Tag Archives: digital

What is programmatic advertising?

Published / by Simon Foster

If you are an advertiser you may have heard the expressions “programmatic buying”, “real time bidding” and “ad exchanges”. You may be wondering what all this is and what it means for advertisers, if you are then read on…

“Programmatic” advertising, is effectively automated online media buying – often at large scale and at very high speed (faster than lightening in some cases). Advertisers use computers to participate in real-time automated auctions for digital ad space across a large number of publisher web sites.

Bidding is supported by big data analytics; predictive algorithms are used to target bids using information about web users such as location, platform, device, browser, and where available, other forms of behavioural data relating to specific but anonymous users. There is some big data science behind this, much of which has its origins in high frequency algorithmic trading in financial markets where the principles are very similar to automated online advertising. For example, information about a user is matched to a bidding rule in a minute fraction of a second – enabling a bid to be made and a relevant ad to be served by the time the page being visited by the prospect fully loads. This high speed automated decision making is not dissimilar to rule-based or algorithmic trading in financial markets.

So is programmatic advertising important? Yes; it’s important to the long-term health of digital display as a medium and it’s important to advertisers in terms of increased advertising efficiencies. Let’s look at each of these.

Firstly, automated buying is boosting the fortunes of digital display advertising by creating renewed interest in the medium. Online display has struggled to demonstrate efficiency in the face of PPC which is based on pay per click (PPC) trading. For many years display has been traded on a CPM basis, that’s simply the cost of reaching people in their thousands, with no accounting for click or sales performance. That’s why Google has commanded such as large share of digital budgets over the last decade. But programmatic buying allows advertisers to place data-driven bids to ensure campaigns deliver the most responsive target audience at the right rate. This will significantly boost the ROI delivered by digital display and make it much more competitive with PPC. This in turn should enable it to take larger share of digital advertising budgets.

For advertisers automated buying offers a real opportunity to increase ROI from digital display. This opportunity comes from three sources: ROI-based trading mechanics, better ROI based audience targeting and clear performance transparency. All this offers advertisers a chance to make digital display much more cost effective. Moreover, the increased efficiencies delivered by automated trading will make digital display more competitive against PPC. Long term, automated display buying could have the effect of diffusing spend out of PPC alone and across the two platforms – theoretically this reduction in demand could reduce bid prices in PPC.

Are there any down sides?

It remains to be seen whether automated buying – which by its nature can reduce ad revenue – will deliver consistent long-term growth to digital display. It’s also worth noting that not all media owners will sign up to ad exchanges; those who feel they can realise the value of a web site more holistically than the lowest CPC denominator may well be resistant to signing too much inventory over to automated trading platforms – leaving them to fight over the lowest value inventory.  There are also  issues around the quality of the traffic delivered through high volumes of remnant inventory – remnant inventory is by its nature ad space that can’t be sold by normal means because it’s not demanded by media buyers. Buying remnant inventory through ad exchanges can mean you are buying into some low quality sites which may not be right for your brand’s image.

Dairy Milk gets the gorilla, but Galaxy gets the growth

Published / by Simon Foster

dairy-milk-gorilla

So, Dairy Milk with its Drumming Gorilla TV ad campaign has posted a sluggish 2% market share growth whilst ‘run of the mill’ Galaxy has romped home with a 12% growth. Research has shown that the Gorilla ad is more memorable than Galaxy activity, but clearly this success in recall does not seem to have translated into success in sales. Quite rightly, this result immediately ignites a discussion about the sales value of creativity. You can get into some of that here.

Not entirely unconnected to this is the debate that took place on the 4th August at the IPA – “Who makes better planners? Planners or creatives?” Veteran creative Dave Trott and planning sophistocrat David Golding battled it out with Trott arguing that it’s time planners got back to building sales rather than using advertising “to provide a window on a brand’s soul and to build the brand’s ‘equity’ in people’s minds”. Golding defended the principle of using the brand as a source of insight, and quite valiantly by all reports.

I’ve worked on projects with both of these characters, with David Golding on an existing client account at WCRS and Dave Trott on a creative pitch at WTCS (as was). Dave Trott worked in an interesting way. He did his own planning in his own mind, based on very considerable experience. His approach was intuitive – he visualised the target audience as people he knew (in this case his mother and her friends) and asked himself what type of message would engage her. Then he wrote those messages down and turned them into a visualized campaign for TV and press. Trott’s campaign was a distillation of the communication problem, solved, simplified and then visualised. Dave Golding on the other hand was measured, considerate, analytical and logical. He’d be as likely to base a campaign on what his mother thought as a judge would be to discuss a legal technicality with a courtroom security guard. The work that resulted was memorable and strong. So here’s the question – if the insight for the Dairy Milk Gorilla campaign were to have originated from the grey matter of either Golding or Trott, which would it be?