Programmatic may be the most exciting thing to happen in marketing since brands started to advertise on the internet.
The promise of programmatic is that mass advertising can be individually tailored to create personalised, one-to-one communications.
By combining automation and data, programmatic can enable marketers to make use of everything they know about their audience to send them personalised advertisements and customised messaging in real time.
For this reason, the implications for marketing professionals, marketing departments and the agency landscape are revolutionary.
The reality though is that many marketers have been slow in getting to grips with this new approach.
To try and understand why, I caught up with Head of Digital at Disrupt the Market Ltd and Econsultancy trainer Andy Letting.
Andy, an established senior digital leader, has worked across a range of digital transformation projects supporting traditional businesses to adapt to the fast paced world of digital marketing.
He will be delivering a programmatic workshop prior to Marketing Week and Econsultancy’s Get with the Programmatic 2016, taking place on September 21.
Programmatic has been around for several years now. Is there are a reason why some organisations have been hesitant about making it a part of their marketing activities?
“If I put a digital hat on, the process is straightforward in terms of data and technology.
“For marketers schooled in traditional marketing and non-marketers within a business, it might be easy to get confused by the vocabulary used to describe programmatic and so it can be difficult to get your head around.
“My background is all digital and so I am used to thinking about data, reaching the right audiences and rigorous measurement.
“I can however understand how programmatic may not have evolved as quickly within mainstream marketing departments due to organisational structures, marketing skillsets and leadership teams which may not have come from a digital background.”
Digital transformation is a topic that we spend a lot of time thinking about at Econsultancy. Is it fair to say that programmatic is another lever driving the transformation agenda?
“Digital is disruptive by its own nature; whether that’s from a customer’s perspective or within an organisation.
“I think programmatic could be seen as disruptive within the media buying space but then again digital as a whole is disruptive. Mobile has been disruptive for many years now.
“There are different areas of digital from website design, media buying, tracking customer journeys, operations and ecommerce.
A hub and spoke model for organisational structure
“Programmatic is just another iteration that to some extent is simplifying a way of buying media that was fairly clunky and not straightforward.”
Andy makes a good point. Programmatic is another step along the path to digital transformation.
Another theme that regularly surfaces from Econsultancy research, analysis and client discussions is the requirement to become more customer centric.
A key barrier in becoming more customer centric cited by many businesses is that of organisational structure.
Econsultancy publishes a very popular report called “Digital Marketing: Organizational Structures and Resourcing Best Practice Guide” which offers guidance to companies on organisational restructuring and digital transformation.
The report first came out in 2011 but has been revised since. Among other things it proposes a digital maturity model which has five stages of evolution:
- Hub and spoke
- Multiple hub and spoke
- Fully integrated
The end vision for ‘digital’ is essentially that it becomes so much part of the organisation that it ceases to exist as a separate function.
Many organisations though, are currently somewhere between the centralised and hub and spoke stages. This means that they still have separate marketing and digital teams.
I asked Andy how the separation between digital and marketing teams might impact upon the effectiveness of programmatic campaigns.
You mention the separation of digital and marketing teams. Could there be an issue where programmatic campaigns are run separately to other marketing initiatives?
Or could there be an issue where digitally minded people are able to structure a programmatic campaign but may not have the same marketing and commercial awareness as their colleagues in the marketing team?
“Yes that’s a good point. From my experience programmatic has always been a nice to have. I’ve generally seen it sit within the digital team.
“How closely the digital team works with the marketing team depends upon the organisation.
“I think you’ll find that because it’s perceived as technical, you will find traditional marketers may be wary either because of a lack of exposure or knowledge.
“As digital becomes more immersed within the marketing department and the marketing framework, we still start to see the two working in more harmony.
“Until digital is fully integrated into the business and the marketing team has been skilled up on digital, that knowledge gap and challenge will remain.
“The reality is you need both. You need to know who your customer is and also the technical know-how of how to reach those people.
“If you take an FMCG company like P&G or Unilever that owns multiple brands, one approach to integrating programmatic into other marketing activities may involve testing.
“One brand could test programmatic by having an internal sponsor who can put the building blocks in place and take other business stakeholders on a journey.
“Ultimately though, programmatic is all about focusing on the customer and pulling together skillsets within the organisation to reach that customer in ways that you haven’t done before.
“That means getting brand buy in and support. You will also need to bring together legal and data teams.”
In Econsultancy’s 2016 Digital Trends report, 7 out of 10 marketers said that optimising the customer journey across multiple touchpoints was going to be very important for their marketing over the next few years.
Is there an opportunity for programmatic to serve different kinds of advertising depending on where somebody is along that journey?
“So there are a number of things here. Of course, advertising needs to be relevant.
“If you are in the infancy of your programmatic journey, you will have your lookalike models, CRM models and your prospecting models and you’ll put them into the data pot (DMP) to try and get them all to work together.
“I think the reality is that relevance is the utopia but at the same time that is only as good as your data.
“From my experience, a lot of brands have really struggled in terms of getting a single customer view and (so) have been very reliant on partnership data, second-party data and even third-party data.
“Ultimately where the real value lies is in creating unique data sets that are so refined to that customer and that need that ultimately you are driving greater conversion and greater revenues.
“There are many different scenarios that you play out that you then have to adapt and make use of the learnings. For instance, programmatic buying on Facebook is probably one of the most advanced in terms of data available.
“The data that Facebook has on people is phenomenal. That’s why there’s this huge head-to-head between Facebook and Google.
“My point is that programmatic can help marketers to see opportunities. For example, you can do A/B testing and seed videos on Facebook for 24 hours.
“Then, Facebook can scale up the video that gets the most traction after 24 hours to meet your budget automatically. It’s all done in an automated fashion.
“Also, what can actually happen is that brands find out that they’ve inspired audiences that they never knew were interested in their brand and so suddenly they get all of this insight back from testing that can completely reshape their customer profiling and awareness.
“For me it’s about bringing that insight back into the business to reform campaigns.”
If marketers are going to launch and optimise ad initiatives as opportunities emerge, does this suggest that the process of setting advertising budgets on quarterly cycles may not be appropriate for managing campaigns that need to be managed in real time?
“The Financial Controller will give you a budget but it’s important that you make some of that budget available for some sort of innovation. You take a percentage of your budget and that’s your innovation pot.
“If you don’t make budget available for testing, you won’t be able to benefit from programmatic and other new tactics.”
As organisations continue to respond to digital and the opportunities available through tactics like programmatic, we can expect to see a new marketing model that marries the ability of marketers to think creatively with the precision of utilising multiple data sets to create a single customer view and deliver automated campaigns that can be adapted on the fly.
For this reason, marketers may need to embrace programmatic and the opportunities it brings or they risk being left behind.
To continue your programmatic education, why not attend Get with the Programmatic, Econsultancy and Marketing Week’s conference on the topic, taking place on in London on September 21.