Programmatic Advertising Trends for 2017
With 2017 just around the corner, there is no better time than now to implement one of the fastest growing marketing disciplines of the digital age…
Estimated to account for 63% of CPG (consumer packaged goods) display advertising spend in 2015, programmatic advertising is no longer just a “buzzword” for the marketing pundits of the digital age. In today’s ever evolving and highly globalized information economy, programmatic advertising can help marketers meet and exceed the needs of today’s “on demand,” personalization craving, and “internet of things” consumers.
As 2016 is expected to close with mobile advertising spend surpassing $100 billion, and with mobile programmatic advertising reaching $20 billion, we have dedicated this post to what we expect to be one of the key programmatic advertising trends in 2017.
Yet, for those unfamiliar with this discipline, and for those who are still relatively new to the term, let’s quickly review the basics of programmatic advertising by answering a few simple questions.
What is Programmatic Advertising?
Programmatic advertising is really a catchall term incorporating everything from behavioral and intent-based targeting, to real-time bidding and exchange-based buying of inventory.
Don’t worry, a lot of marketers are. In simple, plain English, it is the automated process of buying and selling ad inventory via artificial intelligence infused technology solutions. It typically refers to the use of software to purchase digital advertising, as opposed to the traditional processes of bidding and purchasing.
In plainer English, it is essentially using machines to purchase ads.
How Does it Work?
Programmatic advertising is all about precision.
As the automated marketing technologies of today grant marketers advanced access into the consumer mindset, including their wants and needs, programmatic advertising is the next logical step in tech advancement. Companies that employ programmatic processes use AI technology to analyze visitor / consumer data, and thereby create marketing campaigns that are highly targeted and personal, just like consumers expect and desire.
Without diving in too deep, it is important to understand, at least generally, the process of programmatic media buying. To start with the technical stuff first, programmatic advertising includes DSPs (demand side platforms), SSPs (supply side platforms), and DMPs (data management platforms). While DMPs collect and analyze user data to allow for informed decisions making, DSPs facilitate the process of open market purchase. On the publisher side of the exchange, SSPs manage ad inventory and track additional consumer data. In a transaction that happens in the blink of an eye, an SSP will select the winning bid and proceed to publishing.
Essentially the process plays out like this:
- Consumers search the web
- Publishers send dimensions of ad space to SSP
- SSP analyzes consumer data
- DSP submits a bid
- SSP picks a bid
- Ad is published to consumer
All of this in a matter of seconds!
Why Does it Matter?
One word – efficiency.
Like most aspects of marketing automation, programmatic advertising allows processes to be streamlined. Before the rise of these tech infused strategies of buying and publishing, digital ad buying was engaged in by ad buyers and salespeople… i.e. humans. By removing the often unreliable and expensive human component, programmatic advertising has created a cheaper, more reliable, and efficient purchase process.
Other benefits include:
- Enhanced consumer insights
- Ease of use
- KPI optimization
Going Mobile in 2017
As marketers, we should all understand and be well aware of the importance of mobile marketing strategies in the digital age (i.e. the great connector). And yet, traditional models of mobile advertising have consistently lagged behind consumer’s frequency of use. This has resulted in a significant gap between consumer expectations, and what marketers are actually providing. The one-size-fits-all mantra of yesteryear does little to serve today’s Millennial consumers.
It is important to remember that, just a few years ago, the idea of “going mobile” with programmatic advertising was out of reach. As Advertising Age noted in 2013, the notion of tracking consumer media behavior across multiple devices was beyond basic cookie compatibility at that point in time. It was difficult for most marketing gurus (though not all) to visualize a programmatic future with such technological uncertainty in 2013. Yet, in today’s digital age, new solutions are arriving almost weekly. From client/device generated identifies, to statistical IDs, to universal login trafficking, alternative methods of consumer monitoring have emerged as commonplace in 2016.
Early adopters and innovations are in a prime position to reap the substantial rewards of programmatic mobile advertising in 2017.
While recent studies do in fact predict spending on programmatic mobile advertising to exponentially increase in 2017, there currently exists a substantial disconnect between its application / use, and its potential. The Interactive Advertising Bureau notes in its recent study (Marketer Perceptions of Mobile Advertising) that while over a quarter (26%) of those surveyed consider programmatic mobile advertising to be very important (with 50% considering it somewhat important), only 27% of marketers surveyed had purchased mobile advertising programmatically. This means that 2017 is sure to be a tipping point, as mobile ad spend is due to surpass desktop for the first time in history.
