Modern times demand that marketers consider and optimise the entire communications system in order to produce true behaviour change and positive business outcomes. Long-term productivity can only be enhanced with a clear understanding of how channels and content must be partnered to ensure the best, most relevant content is optimally distributed (across TV, PR, desktop, radio, events, partnerships, branded content, social, search, mobile and new technologies) to ensure there are no dead ends or waste.
The combination of real-time technology and a more holistic understanding of an individual user that lies at the heart of today’s programmatic advertising technology offers a huge leap forward in our ability to make this happen.
2005 - Programmatic Advertising 1.0: Retargeting interested consumers.
Retargeting enables us to re-engage consumers who have shown an interest in a product or service but have not made the purchase. Targeting data profiles are collected by placing pixels on a website along the path to conversion. These are used to generate thousands of customised offers based on the last products the consumer viewed. The main requirement for media buyers is to access as many internet users as possible. Real-time bidding on open exchanges is efficient, and the quality of the placement is secondary to the opportunity to finding precisely the right user profiles.
2008 - Programmatic Advertising 2.0: Buying new audiences.
While retargeting focuses on the very end of the purchase funnel, audience buying is about the upper funnel: that is, reaching consumers who have not yet engaged with an advertiser. Programmatic products such as Xaxis, Quantcast and Rocketfuel collect a vast amount of anonymous consumer data to build targeting profiles that enable marketers to reach the most ideal consumer segments, rather than focusing ad buys on particular editorial environments.
2015 - Programmatic Advertising 3.0: Consumer-Centric Advertising.
The success of both retargeting and audience buying has convinced many advertisers of the value that programmatic advertising can deliver, and not just at the top and bottom of the purchase funnel. Today, a consumer-centric view brings site visitor segmentation, CRM and sales data into a single user profile, which can then be enriched with additional intelligence collected from third parties. Those profiles are often applied to a more selective media buying process, taking into account inventory quality—including factors such as brand safety and viewability—which provides a more qualitative publisher selection. Access to publisher inventory is then provided via private marketplace deals (PMDs) that combine the benefits of direct negotiation (more control of how and where the campaign runs, access to quality inventory/premium ad formats and negotiated pricing) with the benefits of data-driven selection of impressions in real time.
Success in this third era of programmatic advertising requires a radical change to any traditional media planning approach. Normally, media planners allocate budgets to online and offline impressions based on affinity, reach or historical performance.
The new consumer-centric advertising model reverses this process and begins with the consumer; profiles are built from all available data sources, and—when a demand side platform (DSP) sees a consumer profile—algorithms evaluate exactly where that single profile is on the path to purchase and therefore the value of that profile and the related price boundaries on an impression.
To make that calculation, consumer profile data is combined with additional data to address the following requirements:
- Right context: What is the content of the page based on the publisher content classification, semantic content classification tools or handpicked selection?
- Right quality: Based on blacklists, ad verification tools or site whitelists
- Right time: Analysing the day of week and time of day, in addition to the number of exposures already achieved (frequency) and the recently of the last exposure
- Right location: With more impressions being delivered on mobile devices, the exact location of a user may have a significant impact on his or her receptivity to a specific piece of content. Simple forms of location targeting may be city, postal code or even country in which a device is currently located
- Right price: A resulting ROI forecasting model then determines the value of delivering an ad to this user profile on any given site in real time, informing the bid price that ultimately leads to the potential purchase of an impression
Making this new model a reality requires attribution modelling that can assign a value to each touchpoint and running advertising that gets smarter and smarter, as it is always on and being constantly refined and improved. More traditional bursts of push communications can be added, but it’s the messaging foundation, driven by the above modelling, that delivers the true step change in business performance.
The last piece: customised messaging.
Such an approach is only effective if the message is customised to consumers and their needs at each point in the funnel, and even this is created in advance via multi-variant creative. The same data that informs the decision as to whether an ad impression should be bought on a specific site for a specific user can also inform dynamic creative optimisation that enables the automated assembly of ads that pull the ideal combination of copy, image, call to action and offer to produce exactly the right message at the right time and place.
Finding the right messaging strategy that can gently push the user down the path to purchase is one of the newest media tasks, but—when combined with a near-space-age ability to purchase the right impression at the right moment on the right site—programmatic gets us a whole lot closer to an end goal that may just free us up to think about what the next 'holy grail' of optimising content and connections for each consumer in real time looks like.
Oliver Gertz is managing director, interaction, EMEA, and Deirdre McGlashan is global chief digital officer, with MediaCom