With a staggering 90% of the world’s data created in the last two years alone, it’s little surprise that advertisers are turning to automated trading platforms to make sense of the flood of consumer data- but jargon and lack of knowledge still hampers industry growth. As one of the biggest players in the ‘big data’ revolution, Google held its first UK conference on programmatic ads last week to shed more light on the fast-growing industry. Netimperative was there to report on their take on the future of ad trading.
So just what is classed as ‘Programmatic’ advertising? The term refers to any practice where ad space is bought automatically by computers, based on pre-determined criteria set by advertisers.
For example, using the DoubleClick Ad Exchange to ensure a deodorant ad appears on a 30 second pre-roll YouTube video across multiple publisher sites, but only for the following:
• UK residents
• Male gender
• Aged 18 to 24
• On YouTube between 6pm and 11pm
By pre-assigning these criteria, advertisers can rely on DoubleClick to automatically serve their ad to these people- cutting down on wasted ad spend and time spent making individual deals with publishers.
Unsurprisingly, the practice is growing in popularity. The IAB UK recently reported that 28% of all display ads were now bought via programmatic ads, compared to 22% from ad networks and 51% via direct deals between advertisers and publishers.
As a result, a raft of ad tech companies have risen to the fore in recent years. Indeed, this year’s Cannes Lions festival saw the likes of the Rubicon Project, Turn and Pubmatic hosting their own parties to get creatives learning about their various programmatic buying platforms.
Google is also keen to be seen at the forefront of this new era of advertising, with many of its platforms now linking marketers to publishers with an automated and granular way of reaching a specific audience, cutting out wasted inventory in the process.
“Doing more, faster and smarter”
Speaking to the 250 delegates at the ‘Think Programmatic’ event at the BAFTA headquarters in London, Matt Brittin, Google’s VP of northern and central Europe, urged his audience to see past the hype and jargon of the practice to understand its role in the future of ad buying.
“Programmatic trading is like teenage sex – everyone is talking about it, everyone thinks everybody else is doing it when they’re not, and those who are doing it probably aren’t doing it very well,” he quipped during his presentation.
After showing video interviews with a number of baffled marketers trying to explain programmatic ads, Brittin appealed to the audience to see the practice in its simplest terms: “using technology to do more, faster, and get smarter as you go”. He went on to explain that programmatic already exists in search.
Briitin used Unilever’s recent ‘All Things Hair’ initiative to demonstrate how brands are using big data to make smart marketing decisions. The FMGC giant noticed that in the hair section of YouTube, videos were dominated by user-generated ‘how to’ guides for the latest styles. Working with agencies Razorfish and Mindshare (alongside selected content creators), the brand learned what hair-styling tips women searched for on Google and forwarded these queries to a team of video bloggers, who are paid by Unilever to create YouTube tutorials- promoting Toni & Guy, Dove and VO5.
View this promo video for the platform here:
Brittin concluded by emphasising speed as a key differentiator over competitors. “I don’t just mean in terms of real-time decision making when it comes to what content to show people, but also in product development, trends development and how to position yourselves to consumers. With speed here will become competitive advantage,” he concluded.
‘Learning to love your IT colleagues’
Moving the discussion on to interpreting audience signals, Harry Davies, head of Product and Solutions Strategy UK at Google, hosted an interactive demo to show big data on action. Davies cited a recent Gartner report forecasting that by 2017 the Chief Marketing Officer will spend more on technology than the Chief Information Officer, and urged marketers to break down silos between themselves and the IT department. He argued that too many organisations are still structured about the product rather than the customer.
Real risk is “not taking a risk”
A panel debate moderated by former New Media Age Editor Michael Nutley asked the question: “Is programmatic advertising incremental or transformational ?”
Kristi Rogers, Boston Consulting Group likened the practice to the financial industry, and the switch to stock market electronic trading in the 90s- with programmatic platforms determining the value of information rather than stocks.
Ultimately, she concluded the ad industry was less about the ‘averages’ of the 50s and more about how advertisers make use of precise real-time global data. “It’s not about Mad Men anymore, it’s about Math Men” she concluded.
Hamid Habib, managing partner, strategy at OMD UK offered an agency perspective on big data. He asserted that in a performance led market, programmatic marketing is less of a transformational force than some may think. He pointed out that brands tend to think customers want a relationship with them, but the customer views the interaction as a “value exchange”.
