before, too.
And what’s better… your ad being served on the biggest, most established sites and being shown to people with no interest in what you have to offer? Or being displayed on lesser-known sites to a targeted audience that’s very likely to be interested in what you have to offer?
The potential pitfalls you should know about
Native programmatic advertising is almost certainly going to see astounding growth in the coming years, and for good reason. But it’s not perfect and if you’re considering jumping in, there are some things that you should know about. The potential for fraud is there, but it’s not just bots, which is probably what came to mind when I said that. Ad fraud can be both intentional and unintentional.
Sure, bots are definitely a big part of intentional fraud, normally used to create fake page views. In some cases, they can even generate fake clicks or form submissions… leading the advertiser to believe they’re getting conversions from their ads when in fact they aren’t. Bot can be simple scripts that are easily identified if you take the time to look through logs. Or they can be highly sophisticated, drastically reducing their footprint and making them very hard to find.
But there are other forms of fraud that can be even harder to find, which Ratko Vidakovic covers in depth at Marketing Land. These include:
- Invisible ads – impression stacking, ad stacking and invisible iFrames
- Arbitrage – Publishers buying shady traffic to their site for less than what advertisers pay them by CPM, therefore making a profit at the advertiser’s cost
- Domain spoofing – Advertisers are misled as to where their ads are actually going to show up
- Site bundling – Again, ads end up displayed on sites the advertiser didn’t intend them to
- Ad injection – Ads are replaced or injected into any site due to browser addons and plugins (publisher may not even know this is happening since it’s the end user’s browser doing it)
- Cookie stuffing – Easily misrepresent or dilute visitor data
- Get paid to click – Many sites out there pay users to click on links, watch videos or fill out forms… pretty much completely making those impressions, CTR and actions the advertiser pays for meaningless
How to avoid click fraud
Programmatic advertising has leveled the playing field in many aspects, meaning even small businesses can play with the big dogs and advertise on sites that they traditionally wouldn’t have the budget for. So how do you take advantage of this and still steer clear of click fraud?
Look before you leap
Don’t go with just any programmatic platform. Find out who they are, how long they’ve been in business and if possible, clients they’ve worked with. Dig in and read the fine print – learn exactly how they work. Find out what they do to prevent fraudulent clicks and what they’re reimbursement policy is if click fraud is detected. If anything seems odd or too good to be true, it’s probably not a good idea to sign up.
You should also look for a platform that buys directly from the publisher. In many cases, they’re buying from publishers who are buying from other publishers. With each new man-in-the-middle, the risk for fraud increases… not to mention the cost probably does too.
Ask to see their block list
A good DSP (demand side platform) should have a regularly updated block list. Additionally, some will even allow you to add in your own block list or the ability to bid less for sites you don’t find as valuable.
Do additional tracking
Setup your own tracking or use those of a third party. Either way, it’s always a good idea to not rely 100% on the platform’s tracking. There are highly reputable performance tracking companies that might have advanced technology for detecting fraud that you don’t. But remember that your tracking (or the 3rd party you hire) and the DSP’s will rarely line up side by side, absolutely the same… and that’s to be expected. But if you see big differences then it’s definitely worth the time to look into it further.
Request and scour the data
With programmatic marketing, your DSP can’t guarantee you’ll get X amount of impressions on specific sites since bidding is done in real-time for each visitor. But what they can do is provide detailed reports to you of where your ads have already been shown. Scouring these reports is important for identifying sites with less than stellar results. It’s important for uncovering too-good-to-be-true stats and detecting any possible click fraud.
Even better if you have your own login to access this data at any time you want and able to view it in real time as ads are shown. Again, this might be another good reason to use a 3rd party, since they can be a neutral, objective view of things if discrepancies arise.
Programmatic marketing can increase your ROI and help you better reach your target audience. But everything comes with some sort of risk. It’s being proactive and planning ahead that will keep your business moving forward. But of course, nothing is a one size fits all in the world of marketing.
Have you already jumped in with programmatic marketing? Still on the fence or is it something you’ll be steering clear of in the foreseeable future? Do you have any tips someone considering using a DSP or a horror story to learn from?