marketingin the programmatic age · like dataxu make per & ... new paradigm for the marketer....

Marketing in theProgrammatic Age

ROUNDTABLE SERIES

DALLAS

DETROIT

number of peopleregistered

374

209 186LA

CHICAGO

NYC (X2)

6 EVENTS ACROSS 5 CITIES OVER 4 MONTHS

62.3average number of

registrants per event

number of senior level registrants

number of companies represented

300 trillion bytes

amount of data that programmatic marketing platforms like DataXu process per day (reaching 99.9% of the internet for brands, agencies, and publishers)

billion

2017300 Million

WHAT'S DRIVING THE INTEREST IN PROGRAMMATIC?

300 number of brands and agencies that say they've achieved mastery of programmatic marketing (yet)

B R O U G H T TO YO U BY

approximate number of companies in the programmatic marketing ecosystem

$30

estimated number of publishers

available through ad exchanges and

APIs

number of decisions programmatic

marketing platforms like DataXu make per

second&

Brands98

AGENCIES88

estimated size of the programmatic marketing industry in 2017 (up from $8B today)

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Marketing in the Programmatic Age

ROUNDTABLE SERIES

BROUGHT TO YOU BY

IN THE

WORDS OF THE

MARKETERS

2

www.dataxu.com www.bdionline.comDataXu

MARKETING IN THE PROGRAMMATIC AGE ROUNDTABLE SERIES: IN THE WORDS OF THE MARKETERS

Business Development Institute

In Their Own Words: Marketers Share What They’ve Learned through Hands-On Programmatic Marketing Given all we see and hear about programmatic marketing these days, one can be forgiven for believing that it’s a mature technology, with an abundance of experts in every facet of marketing and advertising. It is, after all, poised to become a $30 billion industry by 2017.

Sometimes numbers can be misleading. Though programmatic marketing has seen phenomenal growth, it’s still very much a nascent industry. Marketers, we’ve discovered after a series of roundtable discussions across the country, have seen enough of its benefits that they don’t want to wait on the sidelines for a class of experts to emerge. Nearly all are taking a ‘learn-as-you-go’ approach, and they’re quite comfortable doing so (even when that means asking their organizations to take some risks).

Still, bring enough “newbies” together to talk about their experiences with programmatic and a collective wisdom is bound to emerge. We’ve recorded countless hours of frank and honest panel-led discussions covering 30-plus topics, and distilled them into learnings and best practices contained in this report.

Who are the experts we tapped? They’re your peers:

• 6 events across 5 cities in 4 months (NYC, Chicago, LA, Dallas, Detroit)• 374 people registered• Average of 62.3 registrants per event• 209 registrants were senior level (director and up)• 186 companies represented• Of those, 98 are brands, 88 are agencies

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What Is Programmatic Marketing? “Programmatic is the modernization of media.” (Major Entertainment Company)

“Today’s programmatic technology is capable of doing much more than we understand how to get out of it.” (Major Entertainment Company)

We asked our panel members to explain just what programmatic meant to them and their organization. While operational efficiency is very important, its value is trumped by other, more strategic benefits that are transforming marketing process.

• Customer Engagement through Content Optimization. With its highly relevant content, created and delivered with precision at the individual consumer level, programmatic marketing breaks new ground in customer engagement. Many panelists say they’re learning how to use the technology to fine-tune messages, and to deliver a seamless brand experience across channels and devices.

• Media Learnings Yield Better Campaign Execution. Programmatic focuses on audience targeting and segmentation, so marketers can buy ‘people’ rather than placements. Its inherent closed loop feedback lets marketers optimize campaigns on metrics that are important to their organizations. The campaign insights helped the panelists learn about their audiences, and optimize their marketing initiatives over time so they deliver better performance. Most interestingly, programmatic makes them savvier marketers.

• The Necessary Scale to Support Future Growth. Programmatic helps marketers achieve a scale that’s parallel to TV, and is a superior tool for brand managers seeking to message to a wide audience. Panelists envision a (near) future where programmatic will play in all channels, including radio, OOH and television. More than that, with accelerated audience fragmentation, programmatic may become the only way to reach a desired audience at scale.

• Efficient Technology for Seamless Customer Experience. Programmatic trading is valued for its “frictionless transactions.” Panelists appreciate the freedom from the manual burdens of the direct sales I/O and optimization processes. And they appreciate the ease with which they can deliver a seamless customer experience across channels and devices.

• Programmatic Serves the Marketer. It’s the marketer who decides the optimal approach for delivering products to market; programmatic provides the opportunity to execute on their plans more quickly and efficiently. As a result, programmatic is elevating the role of the marketer and the role of marketing within the organization.


www.dataxu.com


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How Do You Use Data and Insights? “Data doesn’t lie. We use it to improve and understand the broader picture – the positives and the negatives.” (Large Auto Maker)

“There’s so much rich data available through programmatic marketing … trying to figure out exactly what to do with it is a major challenge.” (Independent Agency)

“It’s a challenge to get people to adapt to programmatic, but once they do, it’s like a drug. They want it all of the time. The insights are the human part of the data, and used to determine the next step.” (Major Entertainment Company)

The age of Big Data is upon us, and nowhere is this felt more keenly than in programmatic marketing. Today’s programmatic marketing platforms can process 30 terabytes of data each day – reaching 99.9% of the Internet for brands, agencies, and publishers. What does that mean for brands, agencies, and publishers?

• Accelerate Market and Audience Research. Insights are a huge part of programmatic. What used to take a year to accomplish via research panels can now be attained in just a few days or hours. And the insights learned can be applied throughout the organization, including all content development, offline media development and even product development.

• Test and Learn. All marketers have an idea of who their target audience is going into a campaign, but programmatic’s data collection, analytics, and audience segmentation capabilities let them test their assumptions. Panelists strongly support a test and learn philosophy on an iterative basis – a new paradigm for the marketer. Programmatic provides much needed flexibility, which is essential in today’s environment. Consumers change behavior over the course of minutes, so an annual marketing plan just isn’t that useful anymore.

• Identify and React to Changes in Real Time. Analytics provide marketers with the opportunity to inform and improve campaigns immediately. Programmatic marketing uniquely identifies online habits and emerging behavioral trends. By looking at online behavior, programmatic platforms can create look-alike models in real time to identify new pools of prospects. Example, a marketer representing an automaker used prospecting to find pockets of interest in DMAs where the company lacked dealerships. As a result, company leadership is considering opening new dealerships in the area.


www.dataxu.com


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How Do You Measure Success? “Kill CTR as a metric. It’s an Achilles heel and is inversely correlated with ROI.” (Well-known CPG Company)

“Don’t look at programmatic advertising in isolation … it’s a huge opportunity to push your overall goals and metrics a lot further.” (Regional Financial Services Company)

“You can’t optimize what you can’t measure.” (DataXu CTO Dr. Bill Simmons)

Albert Einstein once said, “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question; I could solve the problem in less than five minutes.” Sage advice for all marketers.

• End the Love Affair with CTR. The CTR isn’t particularly correlated to performance (and is often reversely correlated). The panelists warned of the dangers of using CTR as a default metric. And while reach and frequency are next best to CTR, they’re hardly optimal either.

• Define Success. Panelists seconded Mr. Einstein’s advice to ask the right questions (i.e. KPIs, benchmarks) in order to define success. This is no small matter; digital has flourishedprecisely because it can be measured. And take care to ensure that the KPIs and benchmarks used are specific to the campaign (e.g. tactics, client, message to consumers).

• Tie KPIs to Specific Campaign Objectives. Establish KPIs that directly measure consumer action the marketer wishes to drive, and measure against them. For instance, if engagement is a key objective, track and measure how and where consumers are engaged (e.g. configuring a car online). The approach requires marketers to understand where and how the consumer interacts with their brand, and to define what a successful engagement looks like. Key questions include: What is the impact on the marketing process? How should the KPIs inform material/creative development? What are the drivers that prompt consumers to act?

• Adopt a Holistic Approach. With programmatic marketing, digital channels no longer need to be used in silos. That means marketers need to look for a common ground (e.g. metric) that can measure display, social, search, mobile and video to show how the overall campaign fits together and performs. And that’s just the beginning, programmatic will soon incorporate OOH, radio and television. The new metrics required aren’t quite what marketers are used to, but they need to embrace them.


www.dataxu.com


6




What Does Transparency Mean and Why Is It Important? “Clear is the new black in programmatic. Demand it from your partners, because they’re not all equal. Conduct audits or tests to confirm they can deliver on the rhetoric.” (Large Manufacturing Company)

“[An agency] suggested we use their trading desk, but why should I add another layer of fees? We didn’t see much added value from the additional agency layer, with added time and cost for us.” (Major Entertainment Company)

What do marketers mean when they talk about transparency? “Transparency” has become a malleable term that programmatic media and ad technology companies use to convey a relatively broad set of promises. So we asked marketers to explain in their own words what they look for, and why it’s important to them.

• Transparency in Spending. All campaigns are accounted for at the individual level. With tight budgets, marketers need to know exactly what they’re spending on, and whether or not it’s working.

• Client Accountability. Programmatic allows agencies to steward client investments with confidence. To instill confidence, agencies need to explain what they’re doing and why, as well as what defined success. To provide this level of service to clients, agencies must know exactly where ads ran, what worked, and how the agency directly contributed to the success of the campaign.

• Publisher Valuation. Programmatic enables marketers to value the publisher inventory in concrete market terms – what it’s really worth on an impression level - rather than what the media salesperson says it is (which may be inflated).

• Overall Industry Performance: B- to C+. Generally speaking, the panelists felt that when it comes to transparency (i.e. placement, pricing and performance), the industry has plenty of room for improvement. As for placement, marketers want more transparency concerning viewability and audience reached. In terms of pricing, marketers want to move away from opaque pricing and know when ad network arbitrage is at play. As for performance, buyers and sellers need to share performance metrics and generally be on the same page when reporting results.

