Programmatic media leverages data and technology to allow advertisers to identify the exact person they are interested in reaching and serves that user a specific ad as they visit various websites. Tzeitel Haviland dives deeper into the workings of programmatic media, walking us through its evolution and what marketers should consider when developing a programmatic media strategy.
Matthew Cummings: I want to start with a pretty basic question. It's basic to you, but I think it's something that a number of listeners out there may be wondering. Just what is programmatic media buying, and why are marketers finding this so valuable?
Tzeitel Haviland: So at its core, programmatic is the use of technology to buy and sell digital advertising. It's pretty simple when you think about it. It takes out the human element, which is sort of sad, but there are still many humans still involved with it, but it basically leverages technology and data, which at this point in the digital ecosystem, data has really become our currency. There's a lot of websites out there. People don't necessarily have to pay for them, but what they're exchanging is their data for the use of these open platforms.
So programmatic really takes into account some really heavy lift of the technology side and marrying that with data components too, as you mentioned in your opening, it really enables marketers to purchase digital media down to the exact person. We're able to identify specific computers on the web and deliver a very specific message. It can be down to geography. It could be based on demographics. It could be based on dayparting with a lot of different approaches. But at its core, it's basically the marriage of technology and data.
Matthew Cummings: And it sounds like that improves relevance on the consumer side. Obviously, you're going to be served ads that are more relevant to your user profile, and it also presents a lot of exciting possibilities for marketers as well. Really, as I thought about this topic, it addresses a number of the concerns that marketers have had over the years, right? Everybody says, "I know that marketing works, but I don't know what is working." So this really has addressed a lot of those fears in terms of targeting and attribution. So how has programmatic media evolved since its inception?
Tzeitel Haviland: So it definitely takes out of what we call, at the advertising business what you would call waste. So you buy a lot of television and you knew that you were getting a fair amount of your target, but I don't know exactly how many and I don't know how many others I'm getting that I don't want. So the programmatic element is really to your point, that one to one.
It's evolved so significantly since its inception. Programmatic was actually born out of a necessity to automate some of the things that were going on within digital because it took such a heavy lift from the human element. There were so many more that were coming out at the time and there was a lot of inventory that publishers had that was real estate that they could monetize. So this desire to monetize it also came with the fact that I would have to pay a salesperson. Then I would have to pay marketers on their site. I'd have to pay for an agency. Or I have to okay for more bodies to be able to do this. So it was born out of necessity like many many inventions.
Really at its start, programmatic started as if publishers had relevant inventory that tended to go unsold, they would bring it to the programmatic platforms that were starting to crop up. The really interesting thing about programmatic is it was actually leveraged from financial trading technology if you think about it that way because it's all based on bidding. If you were buying and selling on wall street, you would be using a specific type of technology. That's where the central of programmatic started. The marketing and advertising industry embraced that, started to monetize it on the advertising side.
So publishers would bring up their inventory and say, "Can you please sell this to someone?" It started with just display banners and here and there, and that started to grow. Marketers started to see a lot of value in it, and it expanded to other formats including video. Now we're in the age where almost all digital display is sold on a programmatic basis. Native advertising is exploding. There's a lot of opportunities for the modular type of natives where it builds assets to fit the surrounding content. So it's really become very fruitful on everyone's part.
In addition to what has been able to grow from a format perspective, it's also grown from an industry perspective. Years ago when this technology didn't exist, we didn't have a need to data providers or ad tech stacks like the things that Oracle brings to the table. It didn't exist. We didn't need it on a day to day basis, and now there are multibillion-dollar industries that really keep the advertising business humming.
Matthew Cummings: What do marketers need to consider or evaluate when they're developing their programmatic media approach? How do you begin?
Tzeitel Haviland: The first thing I tell everyone is to have a goal. What do you want to try and do? It enables marketers to execute a number of different types of goals. It can include retention. So do I want to retarget someone? Do I want a prospect? Do I need to look at alike targeting? If I know who my consumers are, can I take the data that I have from them, and build the same type of consumer out of new people? Can I do creative testing? So what are the goals? That's the first thing. You have that very clearly states.
Also, how are you going to measure steps? Are you going to measure it based on sales? Are you measuring it based on ... one of the more antiquated ways is through a click-through rate or am I going to measure it for branding? If there's a video component are we going to look at completion rates? What is my KPI? So what are the key performance indicators that I have to have within my measurement plan, or really one of the key areas?
Then really the crux of any good programmatic strategy is to have a solid data strategy. So what am I going to do with the data? How am I going to utilize it? Where am I getting it from? Is it my own? Who am I going to work with? Am I going to pay somebody to use their data? If I am, which one? Do I have specific needs? Because all the different data partners, while they are very similar because they're looking at all the people out on the web, a lot of them aggregate very specific types of data.
So things like Nielsen. They'd be better on people who purchase products from the grocery store. Or Axiom, or like I mentioned Oracle. They may have specialties. They might be looking for higher-end consumers. Maybe a data partner who specializes in that. If you're trying to market a sports car.
This podcast originally aired June 6, 2018.
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