Marketers May Be Missing Out On Hidden Intelligence Available In Programmatic Ad-Buying

By Richard H. Levey, Contributing Writer

Marketers may be tempted to view programmatic advertising purchases — online ad placements made through automated exchanges on the basis of pre-set targeting parameters — as a quick-service ad buying process. Those who do, however, miss out on a substantial part of these systems’ value, according to online publishers and industry experts.

“Clients recognize the value of data and audience targeting…when [ad inventory] is tied to data to more effectively meet client business objectives,” said Pete Duborg, VP of Advertising Sales For Programmatic at Turner (formerly Turner Broadcasting System).

Making maximum use of programmatic ad strategies means treating them as more than just set ‘em and forget ‘em insertion systems, experts suggest. “Programmatic is an automated way of buying [impressions] using algorithms,” said Alanna Gombert, Senior VP and General Manager at the Interactive Advertising Bureau’s Tech Lab, New York City. “When [ad space] inventory is offered for sale, it is tagged and uploaded into an exchange. Impressions are offered for sale in an auction environment, and a buyer either buys it or not based on different criteria.

“These criteria could be contextual — ‘I’d like to buy on this page that has the word Chanel on it’ — or they could be prospect-based — an advertiser is looking for consumers who fall into specific buckets, such as geographic location or purchase intent,” Gombert continued.

The good news is that there’s a fair amount of targeting flexibility. By and large, publishers and other organizations that offer ad inventory serve up impressions based on a variety of criteria. Are marketers taking advantage of this targeting ability? “Age and gender, to this day, are still the biggest values used to purchase inventory,” Gombert said.

Data Increasingly Drives Programmatic Purchases

That may be changing. Publishers have been encouraging advertisers to bring their own first-party data into their programmatic strategies, to use the data resources offered by the publishers themselves or to take advantage of third-party data resources.

“The data targeted in programmatic buys are as granular as household income, stage of life, age and interests,” said Megan Hartman, Director of Programmatic Solutions at Time Inc.

In the case of multi-property publishers such as Time or Turner, programmatic buying strategies can be tailored to each potential outlet. Imagine a culinary-related advertiser that sets up an automated purchase program that includes run-of-network, brand-awareness impressions throughout CNN-related online properties, mentions on a variety of CNN social media outlets, and, for some site visitors, full-page takeovers on chef Anthony Bourdain’s “Parts Unknown” website — provided the consumer accessing the site fits specific criteria determined by the advertiser.

This may sound like business as usual, but ad campaigns bought through programmatic ad exchanges can now be infused with data which allows much greater targeting — automatically. “[Clients] can take that hardworking media that might have been part of the original run-of-network buy and layer data on it in a programmatic environment,” Duborg said. “They can take a run-of-network buy from a dumb buy that doesn’t have data layered on it to a smart buy where they can target a specific audience.”

Turner itself is taking an active hand in its clients’ data integration activities. In mid-2015, it launched the Turner Data Cloud, a data management platform that enables clients to integrate both their own first-party data with third-party data into Turner’s proprietary programmatic transaction system.

The rise of programmatic buying systems doesn’t mean flesh-and-blood media buyers will go the way of the dinosaurs: Most publishers will have at least a few advertisers who want to continue making purchases on a person-to-person basis. Other clients may embrace online acquisition channels, but prefer to make their programmatic acquisitions through private marketplaces, which cut down the amount of auction-based jousting for ad inventory that takes place on the third-party ad exchanges.

Regardless of which programmatic system is used to make a purchase, publishers themselves are taking an active hand in expanding their clients’ data resources. Turner assigns a unique universal visitor ID to all of its property visitors. The ID allows the company to track its audience — in privacy-compliant ways — across most of its media ecosystem.

Similarly, The Economist Group builds its profiles on demographics such as job title or industry, or observed behavior, such as reader activity. The company augments its database with volunteered information, which it collects from attendees to live activities such as its Marketing Unbound and EuroFinance events.

In addition to targeting individuals based on their expressed or inferred characteristics, The Economist’s Programmatic Director Michelle Zitz has observed a rise in the use of contextual filters as ad-placement determinants. Advertisers, she said, are looking for prospects in specific areas who have specific mindsets, as might be determined by what they are reading.

Are clients taking advantage of this granularity? Yes, because the Economist prompts them to do so. “Having audience targeting included in our requests for proposals is very important, and we find ourselves asking for it,” she said. A few are also asking for heat-map data in their programmatic ad requests — data which allows their ads to be situated in high visibility areas.

If Zitz were to offer any caveat for marketers exploring programmatic buying, it might for those advertising in niche publications. Get quantity guarantees, she said. “It’s tough to reach out to a small audience and be guaranteed a reach or share of voice, because there might be other campaigns buying against similar audience targets,” Zitz said. “The [available ad] inventory on those sites may be a bit smaller.”

Microtargeting of a different sort can wreak havoc with programmable advertising purchases. “Marketers have a plethora of data available to them to use in targeting their campaigns,” said Corey Kronengold, Chief Marketing Officer at Paris-based sell-side ad technology firm Smart AdServer. “But on-boarding a variety of data sets creates its own complexities that nibble away at the overall [return on investment] of a campaign.

“The question marketers have to struggle with is whether or not the granular data available to them is worth using at all. The more granular the data, the more it costs to use. The higher costs, combined with the lower reach that comes from using granular data, come with a reasonably high amount of risk when you begin to factor in data quality. Depending on the product or service being marketed, casting a wider, lower-cost net can be a more effective tactic than implementing a more complicated, multi-layered data-driven approach.”

Kronengold continued, “When you target very, very narrowly, you ignore the value of branding. You are paying more for the narrow targeting in order to drive immediate ROI from in-market customers, but you miss out on putting your brand or product in front of people who may still be in a consideration stage, but not exhibiting behavioral or transactional activities that would put them into the dataset that you are using.”