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Programmatic Buying: The Future of Digital Media Campaigns

This post is also available in: Spanish

Up to now, digital media buying has mostly been dominated by a custom approach in which you work to match up relevant ads with relevant sites to deliver relevant segments.

But what if you could spend your budget on trying to reach the customers you want to reach, not just a rough percentage of them based on your match-up?

What if you could use a system that automatically (and continually) optimizes your campaigns?

And what if you could reach many more sites than with a manual buy, aggregate highly responsive customer segments to reach a mass scale and measure clicks, shifts and conversions with your campaigns in real time?

These are all the advantages of programmatic buying, a new, paradigm-shifting way of buying digital ad space and implementing online ad campaigns.

What It Is
Programmatic buying basically involves using an automated platform to buy ad impressions. You enter in your customer data, budget and campaign objectives. The programmatic buying platform does the media buy for you based on an auction for available impressions, taking into account the data you entered. The platform also matches up the ads each user sees with the available customer data. The idea is that each Internet user will see an ad that fits their specific needs and interests. For buyers, this means that they only pay to reach the clients they want to reach.

How It Works
Programmatic buying is driven by data. For best results, buyers need to enter in as much data as they can about their target audience. Usually, brands have a wealth of data about their customers that they can provide. In addition, through the programmatic buying platform they choose to use, they can also purchase more data provided by third parties on a CPM basis. Third-party data types can be demographic (e.g. gender, age, income, etc.) psychographic (mindset, interests) and behavioral (recent searches, credit card usage, etc.) The programmatic buying platform takes these data points and uses them to run the campaign. The goal is not just to match the right ad with the customer, but also the right context, especially the context that leads to the campaign objective being fulfilled.
As happens with search marketing, there’s bidding. You bid for the impressions you want and the programmatic platform handles the buy with an auction system that decides who gets what in milliseconds—this is known as Real-Time Bidding (RTB). There are two main approaches to buying media programmatically. With Price-Based Trading, you try to buy the impressions for as low a price as you can and benefit your campaign by reducing the cost as much as possible. You can target and optimize with this approach, which in practice tends to be manual and not automated. The other approach with programmatic buying is value-based. With the value-based approach, you take advantage of the system’s ability to learn from customer responses to ads. The system then automatically gives a value to each ad impression so you know which impressions deliver the goal response you want from your customers—and which ones don’t.

How It Plays Out
Let’s say that you purchase your impressions and have the objective of getting women 35-44 to click on a banner for a jewelry product. And Elena, an Internet user that fits your target demographic, visits a smartphone Web site on a Monday and then a soccer blog on a Tuesday. Because of the data the programmatic buying system has about your campaign and your target, when she visits the soccer blog, she sees an ad for jewelry. This fits her behavior and is in the right context to reach her, specifically. Now contrast this with a custom buy for the soccer blog. Given that it’s a soccer blog, it’s likely that a custom buy would result in Elena seeing an ad for an energy drink or a men’s fitness product. So with programmatic buying, you’re not matching product category to publisher category, you’re matching product to customer profile and behavior, thus increasing the probability of response. And this increased probability isn’t a random supposition, it’s based on what has actually happened based on measurement of previous behavior by the Internet users.

What’s Next
According to eMarketer, spending on digital display ads via programmatic buying will grow by 73% in 2013, with double-digit increases every year through 2017. Given this trend and the clear value of this approach in terms of delivering greater ROI, US Media Consulting has created Media Desk, one of the first-ever programmatic buying platforms for Brazil and Latin America. A robust technology platform and user-friendly interface in 3 languages make Media Desk the ideal solution for any digital media planner who wants to deliver the power of programmatic buying for their clients.

To find out more, please visit mediade.sk or write directly to sales@mediade.sk to obtain a free demonstration of this innovative platform.

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