Programmatic Advertising has grown significantly in use over the past 12 months. In the UK last year roughly half of online ads were traded programmatically
Which amounted for £960m in ad revenue terms, up 28% on 2013 figures. However, issues of cost transparency, low viewability and ad blocking software have led to serious questions being raised. Adforum estimated that only 55% of ads were seen by real people, with bots, scrapers and malpractise to blame. But what is Programmatic, how does it work and, most importantly, is it right for your business?
At its simplest, Programmatic Advertising uses data from cookies to find audiences and then delivers ads to them. So rather than serve ads to people based upon the context of the site they’re visiting, it delivers ads based upon what’s known about the demographics or interests of the individual. The principle isn’t new and it’s been the basis of much CRM and the successful targeting of direct marketing for many years.
The argument in favour of Programmatic , is that it’s a more effective way to advertise because of how the data can be used to serve ads. After all, targeting ads based upon age, gender and interests sounds more appropriate than simply serving up ads based on the site they appear on. However, the reality isn’t that simple. It’s quite easy to miss the pitfalls of inappropriate ad placement when context is totally ignored. For example, serving travel ads on a news site next to a story on a natural disaster would probably be a mistake, but one that’s difficult to control if the automation of programmatic is allowed to take over completely.
But it stands to reason that totally ignoring context is a potential pitfall for ad placement. Especially when you consider the need and intent that is driving people online in the first place. For example, being in YouTube-browsing mood is likely to pre-dispose people to behave very differently to the way they do when going online to pay their car tax.
It seems that the future is about being more intelligent in how we use Programmatic. One of the ways to do that is to make use of your CRM data to recognise groups or sub-sets of people and treat them appropriately. For example, taking into account whether someone has recently bought your product online might be an important component in selecting a more intelligent and relevant brand message. Equally, being able to combine context and what we know about the person may take things a step further to being more relevant and appropriate in ad message and call to action.
I’m certain that the future will include more intelligent targeting methodologies but part of that intelligent approach will be about how we control and manage the automation to extract insights from the data we use. A big part of this may be the combining of further data or insight sources to supplement what cookies tell us, with our own knowledge into people and their needs, interests and desires.
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