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The Evolution of Programmatic Buying: Top Obstacles in Programmatic Advertising

In today’s day and age, it seems that programmatic advertising is everything. Despite being a relatively new tool for digital advertisers, it has increased in popularity rapidly due to the improved results advertisers can get from hyper targeting and modifying bids in real time without the need for manual involvement.

Despite the dependency on programmatic advertising, there is still a great deal of challenges that digital advertisers find themselves dealing with.

The Danger of Bots

One of the most notable obstacles that programmatic advertisers have to deal with is the presence of bots on the internet. It is believed that almost 50% of the web is comprised of bots, and an overwhelming majority of them are considered ‘bad bots’ that skew advertising results, impersonate humans and increase the prevalence of spam.

Viewability Fraud

One of the most common obstacles bots cause is in the viewability results displayed to digital advertisers. Ad Fraud, especially due to viewability issues, is such a concern that companies such as Google and AppNexus have premium services guaranteeing “fraud free” ads for advertisers. Despite this solution, the problem is still a difficult one for digital advertisers, especially those seeking non-traditional advertising ad networks to use for their campaigns.

Time to create creatives

An interesting obstacle that digital advertisers have had to deal with is the inability to make enough creative to test as quickly as programmatic tools can accept them. To combat this, many programmatic creative tools have been created, yet their use is one advertisers are slow to integrate into their workflow.

Ultimately, the biggest concern digital advertisers have to deal with is the lack of understanding of programmatic and the newness of the technology.

 

 

The Evolution of Programmatic buying: Understanding the Difference Between 1st, 2nd and 3rd Party Data

As a digital advertiser looking to improve campaigns and maximize effectiveness of ad networks, you probably spend a great deal of time utilizing DSP solutions to help you simplify the ad buying process.

Your DSP interacts with a DMP, which is just another acronym for a technological platform that aggregates all the data and tells your DSP which media buy is the best option.  What you may not know is what the difference between the 1st, 2nd and 3rd party data that your DMP presents, and how that impacts the effectiveness of your campaign.

Luckily we’re here for you!

The best way to think about the different data the DMP aggregates is by thinking of the game telephone (where one person says something and it is whispered throughout the ‘phone lines’ to see what you get at the end). The more you go down the line, the less reliable the information is.

First Party Data: This is the first person hearing the sentence on broken telephone. First party data is based on information taken directly from your site visitors and customers, conveyed through pixels, cookies etc. It is the most accurate and most powerful way to understand your client’s behavior.

Second Party Data:  This is the second person in line on the game of broken telephone; the information might be relevant, but it might be wrong.. Why? Because second party data is derived from the first party data of a similar company and the belief that their data is relevant to yours.

Third Party Data: This is everyone else in the game of broken telephone; they may know what’s going on, but chances are they are so far out there it will be ineffective to rely on it. Third party data is everything that isn’t first or second party data and, as one may assume, it is an overwhelming amount of information that may or may not be relevant for your brand.

What is the best data? Of course first party data is most accurate, but there are ways to utilize programmatic tools in order to cross reference 1st and 3rd party data and target your campaigns more effectively.

Want to read more about programmatic buying and understand the best way to maximize your digital advertising campaigns? Click here to read our eBook!

Understanding Programmatic Advertising

Technology is growing in a revolutionary rate. Advertising, in an effort to stay with the times, is similarly growing and transforming to fit the needs of our increasingly mobile and tech-based consumerist culture. In order to increase efficiency, one of the most revolutionary trends in advertising is automated, or programmatic, buying.

In a nutshell, programmatic advertising involves a software which optimizes ad bidding and hyper-targets consumer audiences so that your advertising reaches consumers most likely to respond to your brand. Programmatic advertising matters due to the efficiency of the approach; Advertisers no longer need human ad buyers and salespeople to contract an advertising deal. Instead, they can produce an advertising outreach in a fraction of the time with higher reliability due to algorithmic processing by programmatic buying software. This therefore allows for more sophisticated, customized campaigns marketed directly to a target audience, thus positively affecting ROI results as well.

The current conversations around programmatic advertising discuss the approach as the “future of ad buying.” Is it true? We believe so, yes. While it is impossible to tell the future, programmatic advertising has reaped such tangible results that more and more users look towards programmatic buying for their brand. Some brands have even built in-house teams to optimize their own use of programmatic advertising buys for their company as part of their marketing budgets. With social networks gaining presence in the lives of brand consumers, companies are turning to platforms such as Facebook, Twitter, Instagram and Twitter to sell ads across the web and beyond the limitations of their personal platforms, with programmatic decision-making software at the core of these advertising outreaches.

At the end of the day, programmatic advertising is good for viewability in that it effectively reaches target audiences through algorithmic means to bring in positive results for a brand.  While it is important to avoid fraud and URL masking, where a buyer has no idea where their ads will actually end up, done right programmatic advertising is one of the most revolutionary approaches for marketing and advertising in today’s world. Programmatic advertising is on the rise, and we certainly don’t expect it to slow down.

Programmatic Advertising and your Marketing Budget

Programmatic advertising is the fastest growing industry in marketing these days, with over two thirds of all display advertising spending being allocated to programmatic advertising technology.  This increased reliance on programmatic advertising is on an upwards climb (in fact, the 2016 spending estimate of $22.10 billion is a 39.7% increase from 2015!) and it doesn’t look like that is going to change anytime soon – so what does this mean for advertisers and marketers looking to plan ahead for 2017?

For starters, it means that companies that do not use programmatic advertising in order to optimize campaigns, improve ROI and hyper target potential customers will have to start using programmatic tools if they want to stay relevant in 2017.  With the world shifting towards programmatic advertising, companies that do not automate media buying will risk being left behind and having ineffective campaigns.

A rise in the use of programmatic advertising also means that even smaller companies without big advertising teams can now compete with the big brands thanks to automated tools – so the competition is going to get harder!

That means that in addition to spending more money on the programmatic ad buys, companies will have to ensure their campaigns are that much more appealing in order to stand out and gain traction. To do that, companies will have to invest even more in copy writing, graphic design and development of high quality converting campaigns.

The main advantage of programmatic advertising is the clear shift in the direction of ROI-focused advertising. If up until now advertising campaigns were focused on awareness, the ability to optimize campaigns and reach a more relevant audience thanks to programmatic tools means that companies will be shifting their focus back to what matters – results and ROI.  Since programmatic advertising includes the ability to monitor ROI accurately, it has altered the way budgets are managed in order to put the focus back on gaining a return on investments.

As programmatic advertising tools improve and technology advances, programmatic advertising will continue to rise in popularity and as a result, bite a bigger chunk of digital advertising budgets in years to come – the good news is that programmatic tools tend to deliver better ‘bang for their buck’ making it money well spent!

Top 5 Advertising Trends for 2016

Even though 2016 is almost over, that doesn’t mean its too late to change your advertising strategy and implement some of the hottest trends in digital advertising.  Plus, it’s not too early to start thinking about your 2017 strategy, and if you don’t want to fall behind, you have to make sure you 2016 trends are on point!

So what trends can you not afford to forego?

#1 – Start incorporating Video’s

The first (and what some may call most important) trend of 2016 is the use of video for digital advertising. A Cisco report concluded that by 2018, 69% of all Internet traffic will be video based. Companies that want to stay ahead and reach out to a captive and ready audience must incorporate video in their digital advertising campaigns.  With digital ad spending on video only increasing, video advertising is one trend advertisers cannot afford to go without.

#2– Mobile Everything

Since the introduction of smartphones, the rise in the use of mobile devices has stunned even the most optimistic analysts. Already in 2014, mobile use surpassed desktop, and by 2015, 51% of the time adults spent with digital devices was spent on a mobile phone.  As digital advertisers begin planning upcoming campaigns, it is important to plan them for mobile devices and only then for desktop, as opposed to the other way around. If your target audience is on the mobile device, it isn’t the mobile campaigns that need to be optimized from desktop ones, but the other way around.

#3– The rise of Gamified Apps

If Pokemon Go taught us anything, it’s that consumers are willing to go above and beyond for something they find engaging and entertaining (just think about the guy who lost 28 pounds in 20 days). Since games have yet to be exploited in terms of advertisement, it is an excellent place for digital advertisers to focus if they want to tap into a captive audience that has shown willingness to go above and beyond for points (or pokemon).

#4 – Programmatic Advertising

Improvements in technology and increased competition has led to nearly two thirds of all display advertising being purchased through programmatic software and tools.  As a digital advertiser, it is important to stay ahead of the competition – and that means finding a programmatic advertising solution that works for you!

#5 – Humanize Your Brand

As machines begin buying ads and consumers grow weary of traditional advertisements, brands have begun turning to storytelling and human connections in order to build a brand identity that consumers want to connect with. Today, consumers don’t just buy a product – they buy a story, a vision and a piece of something they want to be connected to. For a digital advertising strategy to succeed, brands must humanize their story and make it easier for consumers to connect to them.