How to become a trailblazer of the programmatic revolution

It’s a jargon-filled minefield and it’s about to explode – but do you understand programmatic yet? Ahead of next week’s Automated Trading Debate, we asked The Exchange Lab’s Chris Dobson to sell us the benefits…

Today consumers are constantly online. The growth in the usage of devices like smartphones and tablets has reduced the time they spend consuming traditional media. As a result media owners and publishers have evolved and expanded their digital offerings to deliver compelling content to where the audience now most frequently resides.

To counter the move away from the sofa and static, passive consumption, advertisers must find new ways of targeting their audiences quickly – and at scale.

A major part of the solution is the increasingly mainstream practice of programmatic advertising. Essentially this is the advertising equivalent of the stock exchange. Instead of trading stocks and shares, programmatic advertising is about buying the right audience, at the exact time they are in the mind-set to have the most positive response to an ad served. Imagine an advertiser that is trying to reach C-suite executives through digital advertising.

Just like a trader looks across all markets to achieve the best returns on their investment, programmatic will consider a number of different media outlets across all consumer digital devices, in this case to target, for example, the audiences of BBC.com, Time.com and The New York Times.

It becomes clear that placing ads on Time.com will command the fastest and most efficient ROI, so it targets their readers only. All of which happens in milliseconds.

An element of programmatic is Real-Time Bidding (RTB). This refers to the buying and selling of online ad impressions through real-time auctions happening while a webpage, video, or mobile app loads. These auctions are often facilitated by demand-side platforms, (I’ll come to those later).

The way RTB works is that as an ad impression loads in a user’s browser, information about the page it’s on and the user viewing it is passed to a demand-side platform, which auctions the advertising space off to the advertiser prepared to pay the most.

The ad of the winning bidder then loads into the webpage instantaneously. Advertisers usually use demand-side platforms to help them decide what ad impressions to buy and how much to bid based on a number of considerations. This includes the sites they’re on and the earlier behaviour of the site visitors. The price of impressions is decided in real-time based on how much buyers are willing to spend.

Aligned to the developments in programmatic, a new group of service providers has materialised to give advertisers a different way to purchase and manage auction-based media. These providers and their associated tech are demand-side platforms (DSPs).

The benefit of DSPs is that their advanced technology allows advertisers to take advantage of real-time bidding capabilities across multiple inventory sources. As a result DSPs play a major role in the evolving auction-based media buying model.

DSP benefits include, access to multiple inventory through a single interface, consolidated view of the online audience, RTB management, campaign control, data management and finally, reporting and insights.

However, going back to the stock exchange analogy, think of each individual DSP as different markets. Dealing with just one fund manager is going to significantly reduce your chance to get the best return so a good idea is to also invest in a number of different funds, giving you more opportunity to engage across a wider range of markets.

This is exactly the principle that we work to. We liken our Proteus software to the Bloomberg platform. One of our human traders sits at their terminal and uses Proteus to trade across many DSPs to access the whole market and buy audiences primed for purchase.

For marketers the thought of putting brand reputations at the mercy of an automated system can be perturbing. For years, we have trusted the expert media buyers and planners at agencies or in our trading department to manually assess the media landscape for advertising placements that will expand and enhance our brands profile.

Knowing that a human eye has given the media environment approval for relevance and safety is reassuring and on the whole we have been happy with the results.

But human capabilities are limited and they do not expand and improve as time goes on. Technology however does, and the world of programmatic and real-time bidding demonstrates how technology (if still with a human driver) can take consumer targeting to unprecedented levels of granularity yet at a scale that humans will never be able to achieve manually.

Even the simple practice of setting up campaigns manually is prohibitive. But as programmatic takes on exponentially more volume, that limitation is removed if you employ the right technology.

And let’s not forget creativity. One of the most exciting opportunities that programmatic brings to the creative process is the ability to test creative before the campaign has even started, setting brands up for success from the beginning.

Through dynamic creative testing, we are able to monitor which creative is working and which isn’t and optimise in real-time. Brands that focus on creating emotional engagement would greatly benefit from these insights, especially where the goal is to change perception or refresh brand values.

Organisations that financial brands employ should adhere to the ‘UK Good Principles’ launched by the Digital Trading Standards Group (DTSG) and work with partners that use content verifications solutions (CV). The latter provides a protective layer for campaigns with strict criteria to prevent advertising creative appearing on certain sites. I’m proud to say these are key stamps of quality for us here at The Exchange Lab.

Brands should also consider a programmatic practitioner’s commitment to transparency. The more data and insight is shared, the more effective and efficient the activity will become.

Chris Dobson, executive chairman at The Exchange Lab, which was recently polled best for transparency by the International Media Survey..

Don’t miss out: MediaTel is hosting the annual Automated Trading Debate on 6 October. With panellists from Xaxis, Bauer Media, RadiumOne and Mediaocean, amongst others, the event promises a full examination of all the thorny issues arising around programmatic trading. Full details here.