Programmatic marketing: Debunking the hottest buzzword and recognizing its limitations
During the first week of November, 20,000 technology and marketing professionals descended upon Dublin, Ireland for the Summit – a conference that has quickly become the largest of its kind in Europe. Pilot was there to capture notes, impressions and ideas from this year’s speakers, which included Bono, Peter Thiel and John Sculley. Here, with an eye trained on all things tech and marketing, is the first instalment of our three-part series covering the event.
Jimmy Kimmel called programmatic the “gluten of advertising,” but a recent survey declared that more than a third of Canadian marketers have never heard of it. On the Marketing Stage of the Summit, several high-profile experts weighed in, giving their views on this hot new term.
So what is programmatic? It can be divided into two camps:
- Programmatic advertising is the evolution of real time bidding (RTB) technology that uses data to buy ad and media space on online marketplaces similar to stock exchanges. Tim Cadogan of media agency OpenX describes the marketplace as, “good for the buyers because the software looks for efficiency, match, and the cheapest commodities.” It’s also good for sellers because algorithms can bid on what was formerly low-rent inventory and create demand where there was none before.
- Programmatic marketing occurs where software can be written to understand that if x should occur, then the system should do y. Or if person a matches a certain criteria, then the algorithm will deploy circumstance b to match that target’s behaviour in real time. Basically, automated marketing plays out a series of events and their consequences.
Highly appealing because of its automated and scalable nature, programmatic can turn a campaign on its head in a number of different ways. Before programmatic, a human would analyse data and cue a program to run a campaign or buy media. With programmatic, the software determines when human insight is required, which, despite some innovation, is still a missing feature of most digital marketing tools.
To understand how programmatic works and its limitations, however, we first need to understand the tools it relies on – namely, data. Today, every platform, channel, or program you use, as well as every interaction you have with the online world through your computer, tablet or mobile is being monitored for data. Some studies say that every day the average person is exposed to between 3,000 and 20,000 messages. Data is systematically matching people with messaging, all with the help of a sophisticated algorithm that is constantly expanding.
While this may seem like the perfect solution for an increasingly connected and digital landscape, Chief Digital Officer for global advertising firm CPB, Ivan Perez-Armendariz, notes that 66 per cent of the world wants to be inspired by advertising, stating, “This is bad news for the big-data algorithms, and great news for storytellers.” Ultimately, programmatic has its appeal, but it does not signal the death of the creative. More importantly, it calls for agencies and brands to make the most of new technological innovation without losing the human creative and strategic oversight behind strong communications.
The following three principles lay down the groundwork for how that’s done:
- A human-machine-mixed team must strive to achieve the best pace possible. Split-second decisions at scale are what have driven programmatic advertising, marketing, and other automation innovations. Companies have to act faster, across more channels and networks, often in conversation with larger audiences than ever before. Brands working with agencies to implement a new norm in the form of a process that delegates executive power to more individuals, both inside and outside the main brand. This approach will enable people to react to new developments across social and online channels with the help of programmatic functionality. Investing in these resources – with both trust and budget – is the only way to maximize success.
- Understand what should be automated, and what shouldn’t. Real time bidding (RTB), for example, is about efficiency in bought media execution – automatically buying the cheapest commodity for what you need. Whole marketplaces exist where buyers’ algorithms bid on the media they want, while sellers’ algorithms place inventory up for auction. No matter the size of your brand or reach, the online media landscape is huge, and automating the bidding process may never hurt your campaigns. Building a creative story, however, is a strategic exercise meant for people who gather insight from listening throughout owned, earned and bought media to gauge the sentiment and desires of your core audience. In a talk that exposed Coca Cola’s social “war room” during events like FIFA, digital director Doug Busk emphasized the coalition between expert community insights and companies like Taykey, which automate media buying based on trends.
- Don’t strive for perfection, because 99 per cent of the time, perfection takes too long. As Jeremy Basset of Unilever points out, “Every day that your idea sits in a powerpoint is a day that idea dies.” Teams who add to the creative campaign by building insights, visuals, and instant infographics need to have the ability to experiment in order to improve their processes and output time. If you’re striving for perfection, chances are you’ll miss the moment (remember Oreo’s Super Bowl success?) According to Basset, a one second delay can cost you 7 per cent of your revenue, and five seconds can cost you 30 per cent of your audience. In that case, creative, vetting (data), production, and output need to happen as quickly as possible.
Programmatic technology is a natural progression for complex digital campaigns to reach mass audiences over fragmented channels. Marketing’s latest buzzword has proven itself to be highly valuable to publishers, ad buyers, and the marketplaces that service both. But the effect of excellent creative work on a marketing campaign does not come down to big data or instantaneous ad-purchasing capabilities. In the world of communications, man still wins over machine.