Programmatic media is a scary-looking term, and many explanations of it also lean toward the daunting. This guide is designed for business owners, CMOs, CEOs and marketers, among others, and aims to explain programmatic media in five steps so that you can choose your programmatic media partner.
1. The Complexity of Programmatic Media Buying
Programmatic media buying is an automated process that requires extensive data engineering and research. Plus, many types of businesses are involved in the process. The steps can take some time for even the savviest marketer to wrap his head around. A lot happens in what amounts to the blink of an eye. For example, this is what happens only at the end:
- Sally is looking for something to wear to a wedding in August. She finds a blog on the latest summer wedding-wear styles.
- As the blog page loads, several buyers can submit bids in hopes of winning ad space for Sally’s viewing. They use her browsing history (and maybe other factors) to decide whether to bid and how much. Interested buyers turn in a bid, and the chosen bid results in an ad.
- The process is automated, and Sally experiences no lag time or interruption of service.
Many advantages of such advertising are immediately obvious. For instance, ads are more tailored to potential customers, and thus, conversion rates should be higher. The potential for vertical and lateral targeting is present and with optimization, the campaign demographics can be changed quickly.
2. Jargon Demystified
Jargon gets in the way when people try to grasp a concept, so it’s time to clarify a few important programmatic media terms.
Publisher: The company that is paying for targeted ad impressions based on factors such as mobile user location or browsing history.
Ad exchange: The virtual marketplace where automated bidding occurs.
Ad servers: Web servers that track ads.
Agency trading desk: The human component behind demand-side platforms. They work to improve ad performance and effectiveness for their clients.
Demand-side platform: An efficient, automated method for buying ads. In milliseconds, DSPs can analyze multiple ad exchanges and bid.
Supply-side platform: Involves publishers selling and managing inventory.
3. What to Look for in Your Programmatic Media Partner and Why It Is Important
A programmatic media partner is often a marketing agency. Before you know what to look for in a partner, you must decide how you will measure success (leads or conversions, for example) so you can best evaluate the effectiveness of the campaign and make changes.
Questions you can ask potential partners center on:
- Guaranteeing transparency (see step 5).
- What factors go into bid price.
- Whether fixed-price models are used.
- Knowledge of consumers.
- How the partner makes money.
If you are new to this side of marketing, it may be a good idea to get recommendations from businesses that have been doing programmatic marketing or to check in with your current marketing agency.
4. Budgeting to Get the Most Bang for Your Buck
One potential disadvantage of programmatic media is the $3,000 to $5,000 per month that many ad campaigns require. The cost adds up due to factors such as fees, data management, and paying for traders and engineers. As companies budget for programmatic media, they should:
- Check that they understand the fees breakdown and that potential partners are transparent (see step 5); for example, many businesses are unaware that agency trading desks get involved in their process.
- Consider going with a marketing agency that bundles or offers other services such as campaign creation and content marketing.
- Review costs at least once a year, and switch partners when necessary.
- Evaluate possible future needs (for example, video or TV ads).
5. Beware of “Transparency”
Many larger outlets are not as transparent as they should be in their offerings and when outlining how and where your campaign runs. Sometimes, they are so large that individual staffers don't know what is what. There may also be conflicts of interest; if an agency can make more money with one business than with another, it may direct more efforts toward the first business. Sometimes, agencies may even serve their own interests. An agency trading desk may be both seller and buyer.
Many players are involved in programmatic media. There is the brand, its marketing agency, the marketing agency’s demand-side platform, the ad exchanges, the publishers and possibly others. Each needs something from the company above it but may not necessarily know what is going on two or three hierarchies above.
Also, some publishers may work to get fake traffic, and some of the outlets involved might be aware of the problem but ignore it. Similarly, some outlets do not perform their due diligence in checking for fraud.
Programmatic media is heavily data-driven and involves many entities. It's also automated and tends to be efficient compared with manual orders and negotiating. There is, however, potential for fraud and unwise spending, which makes understanding how it works essential.
For more information on programmatic media or to take advantage of 97 Degrees West's in-house programmatic media capabilities simply contact us. You'll get more media for your spend by eliminating the middleman and going direct with 97 Degrees West.