Habib added that the real value of programmatic would come when online data is linked to other consumer touch points, such as restaurant tills. He used the example of Nandos till data in London, showing that diners in Brixton preferred fiery chicken whereas those in Shoreditch preferred Mango and Lime – presenting great opportunities for geo-targeted campaigns, whether online or via outdoor poster campaigns.
Louisa Wong General Manager, EMEA at AMNET, Aegis International said that many firms where getting programmatic wrong. As a result, they were “following customers round the web with ads for shoes they’ve already bought”. Wong pointed out that programmatic can also be used for “negative advertising”, using the technology to stop sending too many ads to the same person. This would ensure that valued customers are not bombarded with a multitude of duplicate ads or poorly interpreted keyphrases.
Alison Thorburn, Head of Search at BT, advised that brands hesitant to use programmatic ad platforms should run tests first, and emphasised the need to select a good partner, setting clear goals and “not being afraid to fail”. Thorburn reminded the audeince that campaigns that fail now could always work in six month’s time, when the technology or user base catches up.
The panel ended with Nutley reinforcing the idea of testing programmatic campaigns before committing a large portion of your budget to the practice, warning that “the real risk is not taking a risk”.
“Which half of advertising is wasted?”
In his presentation, Damian Lawlor at Google looked at the ‘complexity conundrum’ that hampered big data analysis. Citing the famous century-old John Wanamaker quote; “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” he looked at the challenge facing advertiser accountability and how it has changed in the digital age.
Lawlor said that with programmatic technology, the marketing industry is closer to knowing when ads are wasted. He looked at 6 companies that had successfully used programmatic ads (in one form or another) to deliver results. For example, Procter and Gamble noticed that a female only ad was reaching an audience made up of 30% on google search ads. By using Google’s programmatic ad platform, the FMCG giant managed to cut that down to almost zero, reducing wastage while ensuring the key audience was reached.
“It’s hunt or be hunted”
To conclude the event, Peter Hinssen looked at the challenges corporations face to adapt to the new data-centric world. The technology entrepreneur, lecturer and author looked some brand successes and failures when it came to taking advantage of new consumer behaviour.
For example, Tower Records missed a golden opportunity to “invent iTunes” back in in early 2000s. Customers were exploiting the record store’s returns policy by ripping CDs and claiming the money back within 30 days. Rather than open up a digital music store to cater for their customer’s changing consumption habits, the firm simply ditched their returns policy. Unsurprisingly, the company went bankrupt just a few years later as music fans switched to MP3s.
By contrast, Disney made smart use of audience capture with ‘magic bands’ given to all Disneyland goers. The internet-connected band is used as a ‘token’ to purchase many activities at the resort, such as food, rides, hotel rooms and park access- giving the entertainment giant a wealth of real-time data on how customers behave throughout the resort.
Hinssen predicted that in time markets will become networks, trading on information. As a result, companies have to reinvent themselves as networks too.
Hinssen concluded: “Every market that is information-rich is being attacked by people who get data. It’s hunt or be hunted. Your new competitors are not other agencies or brands, but the guy with a hoodie in a garage in Silicon Valley.”
Taking control of data back from the networks
After the event, Netimperative spoke to Phillip Miles, director of media buying solutions at Google UK, who heads up DoubleClick in the UK.
When asked about the key differences between programmatic platforms and traditional ad networks, Miles pointed out that brands can retain more control of the consumer data that results from campaigns, making it easier to build on successes and learn from mistakes.
“Ultimately it’s about advertisers getting a clearer view of their data. It makes a big difference for longer term media planning,” he said.
Alongside brands and publishers, Miles said it was important that DoubleClick got agencies on their side, and one way to do that is by keeping their platform neutral.
“DoubleClick is an open platform. We can offer an all-in-one solution for clients, but if they already have invested in a third-party data platform we can integrate with that too. I think being open is the only option in a fragmented industry.”
But what about advertisers that simply don’t get programmatic? Miles said that while it’s perceived as a ‘new’ term, the practice has existed for many years- it’s just that new technology (and a flood of new data) has made it more scalable.
He referred to a case five years ago, when the Patak’s brand working with Google noticed that Boxing Day was the number one day for search referrals in the UK as people sought out turkey curry recipes. By acting on the data, the food brand was able to put a strategy in place for the following Christmas- offering deals and discounts ahead of the festive season that reaped record-breaking sales for that time of year.
“Although it was half a decade ago that campaign was essentially programmatic- it’s just the process is much easier now,” Miles concluded.
Watch this video from Google covering highlights of the day below:
