There has been a major shift in the way that digital media is bought and sold, which has opened up a lot of new digital targeting opportunities for marketers. While programmatic is not new technology, a lot of people are not aware of what it is and how they can use it. A Pulse Study found that ⅓ of Fortune 500 brands are not using any programmatic techniques. Of those that are using programmatic, ¼ of feel they need more education on how to use programmatic techniques.
What is Programmatic Media Buying and how it is different?
- Programmatic helps us buy media faster and more efficiently by taking humans out of the equation at certain points. It also opens the doors to more robust targeting.
- DoubleClick Bid Manager, Turn and MediaMath are some of the automated systems that have made programmatic media buying easier.
What is Real-Time Bidding?
- Real-Time Bidding is the buying and selling of ad inventory in real-time auctions. This means the ad is actually purchased at the moment the user is seeing it.
- RTB is an ad space for marketers and doesn’t require human media buyers.
How does RTB and Programmatic add value to our world?
- Programmatic is here and it’s here to stay. It not only has become a staple of modern media buying but is slated to account for 50% of digital ad sales.
- It is the future of media buying for digital, but also TV, display, video, broadcast radio and publications.
- RTB and programmatic allows us to deliver the right ad to the right people at the right time.
- This new technology enables optimizations because we can see rich data of ad performance and can know which targeting methods are working.
How does programmatic fit into Iterative Marketing?
- Programmatic gives us the means to get the right message, to the right person, at the right time — which is a key component of Iterative Marketing.
- Reference: Programmatic Storytelling: How Programmatic is Evolving Traditional Branding
How do I get started?
- The first thing is to find a DSP partner — SiteScout, ExactDrive or BlueAgile — that will allow you to get your toes wet – preferably one that allows you to start small.
- For other references, check out: Real-Time Bidding, Private RTB and Programmatic Direct and why marketers should adopt programmatic marketing.
Charity of the Week:
We hope you want to join us on our journey. Find us on IterativeMarketing.net, the hub for the methodology and community. Email us at [email protected], follow us on twitter at @iter8ive or join The Iterative Marketing Community LinkedIn group.
The Iterative Marketing Podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste.
Onward and upward!
Steve Robinson: Hello, Iterative Marketers! Welcome to the Iterative Marketing Podcast, where each week, we give marketers and entrepreneurs actionable ideas, techniques and examples to improve your marketing results. If you want notes and links to the resources discussed on the show, sign up to get them emailed to you each week at iterativemarketing.net. There, you’ll also find the Iterative Marketing blog and our community LinkedIn group, where you can share ideas and ask questions of your fellow Iterative Marketers. Now, let’s dive into the show.
Hello everyone, and welcome to the Iterative Marketing podcast. I’m your host, Steve Robinson. And with me, as always, is the perceptive and observant, Elizabeth Earin. How are you doing today, Elizabeth?
Elizabeth Earin: I am good, Steve. How are you?
Steve Robinson: I am doing well. I am recovering from foibles as a handyman.
Elizabeth Earin: Oh! we have gotten handyman stories before. What happened this time?
Steve Robinson: Well, we were out at Lowe’s and Kim said to me — my wife, Kim, said to me, “Hey, why don’t we get ceiling fans for the kids’ bedrooms?” I said, “It’s a great idea.” So we picked up some ceiling fans and took them back to the house and I took down the light fixture that was there and saw a 1920s electrical connection that I had never seen before in my life and went, yeah, this does not go with that, does it? And the journey begins there. So I am not going to get in the details. We have more important things to talk about today and so I guess that’s a good segue to what are we talking about today?
Elizabeth Earin: That is a great segue. Today, we are talking about programmatic media.
Steve Robinson: Excellent. And why is this an important topic?
Elizabeth Earin: It’s an important topic because it’s something that modern marketers are dealing with and we are seeing over and over again that there are a lot of people who are unaware that there’s been a major shift in how much of digital media is bought and sold today.
Steve Robinson: And it’s interesting because you mentioned that a lot of marketers are unaware of this. We looked for some stats to find out exactly how many marketers were unaware of this before we went to go and record this and make that bold statement, and the stats were absolutely all over the place. It seems that everybody who reports on the adoption of programmatic media seems to come up with a different number, which leads me to believe that there’s probably some variants in what that word ‘adoption’ means, right? So I think there’s a lot of marketers that are playing with this or who have tried it, but not as many that are actively using it day-to-day. And I think that might be because it’s hard to get your head around exactly what this shift enables besides just cutting some people out of the equation.
