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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!

The Evolution of Programmatic Buying: RTB vs Programmatic Direct

Technology and marketing terms can get a little confusing sometimes. With all of the programs and tools out there, it’s easy to lose track of what to use when! In order to have successful marketing and digital advertising, however, we need to understand the lingo. So let’s break it down…

What is Programmatic Buying?

Programmatic buying sounds way more complicated than it actually is, so to break it all the way down, lets define it in the simplest terms: programmatic buying is the buying and selling of display advertisements using automated technology. Simple! Think of it as one computer talking to another computer, without the mess of human error in the way (goodbye lost emails and long response times). By making the digital advertising process more automated, the entire process becomes more efficient and easier to use.

You Mean There’s More Than One Type of Programmatic Buying?

Yes! There’s RTB and Programmatic Direct. These terms are often used interchangeably because people don’t fully recognize the different between them, but this oversimplification can actually harm the marketing and advertising industry! Don’t worry, it’s not only novices that make this problem – it is actually a problem on a large scale! And it only takes a little bit of attention to the differences between the two to get it right!

What is RTB?

RTB means real-time bidding – but don’t worry, you’re not headed to an auction house here! In simple terms, RTB is a technology mechanism which aids in automatic buying and selling of online advertisement impressions. The buying and selling works kind of like an auction house, only the real-time auction all happens during the time it takes for your webpage to finish loading!

How does RTB work? Let’s say you are on Facebook and on the side of your page, there is an ad impression. In the time it takes to load the page, information about the site you are on and you as a user is passed to an ad exchange. In this ad exchange, the information is then auctioned off to whichever advertiser is willing to pay the most for it, and the winner’s ad gets the impression spot! This whole process, because it is automated, takes a millisecond!

There are a lot of positive benefits to using RTB, but the most obvious is the effectiveness of the process. Instead of using websites as proxy, advertisers are able to target their audiences with RTB based on their hit and click history. The process therefore cuts down the number of impressions they put out using exchanges and other advertising technologies.

The confusing part about RTB is that it is inherently programmatic. Yes, RTB is a type of programmatic advertising, but not all programmatic advertising uses RTB. Programmatic is more of a characteristic of RTB than the definition of it. When you use the term RTB, you are referring directly to the RTB technology which holds open auction markets and private marketplaces.

What is the Downside to RTB?

RTB was revolutionary for the world of ad buying, but it came with a small price. The downsides mostly relate to the vagueness of the buy – there is no guarantee that you will get the ad spot of your choice and there is no information about the specific sites your ad will be displayed on (only the category of sites). Also while RTB allowed a deeper transparent look into the media buying world, it doesn’t fill publishers in on the decision making process behind advertisers buying their inventory by removing the direct relationship between advertiser and publisher. To top it all off, RTB is a little harmful for premium publishers, giving the full advantage (arguably) to publishers. So what happens now?

Programmatic Direct to the Rescue

Programmatic Direct can be called numerous things (programmatic premium, programmatic guaranteed, programmatic reserved, premium direct, automated guaranteed), but don’t be fooled into thinking these are different things. All of those terms all mean the same thing!

In a nutshell, programmatic direct is the an automated process of direct media buyers which solves the problem RTB creates by removing the direct relationship between advertisers and publishers by allowing advertisers to buy directly from the publisher, but without filling out the tedious insertion orders. In this way, publishers and advertisers get the transparency they need to make the most out of their campaigns. For example, in this way, when advertisers buy inventory from a publisher, they are guaranteed the spot they purchase!

By offering a system that includes a guarantee instead of an auction, programmatic buying was able to surpass RTB by supporting more targeted marketing to audiences.

So Which One Should We Use?

When it comes down to it, both types of programmatic buying are still in use by advertisers and publishers all over the world. The choice comes down to preference! Consider the positives and the negatives and optimize your campaign with whichever fits your needs!

 

Want to know more about programmatic buying – check out  our Ultimate Guide to The Evolution of Programmatic Buying 

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!