Understanding this, let’s review some of the main areas of focus for programmatic mobile advertising in 2017.
Marketers and consumers alike are intimately familiar with the digital age marketing technique of retargeting. As a staple of successful desktop marketing, retargeting gives marketers the ability to provide relevant and personal messages to users that are already familiar (at least vaguely) with their products and services.
We all know how it works:
It’s December 23, 2015. The holiday season is breathing down your neck, and you have yet to purchase all of the gifts you need. You have run product searches on both Amazon and Ebay, ranging from camping gear to Samsung TVs, but you have yet to fully commit to making a purchase. The next day you sign on to continue the shopping struggle, and as if a Christmas miracle occurred, you see a tiny ad informing you that the customers who bought the camping tent and TV that you were looking at, also happened to buy a portable lamp and touchscreen remote control… BOOM purchases complete.
Retargeted advertising essentially functions in this way. It helps marketers develop and nurture a purchasing relationship by providing consumers with a personalized, and value driven purchase experience.
How does this relate to mobile?
Well, with 34% of today’s retail shoppers saying that their mobile device will soon become their main purchase tool, retargeting has taken on a heightened mobile importance. A recent study by AdRoll found that 87% of the 1000 marketers surveyed are likely to have invested in mobile programmatic remarketing this year, with 82% of marketers currently retargeting on mobile (up from 54% in 2014!). With 2017 just around the corner, the time is now to prepare your business for mobile retargeting via the use of mobile identifiers.
Mobile identifiers are tools used by both buyers and sellers to build audience profiles, and to help marketers get ideal messages to ideal clients, and at ideal times.
Already mentioned above, these identifiers are only accessible through mobile applications (not the mobile web), and they make retargeting possible within a programmatic mobile context. Let’s imagine for a moment that a potential consumer has begun their purchase process via a mobile device, but has not yet completed their purchase. Mobile retargeting allows brands to remind the potential consumer of the value they left in their mobile shopping cart. Location identifiers also allow for enhanced mobile retargeting in the digital age. For example, if you know that a potential consumer frequently attends sporting events for a particular team, this location specific information can help create context for future retargeting with which the consumer will engage.
Potential areas of focus for 2017 include:
- A move from location signals to proximity signals
- Combination behavioral and geolocation signals for new audience searches
- Retargeting via cross-device marketing (i.e. omni channel integration)
Dynamic Creative Optimization
A second area focus for programmatic mobile advertising, and one that is going to change the game in 2017, is known as dynamic creative optimization.
This is a form of programmatic advertising that refers to display ad technology that automatically optimizes ad creativity based on mulitvariate testing. Again, to put it in plain English, this essentially means having the ability to automate A/B testing, while at the same time, using algorithms to interpret and understand how to serve ads that perform better. A recent industry survey conducted by Celtra found that, while 92% of marketers believe creative messaging to be more important than ever, 58% say they have insufficient operational resources. To translate, this means there is a clear market need that is not being fulfilled.
While approaches to the method of optimization are likely to vary from strategy to strategy, most DCO processes consist of:
- Creative development
- Identification of test variables
- Definition of the optimization objective
- Method of optimization
Creative development is achieved through the implementation of creative tools, and could potentially include animation, video, and interactive components. “Test variables” refers to A/B multivariate testing, and the method of optimization could range from an initial user engagement, to a post-install metric. DCO ad units receive multiple feeds of data, as well as sets of rules, in order to develop unique creatives on the go. As ad campaigns continue to run, each variant is tested and analyzed, and the ad units will automatically begin to show more of those elements that are achieving high performance, and less of the elements that underperform.
Why should dynamic creative optimization be on your mobile agenda in 2017?
Simply put, it is automation at its best… not only for its ability to create efficient, reliable, and automatic testing processes, but for its ability automate optimization. It allows marketers to focus their valuable time and effort on other viable disciplines of digital marketing, while resting assured that their advertising is continuously being optimized. Beyond mobile, DCO can apply to banner ads, links sponsored on social media, as well as rich media and videos.
Look to employ DCO in 2017 when:
- Operating a direct response campaign for multiple products with a large number of impressions in your budget
- Your campaign size is large to the point that even small gains in performance affect your bottom line
- You possess well-organized and value driven data feeds
There is no better time than now to get the jump on 2017 with a strategic, creative, and efficient programmatic advertising campaign. Mobile is the future, and the future is now. Good luck, and happy marketing.