Programmatic advertising continues to grow rapidly, but despite a lot being written about it and a range of conferences dedicated specifically to the topic, it would seem that marketers still need to educate themselves on what programmatic is, how it can be deployed strategically and how best to manage it.
This is especially important as programmatic continues to evolve beyond basic retargeting to include digital out-of-home, TV and audio. The pace of change certainly isn’t making things easy for marketers to understand, let alone optimise.
Outsourcing programmatic versus managing in-house
With the rapid pace of change, it’s no surprise that many brands are using agencies to manage their programmatic activities rather than hiring their own teams. Of course brands may have their own reasons for this but it’s no surprise that one of the main criticisms of this approach is that it can negatively impact upon creativity.
To discuss this, I caught up with George Levin, the CEO and co-founder of Getintent, a machine learning-powered programmatic platform. George had some interesting things to say about the state of ad tech in general and why he thinks programmatic should be managed in house.
George Levin, the CEO and co-founder of Getintent
Historically, there has been some uncertainty about what bringing programmatic in-house really means. For some, it involves contracting professional services from technology vendors; for others it’s about hiring the right people and integrating the right technology and aligning programmatic with other marketing activities.
According to George: “Brands can only be creative when programmatic is brought in house. If you run everything in house, you can have some great creative. After all, who knows the brand and the customer better than client-side marketers?”
George points out that this becomes especially important when it comes to running programmatic for more top-of-the-funnel activities: “Prospecting activities need more involvement from the client-side marketers. More hypotheses can be tested to find the best and most efficient ways for prospecting using programmatic buying.”
George points out that unlike basic retargeting, prospecting needs to be based on specific brand knowledge and customer research. Client-side marketers are in the best position to do this.
Econsultancy has hosted a number of conferences about programmatic in recent years. A common refrain from brand side marketers has been that the budget required to manage programmatic in-house has been too great and also that it’s too difficult to assemble the skills required.
That opinion no longer holds true according to George: “Brands can run successful programmatic campaigns with a team of just three people – a tech guy who understands the mechanics, an ad operations person and an analytics person. In fact, a smart kid spending two years in the area could run everything.”
Ad technology is becoming commoditised
In terms of the ad tech, George explains that ad technology has become commoditised: “You don’t need super smart tech guys to run your own tech stack. There are plenty of white-label DSPs, DMPs and optimization tools.
“Everyone can afford a white-label DMP. This can be used to activate first-party data and high quality data from third parties. The DMP could then be connected to a white-label DSP. To integrate vendors and make your own stack without engineering help you just need a marketer with some tech background. Every marketing team should have a tech person.”
Source: Chief Marketing Technologist Blog by Scott Brinker
Levin even went so far as to say that clients of Getintent are willing to pay for full service programmatic management. That’s something that the company facilitates but he was very clear that he wants to focus on technology that he can sell to self service clients. The problem he says is that ad technology decision-makers are relying on agencies and vendors because they don’t understand how things work.
And so despite everything that’s been written about the state of the programmatic ecosystem in terms of transparency, fraud and ambiguous metrics, it would appear that the elephant in the room (for some) may be an aversion to taking responsibility for managing programmatic in-house. It’s just easier to ask for full service.
Whatever the issues with programmatic are, the budget being spent on it continues to grow. According to Zenithmedia [November 2016], programmatic trading accounts for 70% of the display advertising market in the US and the UK. The same research suggests that by 2018, the programmatic advertising market is expected to reach $64 billion. That’s a big chunk of change.
Attribution isn’t a new challenge. Despite the increasingly crucial role that attribution plays, Econsultancy’s State of Marketing Attribution report found that less than a third of organisations carry out attribution across the majority of their campaigns. According to George, many marketers still use a last-click attribution model.
Another is when marketers use an assisted post-click attribution model. This is when an order is attributed to all sources that generated a click within a post-click window. For example, marketers can attribute part of the value of a transaction to each of their traffic sources. In some cases, they might attribute greater value to the first or last click. In other cases, they might decide to attribute equal value to each source.
The challenge is that some advertisers might end up assigning the same order to multiple sources, rather than weighting those sources to attribute a single order.
This is one issue that George doesn’t recommend trying to solve this problem in-house. He suggests that AI has a key role to play in handling this kind of problem: “There are a few some good vendors that can handle this problem who use AI to calculate the actual impact of each touchpoint and how it impacted the final transaction.”
In conclusion, the key points that George Levin wanted to get across are that programmatic can be used for upper funnel activies and that for it to work effectively, brands should examine how they can grow their own expertise to manage programmatic campaigns. The combination of brand knowledge, customer insight and the ability to customise programmatic campaigns will be key to success.
Getting on top of programmatic
Wherever you are in your programmatic journey, this year’s Festival of Marketing will play host to a stage dedicated to exploring the programmatic landscape. Attendees will learn how brands can keep abreast of new platforms for programmatic display, evolving technology to purchase and place adverts as well as the changing roles of agencies.
Whether you want to explore programmatic trends or learn about managing programmatic strategically and tactically, we’ll have it covered. The Festival of Marketing 2017 will take place on 4th and 5th October at Tobacco Dock on London.
If you already have an understanding of programmatic and want to look at some of the wider strategic use cases and challenges to be aware of, Econsultancy has published a number of reports on the subject: