For people who live and breathe digital marketing, there’s probably not a nook or cranny where you can escape the word “programmatic.”
For anyone who’s managed to find one of those crannies by living under a rock, let me bring you up to date. Programmatic buying is a big deal. It’s projected to account for 67 percent of all display buys in 2016, according to eMarketer. Despite this shift, a recent study (PDF) by Circle Research and funded by AppNexus found that nearly half of digital advertisers understand very little or nothing about how programmatic buying works.
People Don’t Get Programmatic. They’re Confused.
I’ve heard from plenty of advertisers that think they need complex platforms or rivers of cash to do programmatic. Which is certainly not true. In fact, advertisers of all sizes — from your local camera shop to big corporations like Ford — used programmatic last year. Programmatic buying has the power to deliver the holy grail of digital: relevant ads and efficient results across screens.
So let’s define programmatic in the simplest words, break down why it’s important and dive into three tactics to master it in 2016.
At Google (my employer), we have a number of programmatic offerings. I’ll use the Google Display Network (GDN) as an example, since anyone can use it right away via their AdWords account.
What Is Programmatic?
Programmatic buying is using technology and data to automate the display buying process.
That’s what you might hear across the web or at digital marketing conferences. But between you and me (and in plain English), programmatic just means we’re using machines to help buy ads.
Why Is Programmatic Important?
First: Relevancy. It’s now possible to use huge amounts of data to show people ads that are more relevant to them based on their online behavior or customer profile.
Second: Efficiency. Before programmatic, people would call direct sales teams at publishers to negotiate things like targeting types, number of impressions and price. Programmatic can help automate this process.
And together, relevancy and efficiency lead to impactful results.
Let’s say you run marketing for a global travel company. With programmatic technology, you can deliver ads containing flight deals to a travel enthusiast as they’re reading an online blog about the famous Krabi Islands in Thailand. You can even do things like deliver tailored ads to someone an hour after they’ve abandoned their shopping cart on your site.
If you look at what’s occurring on your app or website, you’ll likely see a wide range of visitors, behaviors, demographics, interests and shopping stages. These all translate into millions of signals, such as time of day, location and more that programmatic technology can bring together to figure out how to deliver the right ad to the right person at the right moment.
Programmatic sounds like a lot of work, but with the right platform, you can get up and running in a few easy steps.
3 Tactics To Master In 2016
At the heart of programmatic lie three things: audiences, ads and bids. You might find yourself asking these three questions:
1. Audiences: How do I reach the right person in the right moment? You’ll want to think about the different types of customer attributes programmatic can take into account when displaying your ads. Attributes include:
Behavior.
Demographics.
Interests.
Actions taken on your site.
Past purchase activity.
Now, if a person has never been to your travel site but is exhibiting behaviors that indicate they’re in the market to buy a flight to Thailand, you can use interest-based targeting to acquire these potential new customers. On the GDN, we call people who are actively researching products or services in your category “in-market audiences.”
If a person’s heard about you before and has used your app or visited your website, use remarketing to re-engage past site visitors with relevant ads. Since 96 percent of shoppers won’t make a purchase on their first visit, according to Forrester research, you’ll want to bring them back to your site when they’re ready to buy.
Let’s say you find these audiences are performing well. If you want to go after new customers that look like these audiences, use lookalike targeting. It’s an easy way to grow volume based on your existing, profitable customers.
On the GDN, you can accomplish this with similar audiences. And we’ve seen some powerful results with it — advertisers see 38 percent more remarketing conversions when they’re also targeted to similar audiences, compared to a corresponding remarketing campaign (Source: Calculated median from internal Google data, March 2015).
2. Ads: Once you’ve identified the right audience, how do you show them the right ads when it matters? If you look at all the elements needed to reach a person with the right message and in the right place, there are a lot of combinations to think about, including ad size, format or device.
A great first area to look at is your ad rotation settings. You can upload a few ads and let the system pick the best performing one. It’s an easy, entry-level way to automate your ad serving towards more clicks or conversions.
The next step is to think about whether you’ll want to create standard versus dynamic ads. If you want the most basic creative, standard (or static) ads will show the same generalized message to your customers.
Below is an example of a standard ad:
Standard ads usually work best for businesses with fewer products or stringent legal restrictions. While creative standards will vary across platforms, on the GDN you can upload three ad sizes (300×250, 728×90, 160×600), and the system will resize your ads to fit 95 percent of placements. And if you’re still using Flash ads, the system will automatically convert them to HTML ads. You can have your cake and eat it, too.
If you want to get sophisticated, using dynamic ads lets you match the ad to the person. If you want to reach past site visitors, you could use dynamic ads to show them custom ads containing products they may have looked at previously.
Below is an example of a dynamic ad:
As you can imagine, dynamic ads work best for businesses with a wide selection of products or services (Think: tens of thousands of products). On the GDN, you can create dynamic ads with dynamic remarketing.
3. Bids: Once you’ve found the right audience and ads, how do you set the right bid at scale? Let’s say you want to target men between the ages of 25 and 54 living in Indiana who love cats, or women in their 20s who live in San Francisco and are interested in computer science. There are millions of data signals and combinations that marketers can choose from, such as device, location, time of day and more.
This sounds complex, but programmatic solves this complexity. Programmatic has the speed, scale and automation to react faster to changing market dynamics. It’s constantly analyzing huge amounts of data signals, measuring performance and adjusting your campaign bids to maximize your results.
On the GDN alone, there are more than 70 million unique signals that go into each auction bid decision. To keep things simple, you’ll want to automate bidding based on your business goals.
Let’s say your goal is to drive more conversions. AdWords lets you choose between two advanced bidding options, enhanced cost-per-click (eCPC) and target CPA bidding. eCPC functions essentially the same as manual bidding, but your max CPC can be boosted by up to 30 percent more. Target CPA, on the other hand, handles all of your bidding based on a CPA goal.
If your campaign doesn’t have much historical conversion data, or if you’re using third-party bidding tools, you should start with eCPC. If you want to automate the entire bidding process towards conversions, you should use Target CPA.
Let’s say you own a camera shop with hundreds of different products that vary in price — if you want to optimize towards value or a return on ad spend (ROAS) goal, you can use Target ROAS.
As exciting as all of these tools are, just remember that automated bidding isn’t a “set it and forget it” thing. It still requires human attention.
Conclusion
Programmatic has redefined the way we buy display ads today, but advertisers shouldn’t be confused by it or feel that it’s too difficult to implement in their accounts.
Think of programmatic as having your own personal assistant to help automate your tasks so you can focus on the important stuff, like strategy or reporting.
Now that we’ve simplified programmatic and how to do it, try out these programmatic best practices to create even better outcomes for your business.
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