Elizabeth Earin: I think that’s a great point and I think that kind of reinforces what we saw, our inability to find statistics that seem to agree with each other. We did notice that there was also
another common theme in that a lot of the people who are using programmatic feel like they don’t have a strong understanding of it. They don’t have a grasp on it and are interested in learning more. And so with those two scenarios in mind, we thought that today would be a great time to talk about programmatic. And so we are going to cover what programmatic is and what real-time bidding is and then we are going to get into what that means to us as marketers and how that fits into the Iterative Marketing methodology.
Steve Robinson: Excellent. And if you are an existing programmatic marketing geek and you understand all of the details of how this works, just know we are going to gloss over some stuff because we have to take a really big complicated thing and make it appear fairly straightforward and easy to understand.
Elizabeth Earin: But we do have some great resources at the end of the podcast and that we’ll share in the show notes, so if there’s anything that you feel like we didn’t go into enough depth, we do have some additional resources to refer you to.
Steve Robinson: So let’s start with defining what programmatic media is. When you look at it, it’s basically taking humans out of the equation, right?
Elizabeth Earin: If you go online, you can find a lot of different definitions and they kind of all vary. And when we were even looking at them, a lot of them have business speak and we decided that makes it a little too complicated. And I love how you have distilled this down and made this–really taking out all of that extra stuff and made it so simple to understand.
Steve Robinson: It’s taking the humans out of the equation in certain points and inserting computers that really enable us to buy media faster and easier, optimize media automatically and place media without a lot of human interaction and opportunity for error. It also opens the door to some more robust or advanced targeting that we weren’t able to do in the past because every time you would change how something was targeted you had to have a human involved and it took time.
Elizabeth Earin: So before we get into exactly how programmatic works, do we want to quickly talk about how digital media has sort of changed? How purchasing digital media has changed?
Steve Robinson: Yeah. For those of you who maybe media-buying has never been part of your job but you need to understand this enough to understand how it works, let’s talk about how digital media used to be bought because it was bought in exactly the same way that traditional media was bought. And so you would have — the media buyer would put out an RFP, the publisher would say, hey, we have this much inventory at these rates, do you want to buy it? And then the two would negotiate on exactly what the terms of the agreement were and then you would buy a chunk of impressions. And you were guaranteed the impressions that you bought and at that point now you had to come up with an insertion order that would include all of the details of exactly how you are going to put that media online and then deliver the creative files and flow through all the way to media being placed. All of this was back and forth between a media buyer and a rep at the publisher going back and forth on the opportunities, on the terms, on the creative, on the insertion order and then on the data and it was all a very human driven process. The big difference with programmatic is we automate a lot of that.
Elizabeth Earin: So on the programmatic side, the media buyer, which is either the agency or in some cases even the brand directly, they place an order online using a tool called the Demand Side Platform or DSP and you have probably heard of some of these before. DoubleClick Bid Manager is one, MediaMath, Rocket Fuel, Turn, SiteScout is another one. And so depending on the type of the order, the media gets locked in or guaranteed within that publisher system and then goes out onto the public exchange as a bid and it’s a lot like probably equating it to eBay.
Steve Robinson: Yeah, yeah. I mean it generally is run using something called real-time bidding which is basically an eBay for ad space, only you usually aren’t going on there and bidding on things one at a time necessarily. So if you think about it, if you were to visit huffingtonpost.com for example, as you are browsing huffingtonpost.com, there are ads that appear on the screen. Some of those ads were bought well in advance using the traditional methods, where a media buyer and an ad rep got together and negotiated a buy. But some of those ads, Huffington Post doesn’t know what ad is going in that slot until you see it. And that’s called real-time buying, where the ad is actually purchased at the moment that the user is sitting in front of that website. And the way this happens is that, instead of the ad itself being delivered to the screen, instead, a little snippet of script is delivered to the screen and that script goes out and announces to the world, hey, I got an ad impression, right? And when they announce that to the world, they are putting it on what’s called an ad exchange. An ad exchange is just like a stock exchange, only instead of people being able to buy and sell stocks, you have people being able to buy and sell individual ad impressions. What happens then is that the advertiser then has the opportunity to bid on that impression that this person reading Huffington Post just created because they happen to be looking at the article. What’s cool is that script that went out and announced the fact that you had this impression available didn’t just announce that this impression is available. It also threw a whole bunch of other data out there along with that about everything that it knew about the user on the other side of this available impression. So that includes things like age and gender, income, job title, all kinds of creepy data, right? This gives us as advertisers the chance to pick and choose which impressions we want to bid on and then if we choose to bid on it and we have the highest bid, then immediately the creative gets pushed out to the script that announced to the world that the impression was available and boom, an ad shows up on the screen. And all of this happens in like milliseconds and it’s insane to think about the complexity and how fast it all occurs, but phenomenally powerful to us as marketers.
