Programmatic’s future use paints a bright picture (Column)

    Check out the latest AD-Vantage news, features and columns. Subscribe today Dax Hamman is chief product officer at Chango We recently had the pleasure of hosting Jonathan Margulies of The Winterberry Group at a webinar titled “Programmatic Everywhere?” Margulies presented the results of a white paper of the same name, in which 260 […]
 
 

Dax Hamman is chief product officer at Chango

We recently had the pleasure of hosting Jonathan Margulies of The Winterberry Group at a webinar titled “Programmatic Everywhere?” Margulies presented the results of a white paper of the same name, in which 260 executive level leaders in our industry shared their insights on their current and anticipated use of programmatic technologies.

Dax Hamman

If you’re as passionate about programmatic as I am, you’ll find the results gratifying. While it’s certainly good news that programmatic has reached critical mass (with 91% of advertisers and 83% of publishers saying they will use it in the next two years), it’s hardly the most interesting part of the findings. What really excites me is the emerging use cases of programmatic in the very near future.

For instance, 91% of all panelists say they expect to use programmatic to support “audience segmentation.” They plan to use the big data and analytics capabilities of programmatic technologies to identify and classify consumers based on demographic, transaction history, observed behaviour, and stated or inferred interest.

Going further, they’ll use this and other data from third-party providers to create robust customer profiles. Those profiles will then be leveraged for specific customer-centric marketing initiatives, and even product and market research.

This is really good news for everyone, not just advertisers. Given the number of ads consumers see daily – most of which are irrelevant to us – it’s no surprise that we’ve learned to tune them out, which is bad for advertisers. And the constant bombardment of ads that don’t resonate cause problems for publishers as well; according to an article in Forbes, up to 22% of web surfers use ad blocking software. For sites that depend on advertising to keep the lights on, ad blocking is a deeply disturbing trend.

Which brings up another, truly exciting, use case: 88% of panelists in the Winterberry Group study say they’ll use programmatic as a way to glean actionable insights from their advertising efforts. They’ll search their campaign media data to see what consumers like and don’t like – as measured by their response to ads. Listening to the data, as it were, will certainly help advertisers curb the activities that lead to ad blocking software downloads (e.g. excessive retargeting, ads the inadvertently offend).

More importantly, data-driven listening, when combined with robust audience intelligence, will help advertisers design marketing initiatives that reach higher up into the sales funnel and influence consumers in the pre-consideration phase. Advertisers, it seems, now view programmatic as a viable way to grow their business by bringing new customers to their brands. Isn’t this the true promise of advertising?

I believe that consumers will benefit from the advertisers’ actionable insight as well. Consumers today now view themselves as partners or advocates of the brands to which they’re loyal – largely because social media gives them a megaphone of influence. By engaging and rewarding these consumers with meaningful messages (and offers), brands will strengthen those bonds.

The final programmatic use case identified by the Winterberry Group is content optimization. Some 47% of panelists say their organization uses a programmatic approach to content optimization today; in two years time, that number will jump to 69%.

What does programmatic content-optimization mean exactly? Programmatic technology, fueled by big data, creates and delivers content based on the user behind each impression. Specific offers, contextually relevant ad treatments and messages are all presented according to the interests, demographic and behavioral profiles of individual audiences. Perhaps my 14-year-old nephew will no longer see ads for nightclubs he’s too young for on his favourite music site.

Programmatic content-optimization is particularly useful in direct-buys, in my opinion. In a typical guaranteed campaign scenario, brands provide the publisher with multiple ad creatives that are rotated randomly. Let’s say you’re a national restaurant chain advertising on my favourite site. Sometimes I’ll see ads for a delicious looking burger, other times I’ll see lo-cal entrees. Why not leverage what you know about your customer base (e.g. women prefer healthy meal options) so that you always show the best ad for each reader?

All in all, The Winterberry Group report makes clear that programmatic is growing up, so to speak. Where once it was viewed as a method for buying cheap inventory in an automated fashion, today’s marketers see programmatic as a foundation for better understanding their customers, learning how to engage with them better, and actually creating more relevant experiences for the consumer. And that’s why I’m excited about the future of programmatic.

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