The evolution taken in place in digital marketing over the last decade is amazing.
We’ve gone from horrendous keyword stuffing and “spray and pray” campaigns to incredibly smart and efficient strategies that maximize ROI.
This evolution has largely been fueled by data and predictive analytics.
And what I love is the power that small-scale marketers now have.
The tyranny of traditional gatekeepers in marketing has been drastically diminished, which to me is a beautiful thing.
You don’t have to have a massive marketing budget to get results anymore.
It’s more about being savvy and staying ahead of the game.
One particular technique beginning to pick up steam is programmatic marketing.
If you’ve never heard of it, it can seem a little complicated at first—especially when you examine it on a granular level.
But when you look at the big picture, it’s pretty straightforward.
In this post, I’m going to explain the fundamentals of programmatic marketing, its outlook over the next few years, best practices and how to get started.
Let’s start from the top.
What is programmatic marketing?
State of Digital offers a basic explanation:
Programmatic marketing is a way to target what types of audience you wish to show your advertising to. Which can encompass segments across demographics such as age, gender, social standing, to geographic in certain areas of the country.
Here’s another definition of it from Kenneth Kulbok of LinkedIn:
At its core, programmatic marketing involves advertisers competing in an automated, real-time auction, where the highest bidder wins the impression.
From there, the visitor will see an ad from the winning advertiser.
Everything happens within milliseconds, so there’s no lag or disruption in the user experience.
It’s all seamless.
If you’re still a little unclear, this graphic breaks the process down step by step:
As you can see, it’s very streamlined.
Rather than relying upon humans to manually complete the process, programmatic marketing uses an algorithm to handle it automatically.
An example
I find having a concrete example to look at helps me connect the dots and fully grasp a concept.
So, here you go.
Here’s an example provided by Decisive, which involves Words with Friends, a word game:
In this case, Words with Friends is the publisher.
Words with Friends gives its ad inventory to an ad exchange.
The ad exchange then has an auction, where advertisers get information about a person using Words with Friends, which is called a bid request.
This information could include their IP address, operating system, type of device and so on.
From there, advertisers examine the bid request and send in their bid price.
Once the ad exchange gets in all the bids, the highest bidder is the winner, and their ad is shown to the user.
The amazing thing is it all takes place in milliseconds.
Within an instant, the user is shown a highly relevant ad from the winning bidder.
The benefits
Besides the inherent efficiency, the primary advantage of programmatic marketing is the quality of leads it generates.
The extent to which you can target your ads is pretty amazing.
An algorithm examines a vast amount of data to instantly identify visitors that match your demographic.
As I mentioned earlier, this technology can look at factors like age, gender, geographical location, etc. as well as the context of the website being viewed to find highly-qualified visitors.
That way you know for a fact your leads are highly qualified.
As State of Digital also points out,
you are only paying for highly effective ads, delivered to the right people at the right time.
You also have plenty of control over your budget and can have your ads featured across several different publishers with a high degree of flexibility.
This means you have way more opportunities to reach your demographic with this method than with a more conventional, like a traditional PPC platform, method.
The bottom line is:
- programmatic marketing is quick and efficient;
- it allows you to get your ads in front of a highly targeted audience;
- it offers a lot of flexibility.
Projected growth
Now, you’re probably thinking that programmatic marketing seems legit enough.
But is it really a viable marketing technique that’s here for the long run?
Or is it just some fad that will quickly fade away?
Well, there’s a solid body of data that suggests it’s here to stay.
For starters, here’s the rise in interest in programmatic marketing between 2012 and 2016, according to Google Trends:
There’s no denying interest has grown considerably.
Here’s a chart that shows how programmatic spending has risen over the past six years:
As you can see, there has been a dramatic rise in spending.
According to MAGNA GLOBAL,
programmatic marketing is experiencing an average annual growth rate of 31%.
They even predict that ad spend will reach $37 billion by 2019.
Clearly, programmatic marketing is growing by leaps and bounds.
The US in particular is spending money like crazy.
Just look at how the US compares with other countries:
It’s safe to say this is something that digital marketers will want to know more about and at least consider implementing and experimenting with.
Best practices
Let’s say you’re interested and are looking to get your feet wet.
What are some of the most important things to keep in mind?
The way I look at it, there are four key factors you’ll want to pay attention to.
Factor #1: ROI
First, you need to have a clear understanding of how much you’re willing to pay in order to get your ads in front of visitors.
Your ROI isn’t something to be taken lightly.
Set some specific ROI goals to ensure you’re spending wisely and getting the most bang for your buck.
Factor #2: Data
Data is vital to making programmatic marketing work.
The more data you have at your disposal and the smarter it is, the better the likelihood of success.
Use your existing customer data to gain a thorough understanding of how to best reach your demographic.
This should enable you to approach your campaign with greater confidence and minimize waste spending.
It will also help ensure that only highly qualified leads are seeing your ads.
In other words, you won’t waste money on crappy leads unlikely to buy.
Factor #3: Mobile
It’s safe to say that having mobile-friendly ad content is a big deal.
Just look at data from a recent Hootsuite study:
Considering nearly half of all Internet users are on mobile, make sure your ads are compatible with all screen sizes and devices.
Otherwise, it’s like flushing money down the toilet.
Factor #4: Preventing ad fraud
Finally, you’ll want to understand the dangers of ad fraud.
Not to freak you out, but there are definitely cases where ad buyers were left with bogus impressions and visits.
Make sure you don’t become a victim.
The best way to do this is to check out how an ad exchange buys ad inventory and the types of vendors they work with.
If they partner with any questionable vendors, this should be a red flag.
I also suggest you inquire about the policies they have to prevent ad fraud from taking place.
I would imagine programmatic marketing will become more and more regulated over time, but you’ll want to take proper precaution to prevent ad fraud.
For in-depth information on this topic, I recommend checking out The Programmatic Marketing Guide from Smart Insights.
It covers everything from developing a strategy to understanding the criteria for choosing a platform.
Ad exchange platforms
By this point, you’re probably wondering about actual providers.
What are some ad exchange platforms you can use for your programmatic marketing campaign?
There are numerous platforms on the market, but I suggest these three:
- Acuity – You can check out their demo here
- DataXu – They offer in-house programmatic ad buying
- Bench – This allows you to create actionable personas and audience groups
Conclusion
As technology continues to advance, digital marketing becomes increasingly sophisticated.
To me, programmatic marketing is the natural next step in the evolution of digital marketing.
It’s extremely cutting-edge and is the perfect way to use big data to your advantage.
This way you can do more with your marketing budget and ensure your ads are being shown only to highly qualified leads.
I also love it because your ads can be distributed across a variety of platforms.
You’re not limited to a single network such as Google AdWords or Facebook Ads.
It still remains to be seen what the full impact of programmatic marketing will be.
But it looks very promising and could be a real game-changer in the digital marketing realm.
Have you ever experimented with programmatic marketing?