Elizabeth Earin: Well, yeah, you say it’s insane to think about the complexity but it’s, in my mind, working more on the account side and less on the technical side, it’s insane to me what doors this opens up to us in terms of targeting methods. And we are going to get into that a little bit later. Is there anything else that we need to know about real-time bidding and its tie to programmatic?
Steve Robinson: Yeah. A lot of people will confuse the terms real-time bidding and programmatic. They aren’t technically the same thing. So again, programmatic is just the act of replacing the people with the machines, right? That just says that we are going to automate the purchase, placement and optimization of media. It doesn’t mean that it’s necessarily in real time because there is a way of doing something called programmatic direct that we are not going to get into today, to kind of do it half and half, the old-school method where you are locking in that inventory, you are locking in those impressions that you bought, but then later you are going to use them as you see fit in a programmatic, automated way. There’s also another term that you might run across called a private exchange. And a private exchange is where the opportunity to bid on a particular ad is thrown out to a smaller group of people instead of being thrown out in the wild. Again, we are not going to get into that. We did kind of allude to them in Episode 17 where we went off on a rant about the haves and have-nots, definitely an entertaining episode to go back and listen to. You’ll get into a little bit of this there, but for the majority of you, this isn’t going to be your first foray into programmatic and you might not ever get to really play with programmatic direct or private exchanges unless you start moving a pretty high volume of advertising. And with that, I think it’s a great time for us to take a quick break and go help some people.
Elizabeth Earin: Before we continue, I’d like to take a quick moment to ask you Iterative Marketers a small but meaningful favor and ask that you give a few dollars to a charity that’s important to one of our own. This week’s charitable cause was sent in by Joe Kitzinger from K-Consult. Joe asks that you make a contribution to Saint Thomas More High School. Your donation will be invested in the school and continuing its legacy for future generations. Learn more at tmore.org or visit the link in the show notes. If you would like to submit your cause for consideration for our next podcast, please visit iterativemarketing.net/podcast and click the “Share a Cause” button. We love sharing causes that are important to you.
Steve Robinson: And we are back. So before the break, we got into the nitty-gritty of what programmatic and real-time bidding are, but we didn’t get into what this means to us as marketers. So Elizabeth, where should we start off on how this actually adds value to our world?
Elizabeth Earin: Well, I think it starts with understanding that programmatic is here and it has become a staple of how we are buying media in our modern world. Marketing Land had a great statistic out there in that programmatic is expected to account for 50% of digital ad sales by 2018 and it just keeps moving up and up and up as more people get involved and as more inventory becomes available. And so this is important to us as marketers because if this is something that you are not currently using, you need to at least understand it. And once you understand it, then you can start to decide is this something that fits into my overall strategy.
Steve Robinson: Yeah. And to your point that it just keeps gaining more and more momentum, it’s definitely the future of media buying and not just display media buying either. Because right now, you can buy display, you can also buy video inventory this way. So if you have video ads that you want to get out on the internet, you can buy it this way. But it’s not going to be limited there in the very near future. There is television that is being bought and sold programmatically. It’s not available mainstream yet, but you are going to see broadcast radio bought and sold this way. Even outdoor, they are working on trying to figure out how to sell outdoor in a programmatic way. So if you aren’t learning how this fits into your world today, you are going to not only be missing on opportunities today but in the future.
Elizabth Earin: Yeah. And I think talking about how it’s extending this into these other more traditional mediums, the reason that this is happening, it kind of supports one of the other reasons why, as marketers, we need to know what’s going on. And that’s that programmatic, real-time bidding allows us to focus on buying access to specific people. I shouldn’t say specific people but to people as opposed to just buying access to ad space. And so instead of saying I am going to purchase in this publication, we can instead pick a very targeted audience that we want to go after and make sure that we are delivering our ad directly to them.
Steve Robinson: And that comes from all of that rich creepy data that gets passed along with that opportunity for that ad in real-time. All of that flows back to the DSP, the system that you are placing the ad in, and those are all targeting levers that you get to use. And the cool thing is you are not just limited to placing it on one or two publications. Approximately 90% of the websites out of the net are selling ad space programmatically. So you can really cover almost all of the websites on the internet. And instead of setting up individual buys based on where you think your people are going to be, you don’t care about where the ads run, you just want to get them in front of the right people based on the creepy data that we know about them.
