Programmatic Media Buying: What You Need To Know

According to a recent eMarketer report, programmatic buying hit $15.43 billion by the end of 2015. 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, it probably sounds like something you should be taking part in and dedicating a percentage of your budget to. But, what do you really know about the programmatic process? Is it worthy of your precious marketing dollars?

It is important to fully understand the pros and cons of the programmatic buying process in order to decide if it is right for you and your company. Here’s a Q&A with Blue Onion Media’s CEO, Joel Grabois, 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 used in computer-run auctions. Ad placements you desire to buy are made available on the exchange by publishers. Computers then 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 based on the demographic requirements. Immediately following identifying placement opportunities, the computer will place bids. If you win those bids, your message will be displayed to your target demographic. Sounds like a lengthy process, right? Wrong. The truth is, this is all takes place instantaneously 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. We want to emphasize that this streamlines the process of buying. However, don’t make the mistake of thinking that programmatic is an all-in-one solution.

It’s easy to make the assumption that the programmatic buying system is smart. Unfortunately, that can be a costly mistake to make. The system is indeed smart, but only when it comes to making bids. For the most part, it is up to 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; a task only humans can do. Goals for programmatic buys vary from awareness to direct sales and everything in between. So 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. That’s right, while machines were out buying your media more machines were pretending to be people who were looking at your advertisements. This is just one of the many complexities of the programmatic world, along with viewability, arbitrage, private marketplaces, data freshness, cookie expiration, and more.

While this process can be a little intimidating it can also be liberating to have programmatic experts in your corner to give you an advantage in the marketplace.

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

If you are going to take full advantage of the benefits of programmatic, the right people can help gradually move your organization in the right direction. The good news is that high accountability of the digital medium will allow you see whether or not you’re achieving the desired results.

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 303-597-9661.

This post was written by Joel Grabois, CEO at Blue Onion Media.