Programmatic Media Buying: What You Need To Know

According to a recent eMarketer report, programmatic buying is on track to reach $15.43 billion by the end of this year. Yes, $15.43 BILLION – accounting for almost 60% of all US digital display advertising. That’s an increase of over $5 billion from 2014, when programmatic spending hit $10.32 billion.

With numbers like that, we get that it sounds like you should be taking part and dedicating a percentage of your budget to it. But, what do you really know about the programmatic process? And, is it worthy of your precious marketing dollars?

It is important to fully understand the pros and cons of the programmatic in order to decide if it is right for you and your company. Here’s a Q&A to help break it down.

Q: What is programmatic media buying?

A: “Programmatic” essentially means that the media buying is automated or processed through a machine. One of the most common automated buying platforms is real-time bidding in computer-run auctions. Ad placements you desire to buy are made available on the exchange by publishers, and then computers identify those placements, place bids and, if all goes well, instantly place your message.

For example: A home and garden client is looking for placements targeting a particular demographic: Women 25-54 who have made purchases at a home improvement store in the last 30 days.

Based on enormous quantities of data, programmatic buying computers will identify those placements on an exchange based on your demographic requirements. Immediately following identified placement opportunities, the computer will place bids and, if won, will display your message to Women 25-54 who have made purchases at a home improvement store in the last 30 days. Sounds like a process, right? Truth is, this is all instantaneous and happening in less than the time it takes to load a web page.

Q: Why should I care about programmatic media buying?

A: Efficiency. Programming your buy streamlines the process of media buying. It removes friction points, leg work and execution time, all of which cost you portions of your finite budget.

Q: Can I trust my entire ad budget to computers?

A: No. I emphasize that it streamlines the process of buying. However, don’t make the mistake of thinking that programmatic is a black box solution.

It’s costly to get hypnotized by the techno-speak associated with it and think that the system is smart. It is smart but it’s only smart at the buying piece. The rest is up to the strategy of humans to setup the system based on each brand’s specific parameters and goals.

Once the programmatic buying strategy is established and executed it needs to be tested and refined, again by humans. Objectives employed in programmatic buys vary from awareness to direct sales, and everything in between. Obviously, the right setup will vary widely along that spectrum.

Q: What are the risks involved with programmatic media buying?

Pro Tip: Go into this brave new future with your eyes open.

A: That lovely decreased cost-per-thousand impressions is not the whole story. Your actual efficiency depends on how many of those impressions were served to humans. Yes, while machines were out buying your media more machines were pretending to be people who were looking at your message. This is just one of the many complexities of the programmatic world, such as viewability, arbitrage, private marketplaces, data freshness, cookie expiration and more.

While it can be a little intimidating it can also be liberating to have programmatic experts in your corner ensuring that everything is on the up and up and giving you an advantage in the marketplace.

Bottom Line: Before you dive into programmatic media buying, consult an expert. Find an agency partner that has high levels of expertise and integrity. Even if you just have a few questions about if it is right for you and your business, the right agency can help you navigate the marketplace and establish KPIs that will steer your investment towards the highest ROI.

You may need to challenge convention within your organization. If you are going to take full advantage of the benefits of programmatic, the right partner can help gradually move your organization in the right direction. The good news is that high accountability of the digital medium will allow you to prove when your diligence has delivered for your company.

Programmatic is here to stay. Feel free to call us anytime if you have questions. We’re happy to help familiarize you with this type of media buying (303) 232-2585.