Elizabeth Earin: And again, that comes back to not having to pick publications. I remember years ago, you have so much media to spend and you are trying to make the best decision with this limited information or the fact sheet that you are getting from your print publication and this changes that game. That gives, in my opinion and I don’t know how you feel about this, but a little bit more power to us as marketers in terms of helping us to make sure that we are making the most of that budget that’s available to us. So instead of just picking publications, we actually get to pick the people that we want to advertise to. And this ties into Iterative Marketing and I am chomping at the bit to talk about it, but I know that’s how we are wrapping up the podcast, so I will refrain for this point in time.
Steve Robinson: I think another key area that programmatic impacts us as marketers is not just on the figuring out how and where we want to run our media and being able to target it but also on the optimization side. Because when we talk about real-time bidding, real-time bidding gives us a unique opportunity to do some very rapid optimization as well as insight gathering into our audiences. When we place media real-time bidding on a DSP, we can log into that DSP at any point in time and get rich data about how our ads are performing. We can see how many impressions we are getting, how many clicks we are getting, whether those impressions were viewable or not. We can see which creative, if we set up multiple sets of creative, is getting clicked on and how fast, all of it in real time. We can see which of our targeting mechanisms, which of those levers of creepy data that we have to target our media, which of those are most effective in getting those ads in front of our people. We can do all of this real-time. We can also make optimizations or changes real time and then those changes are impacted immediately. No waiting for the changes to go through the media buyer to the publication, for the publication to swap the creative, for the ads to start running again, for the feedback to come back through Google Analytics. It’s all immediate. And so if something isn’t working, we can pull it right away. If something is working, we can put up multiple versions of it and quickly iterate and improve upon it and that’s just phenomenal.
Elizabeth Earin: I think that’s really a great point and one of the big benefits of using programmatic but I think it’s important to note that, when we are talking about a lot of this, what we are talking about is direct response. And so when we start to try to apply brand advertising to — or programmatic to brand advertising, some of those things that make it such a strong tool for us don’t necessarily crossover on the brand side and that’s just — it has to do with how we optimize. We have got the leverage and the triggers to be able to optimize direct responses ads that we don’t have on brand advertising. That doesn’t mean that you can’t take lessons from direct response though. And we do this every single day with our clients, where we run an experiment with direct response and then based on what happens, we are then able to apply those optimizations and those insights over to our brand ads. So you still have the ability to use programmatic for your brand but you are not going to be able to optimize in the same way that you would a direct response program.
Steve Robinson: Definitely true. Another challenge with programmatic comes around budgeting. And we run into this every day, don’t we? When you go to place programmatic media, you can run some models beforehand to try and estimate exactly how much inventory there might be available out there for a particular audience that you are trying to target. You can run models on what the reach is going to be and what frequency you can target, but at the end of the day, that inventory can change overnight. And all of a sudden, you are looking at a situation where either you are not spending the money that you budgeted or you have opportunities to spend significantly more than the money that you budgeted. And managing that variation can be very challenging if you work inside of an environment where, no, no, no we allocate X we spend X. It doesn’t exactly work that way.
Elizabeth Earin: No. And this year — I know that every year there’s new factors that are out and about, but this year with the elections going on and getting a handle on viewable impressions and what’s going on on that front, we are seeing our numbers change across the board. And really, the key to that is, as I know when we work with our brands, with our clients, is help to educate and just make sure that everyone’s on the same page in terms of what the expectations are and that there’s a little bit of risk here, but at the same time, there are ways to manage that risk.
Steve Robinson: Absolutely. Unfortunately, programmatic has a couple of other warts as well. One of them being ad fraud. And you’ll see reports of this out in the media occasionally. And some of those reports are a little bit overblown because there’s a lot of established folks within the way that media buying has been going on saying that they want to protect their world as it sits right now. Some of them are not that overblown though. I mean, ad fraud is a reality and it’s significantly more rampant inside of programmatic media buying because it’s the computers making the decisions, not the humans. And so it’s really easy for a bad apple to get in there and suddenly make a bunch of impressions that never really happened show up and make some money off of that. The systems are getting better and better at protecting against that, but at the end of the day, it’s a reality of the platform.
