Modern Marketing Blog

What Programmatic Advertising Means for Marketers

March 17, 2016 By: Steve Olenski

Before we dive into the matter at hand, let's take a quick stroll down memory lane, shall we? It used to be that if you were an advertiser, you would simply work with your agency to define the creative strategy, see a handful of creative ideas (knowing they were pushing you their favorite all along), tell them how much you wanted to spend, and what your goals were (maybe). The agency would compile a list of potential outlets for your ads and you, as the brand marketer, would place your insertion orders and wait. And hope. Success was more about brand recall and brand association (net positive) and less about ROI (wasn’t even a term) back in the day. 

Today, however times are different - which may be the biggest understatement ever. Enter programmatic advertising, which we define as “Automated advertising buying coupled with machine learning" and Digiday thusly: "Programmatic ad buying typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically.” 

Programmatic advertising aligns media with brand lift metrics for real ROI and only spends money where it will be effective. And based on the numbers and predictions floating around, I would say it's become quite popular among marketers and brands alike.

  • Back in 2013, the International Data Corporation (IDC) predicted that spending on RTB (real-time bidding) display advertising—one form of programmatic buying—would accelerate at a 59% compound annual growth rate through the year 2016, making it the fastest growing segment of digital advertising. 
  • eMarketer predicts that in the US alone, programmatic ad spending will be over $20 billion in 2016, more than double the amount seen in 2014.

  • In the UK, programmatic ad spending is expected to increase to over $4 billion in 2016, up from just under $3 billion in 2015. 

What Programmatic Advertising Means for Marketers 

For marketers to fully embrace a programmatic advertising program, ensuring the right combination of tech and content is key. Either via agency partners or directly, the tech to help manage the volume and variations of audience segments is critical. Additionally, planning cannot be under invested or under estimated. 

There are questions marketers need to ask themselves before getting utilizing programmatic advertising including: 

  • What are your specific goals for acquisition, retention, and nurturing campaigns?
  • Who will manage and how will they be measured?
  • Do you have the people and systems to obtain these metrics and have the ability to refine them and iterate? 
  • And more... see below

Additionally there are key terms marketers need to be aware of understand when it comes to programmatic advertising. To that end, we created a pocket glossary to use as a reference.

 

Download The Programmatic Guide For Modern Marketers, Publishers, And Media Planners to get the basics of using programmatic advertising and a lot more including the other questions marketers need to ask themselves as well as the needs agencies need to address. 

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