Programmatic solutions get advertisers into the heads of their target audience
PricewaterhouseCoopers recently published its Global Entertainment and Media Outlook 2014-18, analysing where consumers and advertisers are spending their media dollars. The report reveals that online will become the largest advertising segment, set to rise to $194.5bn (£114.8bn) by 2018. Mobile will also overtake classified advertisements this year, and video will see accelerated growth, with revenue rising at a 23.8% CAGR (compound annual growth rate). It's encouraging to see this appetite but further shifts in understanding audiences across different devices are needed to capitalise on mobile and video trends.
The report found that advertisers are increasingly looking to programmatic and native solutions to improve display advertising performance. This is an emerging trend but one which has seen slower uptake than hoped perhaps because it's radically different. However, forward-thinking brands, publishers and rights-holders who are using this intelligent approach are reaping return on investment (ROI) and increasing their advertising revenues.
So why has programmatic become so crucial to understand now? Consumers are sharing more content than ever before, with billions of sharing data points across digital channels. The complexity and sheer volume of this data produced by the millisecond is hard to picture. But it needn't overwhelm marketers. It's actually a opportunity to better target consumers and prospects in a timely and relevant way, at scale. This is where programmatic comes in: processing this information must be intelligently automated. Sophisticated algorithms can understand characteristics, analyse consumer behaviours and bring a previously unavailable form of business intelligence to help brands gain an in-depth understanding of their audience. This enables them to engage with customers effectively with the right products and services when they might be considering a purchase, increasing visibility, engagement and ROI.
Up until now, some have assumed programmatic is a one-dimensional offering such as just real-time bidding. This is a misperception; the concept of "real-time bidding" is simply the practice behind buying and selling advertising impressions in an open marketplace, akin to an auction model. This is where brands are (in theory, at least) able to buy and sell online display advertising in real-time, one ad at a time, and serve them to the public. However, as with most software, your desired outcome is totally reliant on the information you input and the way in which you use the data. How often have you been served an ad for a pair of shoes or a train ticket which haunts you after you've already made the purchase? Real-time bidding is an important trading component but it is the entire marketplace that is becoming programmatic. This enables brands to collect, evaluate and optimise all forms of digital content and media so they can serve targeted offers, messages and ads across all channels. Marketers can then identify customers in real-time, in the right place, and on the right device – this is the power of programmatic, which is helping brands to retain or win new customers.
By taking a programmatic approach, a little known but critical trend called "dark social", can also be overcome. Contrary to popular belief, social platforms such as Twitter and Facebook are not the leading ways to share content, accounting for only about 25% of all shared items. Dark social is the other 75%, which has no referrer data – so you can't trace how someone arrived at your website. This mainly occurs with email, instant messages and whenever someone is moving from a secure site to a non-secure site. In essence, this large pool of potential customers is invisible to most analytics programmes and therefore not accessible to marketers who need to connect with these increasingly fragmented audiences. Smarter tracking of shared content is required to combat this. Marketing teams must also consolidate the data and track the volume of shares and referrals that occur, and see which channels are the most effective source for driving new customers.
In a nutshell, by using programmatic, marketers can connect the dots between content, audiences and media buying to ensure brands are genuinely reaching their target audience based on their likes, preferences and behaviours right here, right now. This is a hugely powerful asset for brands. PricewaterhouseCoopers has reaffirmed the necessity to invest in programmatic. Organisations that implement these practices will have a competitive edge and can build lasting conversations with their fragmented audiences while creating new revenue opportunities.
Rupert Staines is EMEA managing director of RadiumOne.
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