The Benefits of Programmatic Media Buying


Post by Heather Kollme, Senior Media Manager and Ashley Smith, Senior Media Manager

According to eMarketer, US digital display ad spending is expected to surpass Paid Search in 2016 for the first time. The categories of “Video,” “Sponsorships,” “Rich Media” and “Banners and Other” combined will account for the largest share of digital ad spending: 47.9%, worth $32.17 billion.

Chart on US Digital Ad Spending from eMarketer

Additionally, eMarketer predicts that this year, more than two-thirds of all digital display advertising will be purchased programmatically, with mobile as the main component driving growth within programmatic ad spending.

Digital Ad Spending Chart on eMarketer

With the rise of display ad spending, advertisers should consider the benefits of running their remarketing and upper-funnel display tactics programmatically. Programmatic display ad buying yields to improved operational efficiencies and increased scale/reach via real-time bidding capabilities. Additionally, the availability of ad inventory is greater through a DSP (Demand Side Platform), allowing advertisers to purchase ad space from one platform, which has access to several exchanges, versus the search engines which generally only have access to one.

A few Performics clients that have switched display campaigns from a platform like GDN or Gemini to a DSP have seen performance increases due to:

  1. Targeting capabilities
  2. Increased scale tapping into exchange inventory
  3. Reporting on and optimizing against post-view conversions
  4. Layering an algorithm onto the buy
  5. Exhaustive optimization levers
  6. More robust reporting capabilities

BENEFITS of PROGRAMMATIC

Algorithms look at dozens of data points from the bid request as well as historical cookie/device ID data to determine a user’s value to a campaign. Algorithms determine the bid price, bought as a CPM, a brand should pay for an impression, based on the likelihood it will result in a conversion when analyzing historical conversion data. These improved efficiencies occurred for a Performics client when transitioning from Google’s AdWords platform to DSP DoubleClick Bid Manager and leveraging ad exchanges beyond just Google’s: 555% increase in impressions (scalability and reach) and a 377% increase in conversions (view through + post click).

Managing campaigns within a DSP allows for much more extensive and efficient capabilities to hone in to a target audience. Using 3rd party or a DSP’s proprietary data to track and optimize against viewability metrics and fraudulent activity ensures more impressions are being seen by consumers, which leads to better brand exposure, more accurate reach and frequency analysis and, of course, a more efficient campaign. Beyond having the capability to monitor viewability and fraudulent activity within DSPs, the tactical offerings across these user interfaces tend to be much more exhaustive than those through Networks (including GDN and Yahoo) or Publisher Direct.

To properly replenish search and remarketing user pools, it’s imperative to launch and scale out mid- and upper-funnel tactics to reach relevant users and drive them down the path to conversion. Post-transition to programmatic media buying, a Performics client saw that of all 12 display tactics running, the run-of-exchanges tactic and remarketing were the most efficient from a cost-per perspective and drove the highest amount of conversions. Other unique targeting capabilities that allow brands to reach an audience in a smarter, more efficient way include:

  • Recency Retargeting: This allows brands to bid and reach users more or less aggressively based on when the user last completed an action. Brands should be targeting users based on their actions; if a user hasn’t been to the brand’s site in 30 days, that person should be bid on differently than a user who has visited a client’s site within the past day.
  • Look-a-Like Audience: The way a look-a-like is created varies, but DSPs and data partners look at converters’ attributes and use an algorithm or create audience segments to target users who have a high propensity to convert based off historical data
  • Behavioral: The amount of data available to target and plan against in a DSP is much more exhaustive than that in search engines with Display capabilities because DSPs tap into dozens of 3rd party data aggregators. Types of data available through 3rd parties include:
    • TV commercial exposure involving the types of TV shows and channels users are consuming
    • Offline purchase behaviors via credit card data
    • Online activity such as content being read, links shared, purchases made and searches conducted
    • Social Media activity and shares
    • Consumer personas based on the types of locations users are visiting
  • Search Retargeting provides brands with thousands of publisher search data points and large engine data
  • Location Data allows brands to leverage more valuable information by:
    • Targeting users based on their IP address, which is great for B2B targeting by honing in on IPs of relevant businesses
    • Geo-fencing users and targeting based on vicinity to specific locations
    • Reaching users who have been to specific locations and messaging them after they leave
  • Private Marketplace (PMP) is an invitation-only marketplace where publishers make their inventory and audiences available to a select group of buyers. PMPs are similar to direct buys, but a publisher will reserve inventory and create a Deal ID that links that inventory to the DSP of choice to allow us to programmatically buy it. Buying premium inventory programmatically through a PMP allows brands to still use an algorithm to determine if they want to bid on an impression, unlike in a direct buy situation.

As programmatic continues to be top-of-mind and accounts for more of the digital spending market share, the benefits and opportunities of running programmatic through a DSP are important to consider for your media planning purposes.

To learn more about programmatic media buying, contact your Performics account team today.


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