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Forbes, The New York Times, The Economist…they’ve all written feature stories about it.  “It” is a new approach to finding customers online which is changing the way marketing departments and ad agencies operate. Yet most senior executives are blissfully unaware of what “Programmatic” is all about.

Programmatic is a semi-automated method of honing in on a target audience online and placing bids in real-time to reach that audience via advertising. It involves a human being manually setting the criteria for the target audience and letting the technology find the smartest way to reach it.  In best practice, skilled operators constantly monitor the results and tweak the criteria to optimise clicks and ROI. 

Remarketing, that is targeting previous visitors to your site who have not completed defined goals such as registration or purchase, is a prime candidate for programmatic. Strategy consultants BCG claim programmatic can increase ROI by 30-50% thanks to sophisticated retargeting technology which profiles users in milliseconds before an ad is locked in to appear to an individual user.

What are the advantages of Programmatic?

In traditional media buying, you book a banner ad to appear on another company’s website which attracts your target audience.  However with programmatic, you can narrow the field so only visitors to that website who meet your specific criteria (eg. location or device) see the ad. Conversion rates are higher with this personalised approach, and wasted ad impressions are eliminated.

As programmatic leverages technology to track users’ online behaviour, it is more data-driven than traditional media buying.  Deeper data insights = smarter marketing and lower advertising cost.

A real-time auction

Programmatic can be thought of as a real-time auction, where you place your bid for the right to pop up your message to individuals across a massive global inventory of advertising spots – as one marketer commented, “Google on steroids”. You can set your maximum bid in advance, and of course the highest bidder wins. Purveyors of the auction are Ad Exchanges, which can be thought of as stock exchanges for the advertising industry, driven by market demand. 

A new industry

Digital agencies specialising in programmatic have, not surprisingly, started springing up on fast-growing company lists, spawning a new industry of entrepreneurs. By 2018, analysts estimate that half of all online display ads in the US will be bought programmatically, and Australia is playing catch-up…so watch this space.

If you are interested in exploring programmatic as an option for your marketing and digital strategy, please contact us.

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