Why programmatic is the future of advertising

Overview

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Improved personalization and better ROI on ad spend, marketers are turning to programmatic advertising to boost their digital efforts.

The World Federation of Advertisers says that global spend on programmatic advertising will account for 28% of digital media spend in 2019, up from 17% in 2018.

Marketers, today, are tasked with doing much more with a lot less. All while simultaneously demonstrating an attributable return on investment (ROI). The advent of digital marketing gives marketers a much broader range of opportunity to promote their brand in the marketplace. However, it can be challenging to know where to begin. To more precisely target and promote across channels, marketers are investing in programmatic advertising as the pillar of their digital strategy and are being rewarded with extraordinary outcomes.

What's in it for the Brand Marketer?

Programmatic advertising is a smart decision for many reasons, a few of the most notable include:

1. It's trackable and measurable
2. Extends the advertising reach
3. Diversifies the revenue stream
4. Affiliates add innovation and creativity to the brand's marketing

The power of data and predictive analytics

The skill to bring together numerous devices and revenue from both online and offline streams is shifting how marketers advertise. Customer consumption of content has largely moved to digital. Hence the increased need for programmatic.

Programmatic advertising involves automated bidding on ad inventory in real time. Multiple brands all contending to show their company's ad to consumers in a specific context (last mile segmentation). Brand marketers can customize ads based on the data they are collecting and serve them to specific customers.

Over the past year, even offline media has lent itself to programmatic. As an example, display boards outside stations and malls can be programmatically managed based on interaction with them.

The primary advantage of programmatic advertising is that it generates high-quality leads. Imagine that you can use algorithms that process readily available data to categorize your brand's ads and match them to your customer profile with variables like age, gender, income, geography and a multitude of others.

It's next-level marketing!

Increased personalization, higher returns

Customers expect a personalized experience for viewing ads. Brands must be able to recognize and collect deeper insights into user behaviors. Over the next few years, most of all digital marketing spend will be towards one component - programmatic advertising.

Programmatic advertising gets retailers in front of the customer during the golden hour of interest in the product.

The World Federation of Advertisers says that global spend on programmatic advertising will account for 28% of digital media spend in 2019, up from 17% in 2018, regardless of growing uncertainties over the influence of GDPR on its revenue.

The significant amount of digital spend prompts one question - why?

If a brand has a 10% conversion rate, 90% of website visitors have not completed a call to action.

Some of those visitors have weeded themselves out by not being interested in the offering, but a larger majority of those visitors still needs a supplementary push to complete the call to action.

By retargeting those individuals with ads that bring them back to your website, you can ensure that visitor is not lost and capitalize on the investment you are already making with programmatic ads.

In real-world terms, programmatic renders to a scenario like this:

1. A retailer has a webpage with product ads configured for programmatic advertising and wants to market to consumers in an appropriate way.
2. A potential customer attracted to a particular dress sees the appropriate ad which has a discount coupon for it.
3. The customer clicks on the ad, and ideally makes a purchase (completing the call to action).
4. If the customer exits the webpage without completing the call to action, the retailer can send that customer a direct email with a personalized discount coupon for the dress all in a very timely manner.

This approach will allow the retailer to be in front of the customer during the golden hour of interest in the product.

Getting started: three factors to consider

When evaluating programmatic advertising, it is imperative to first think through these three vital factors: ROI, data and mobile friendliness.

1.ROI
Since, programmatic comprises of bidding, building in a maximum spend upper limit to avoid going overboard is essential.

2.DATA
For data, marketers will require the bandwidth and skill set to continuously review and analyze customer information, then leverage the insights to augment targeting.

3.MOBILE
Given the explosion of mobile/handheld devices, any ad deployed must be mobile/handheld device friendly. The target audience should be able to seamlessly engage with the ads on any device they choose. So thorough testing is mandatory.

Programmatic advertising takes digital personalization to a higher level of precision than what most companies have experienced or are ready to take on. Executing an effective programmatic strategy takes proficiency and effort. Moreover, the impressive ROI is motivating more and more brands to get in the game.

Ready to raise the bar for your brand's communications?

Talk to the experts at Apex.