Digital Media Strategy | Programmatic Media Buying

by Michael Hubbard on November 15, 2013

in Media

Programmatic Media Buying is defined as the automated process for which one can purchase display media advertisements via an online bidding process.  Typically, remnant inventory is placed on an exchange, in which technology such as Demand Side Platforms (DSP’s) or Trading Desks will Real Time Bid (RTB) on the data and available inventory.  Pretty simple – right?  Actually, if you can picture the stock exchange – you’ve got a pretty good idea of an ad exchange…  Well – this week I spoke at the Internet Summit, and I was given 15 minutes to expand on an “advanced digital display strategy”.  I can’t introduce myself in less than 30 minutes, and it usually contains 2 stories from the 80’s – but I thought, why not – this will be a challenge for me to deliver quality content on a subject I’m passionate about, and keep it short.

Like I said, I can’t introduce myself in that short of time – so here I am blogging about the 4 more hours I would have been on the stage had they allowed me to.

For those that missed the presentation, we used the above ad from Adobe to sum up knowing your data.

Just to quick recap my presentation, the IAB released a study showing that 85% of advertisers were currently utilizing programmatic media buys today.  Although we’ve been knee deep in it since its inception about 2 years ago – this stat shocked me when I read yet… If you check out the twitter stream from when I put the slide up, you’ll see it shocked the rest of the Southeast as well – but I still felt this was a great topic to provide some insight into some of my favorite strategies.  Strategies, in the programmatic media world can be as simple as Above the Fold outreach, or testing one site at a time – or ultimately whatever you want them to be.  My recommendation however is to keep best practice marketing principles in place, and make sure you are only testing one variable at a time.  That said – here are those favorite strategies we discussed:

  • White Listing.  Everyone knows that black listing a site is good- but with the amount of spam and bots and people trying to cheat the system, rather than try and stay a step ahead of the technology geeks, I like to create a list of sites that we will only run on (rather than guessing what ones to not run on).
  • Segment Targeting.  Ultimately, remarketing – but very specific and with matching (non-creepy) creative.  So if you know someone was shopping for your trial software but didn’t buy, don’t flaunt it at them (as most people feel big brother is watching), but maybe be a little more creative and target them next with a discount code, or a secondary offer that is a natural upsell in your sales funnel.
  • Private Exchanges.  We didn’t have time to speak much on this, but in essence, create a right of first refusal on a specific publishers site.
  • Not just for Digital.  Most people don’t realize that TV spots are now being purchased programmatically as well.

As we left the stage – there were a few questions that were asked, and although most of them focused on why I wasn’t nearly as funny as Kevin Pollack, there were still a few more that were worth repeating:

1)      What is RTB?  Real Time Bidding is the actual process of buying the inventory off of the exchanges.  You typically set a maximum price that you’re willing to pay (average CPM in 2012 was just over $3.00), but in most cases, you actually assign an ROI goal and you allow the trading desk technology time to learn your audience and then optimize toward your ROI.  This sounds like a lot of witch craft and voodoo, but the reality is, you’re no longer bidding on a websites banner ad inventory, you’re bidding on the data and the specific user.  For example, if I know that my audience typically surfs on sites A, B and C, and then comes to my website, and then goes back to website D, E, and F – then I’m going to be willing to pay a lot more money the next time I see someone that fits those similar trends.  So although CPM’s can be lower via RTB, we also have a lot of modeling where we bid much higher because our algorithms show us that this is more than likely to be a good audience.

2)      How do I get started?  Well – I really over-simplified this answer, but the reality is, there are a number of DSP’s who will allow you to license their software.  Like any other software license, there’s going to be a commitment and giving away your 7th born – but as you get deeper into this space, you will realize it’s worth the investment if you’re able to put the time into it.  Two other ways of getting started would obviously be to contract with an Ad Agency who specializes in media {insert shameless plug here}, or to work with a DSP on a managed basis.  One of the larger ones in the space is Rocket Fuel, and they recently did an IPO so you can get a feel for how much money they’ve invested in technology.  The thing I caution about DSP’s is that you still need to be very hands on with your data, and you need to know that the mark up is typically going to be much greater with a managed account – but the theory is also that your risk will be less as they’ve done it so often.

3)      Where can I learn more?  This one stumped me…  We’ve been hands on learning before a manual has even been written, so we’re real a test and trial, hands on knowledge – so the best thing I can say is to come out to the big data Triangle Interactive (TIMA) event on the 20th and ask a bunch of questions.  I’ll share whatever knowledge I can at that time!

Again – worth noting, I was speaking specifically to the buy side of programmatic media, and just know that there is an entire sell side to the programmatic that I didn’t touch on.  One of the bigger announcements was made in the last year when Federated Media announced they were terminating their sales team as a direct result of their programmatic sales delivering 89% of their annual revenues.  I don’t envy sales reps anywhere – but at the same time, just because there’s a lot of inventory to sell, doesn’t mean that programmatic is always going to be the best answer (full disclaimer, Media Two still manages a majority of our media buys via direct relationships).

 

{ 1 comment… read it below or add one }

Michael Tran November 25, 2014 at 6:00 pm

Hi Media Two Point,

I wanted to speak with you or someone in regards to offering some of our available inventory spots to air on our national network, Prime TV Network.

We just currently launched our first OTA station in Columbus, Ohio and are looking for a dynamic agency, such as Havas Edge to partner with on this great opportunity.

We are also in talks with Time Warner and WOW cable, to set launch with them this coming quarter.

I’m free for your direct call all day. If I’m not in the station, please do not hesitate to call the mobile number in the signature.

I look forward to speaking and working with you all.


Thanks again in advance!!

Sincerely,
Michael Tran
Media Producer

Direct: (562)-491-5542
Studio: (562) 491-5500
Fax: (562) 392-4699

http://www.primetvnetwork.com

Reply

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