Elizabeth Earin: I think another area that we want to make sure our listeners understand is that there’s also a brand safety and media quality component that ties to this. And so when you are looking at programmatic and your ad could appear on any site, you run that risk of your ad appearing on any site and maybe a site that isn’t necessarily aligned with your brand or with your brand values. And so making sure that you understand that risk and there are some tools and things that you can do to help to try that to minimize that risk but being aware that that is something that is a unique challenge when we are dealing with programmatic.
Steve Robinson: And so you have the content issue. You also have the quality of that site. Better quality sites put ads in places where people can actually see them. Some of the scuzzy, scummier sites out there put ads in places like the footer of the website. Well, that’s great except who scrolls down to the footer? So that lack of choice or being able to really direct your budget to the publications that you know and trust can be a factor in is this right for you, but at the end of the day, you also have that rapid measurement feedback to know whether or not it’s working for you. So it can be beneficial just as detrimental as it is. And you can find opportunities that you would never think of for a direct buy. Your ads can end up there through programmatic.
Elizabeth Earin: So I mentioned earlier I was excited to talk about this, but where does programmatic fit into Iterative Marketing?
Steve Robinson: The first place is obviously — and I have been hammering this the whole time. And that is in that feedback mechanism and the fact that you can do the rapid iteration right there on the platform. You have all of the data at your disposal and you can pull levers at the click of a hat in order to change and optimize and test. I think that’s the biggest thing. What about you?
Elizabeth Earin: Anyone who has listened to a few of our podcasts know kind of where my passion lies and what we talk about. But a major theme of Iterative Marketing is getting the right message to the right person at the right time and programmatic gives us the means to do that. And Dax Hamman wrote a really interesting article called Programmatic Storytelling. We’ll link to it in the show notes. And for me, this really helped to connect programmatic and Iterative Marketing together. And in the article, he discussed a lot of things, but he starts it out by comparing programmatic to Legos. And a lot of people are familiar with Legos. Either you have kids and you are stepping on them barefoot which is the worst thing in the world, or you played with them as a child. But alone, one Lego is nothing. It’s when you start putting them together that you have the ability to build whatever it is that you want and if you have an idea in mind, you know that you want to build this rocket ship, you start looking for those specific pieces that you need to make that concept, to make that idea come to fruition. And the same thing happens with programmatic. We can take the idea and we can take the goal and we can combine data and media and timing and the individual intent when we are talking about sort of that cross section between personas and customer journeys and we are able to build a program that balances our needs and helps to contribute to the overall objectives of the organization.
Steve Robinson: Yeah, I think that that’s a really great analogy and really how we, at Brilliant Metrics at least, approach programmatic and how we try to leverage it to take advantage of all of this complex targeting and access to a variety of different media to accomplish a higher level strategic goal. How would somebody get started with programmatic if they wanted to dabble in this?
Elizabeth Earin: So, when you are ready to get started with programmatic, the first thing to do is going to be picking a DSP partner to place your media and the trick is finding one that has a reasonable number or amount of minimum so you don’t have to play with a big portion of your budget. Sticking to some of our other Iterative Marketing principles, you want to start small and so finding a DSP partner that allows you to do that is the key. And there’s a few out there. Site Scout is a great place to sort of get your toes — dip your toes in the water in terms of programmatic. Bluagile is another one. We haven’t personally used that but we have heard it’s a good option for those brands that are just wanting to get started. And I think a third option is Exact Drive, which also has low minimums and gives you another alternative that has a little bit more hands-on or hand-holding approach than maybe some of the other options out there.
Steve Robinson: And then we’ll also turn you onto a couple of resources that we have run across that seem to do a good job of explaining this in more detail than we have today because otherwise this would have been an hour and a half long podcast, and well, that’s not what you signed up for. So we will link to those in the show notes as well. And as always, you are welcome to shout out some feedback, ask us some questions at [email protected] if there’s anything you’d like further explained in a future episode. And in the meantime, I want to thank everybody for making time for us today again. And until next week, onward and upward!
Elizabeth Earin: If you haven’t already, be sure to subscribe to the podcast on YouTube on your favorite podcast directory. If you want notes and links to resources discussed on the show, sign up to get them emailed to you each week at iterativemarketing.net. There, you’ll also find the Iterative Marketing blog and our community LinkedIn group, where you can share ideas and ask questions of your fellow Iterative Marketers. You can also follow us on Twitter. Our username is @iter8ive or email us at [email protected]
The Iterative Marketing Podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste. Our producer is Heather Ohlman with transcription assistance from Emily Bechtel. Our music is by SeaStock Audio, Music Production and Sound Design. You can check them out at seastockaudio.com. We will see you next week. Until then, onward and upward!