• Transparency and Third-Party Data Providers. When it comes to third-party data providers, marketers have lots of questions. How do these providers obtain the data they sell? How recent is it? Are audience segments created based on multiple data points? Are segments verified? Are they reselling the marketer’s own data?


www.dataxu.com


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What Should the Structure of the Programmatic Organization Look Like? Many agencies and brands are considering bringing programmatic marketing in-house. In addition to cost efficiencies, self-serve programmatic gives marketers and agencies an up-close and personal view of their audience. Given it’s a nascent industry – meaning there aren’t a lot of examples to follow – we asked the panelists to describe how they envision a programmatic organization.

• New Skillsets and Inclusivity Required. Programmatic requires new skills in campaign optimization, management and data analysis. These skillsets are needed to help explain the value of programmatic to key stakeholders. In the case of holding companies with trading desks, structure is an issue. There’s no sense in keeping account teams and trading desks separated, because the programmatic activities need to be tied to the ultimate campaign strategy. The same can be said for IT and data. For programmatic to work, resources should be centralized.

• Recognize and Address the Four Phases of Programmatic. They are:

1. Educational/Strategic – What is programmatic marketing and how does it help you meet your business goals?

2. Organizational – What is the right mix of human and technology resources?3. Tactical – How do you best implement programmatic?4. Optimization – How do you continuously improve and refine?

• Invest in the Right Technology. In addition to the right organizational structure; successful creative messaging and outcomes rely on the right technology platform. Many brands haven’t yet figured out the right technology stack, and it’s becoming a critical issue. Some are pondering the arrival of a new position: Chief Marketing Technical Officer as marketing automation takes on greater importance to the organization as a whole.

• Needed: Chief Programmatic Advocate. Programmatic marketing needs an owner who will advocate for the resources, FTEs and technology it needs to thrive – or risk failure. Marketers and their peers need to consider how to structure their organizations and departments – and the roles they need – so that programmatic marketing can succeed.


www.dataxu.com


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What Is the Role of the Brand and the Agency? (Hint: It’s Strategy & Human Touch)

Though programmatic automates marketing, it doesn’t eliminate the need for the human touch. Marketing is still about telling a great story, and creating messages that resonate with consumers. Moreover, people are still needed to define marketing objectives that meet business goals. And by the way, programmatic provides people more time to devote to these strategic, higher value activities.

• Develop the Programmatic Mindset. Media agencies need to take the lead with setting the proper frame of mind, debunking myths, and educating brands on the true potential of programmatic. Particular emphasis should be placed on the value of upper-funnel metrics, which aren’t always directly attributable to sales, but are nonetheless vital to growing the business and ultimately surviving (and thriving).

Moreover, agencies can add value by helping brands understand how to plan and leverage data/intelligence. Audience segmentation is more important than ever; programmatic lets marketers test multiple objectives.

• Upfront Strategy Development. Marketers (and the agencies that serve them) need to identify all the opportunities for their brands to intersect with the consumer. This exercise must be done upfront, so that going into a campaign; it is possible to optimize across channels across all brand-consumer intersection points

• Content and Message Delivery Strategy by Audience. Programmatic marketing is much more than a media tactic; it’s a strategy for reaching exact audiences. Marketers need to develop appropriate content - branding and direct response - and messaging tactics upfront in order to resonate with each consumer type touched in a campaign.

• Get Customer-Centric. Despite the rhetoric, marketers still aren’t good about aligning messaging with the customer journey. For example, B2B consumers make their way through 70% of their buying cycle before contacting a vendor. Working with agencies, marketers need to target and message different people at the various stages of their journeys.


www.dataxu.com


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What are Benefits and Opportunities of Programmatic Marketing? “Programmatic puts the buyer back in control. It removes the middle man, and lets you learn as you go.” (Multi-national CPG Company)

“Programmatic requires more variety of content and creative investment. But, you’re talking to smaller sets of people; you get closer to 1:1 marketing.” (Major Retail Company)

• Powerful Tool for Accomplishing Marketing Objectives. Programmatic provides access to data and optimization that just isn’t available manually. This has led to a fundamental shift in how marketers spend their time; relieved from manual tasks, they now have more time to focus on strategic marketing objectives.

• Assign a Value to Every Impression Purchased. Programmatic marketing means marketers no longer need to buy bulk media packages. Marketers can use it to quantify every impression from an ROI perspective. The result is less waste and more effective use of budget.

• Audience Insights Deliver Increased Efficiency. Programmatic provides marketers with an understanding of their audience, when to message them, and at what price. Marketers can also leverage the technology to test whether creatives will resonate prior to producing high-cost TV commercials and other media ads.

• More than the Sum of its Parts. The more programmatic marketing is used, the more powerful it becomes. Programmatic lets marketers optimize across digital experiences, including mobile, search and display.


www.dataxu.com


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Best Practices for Becoming a Programmatic-Focused Organization “With programmatic marketing, your go-to-market approach completely changes. Don’t assume your old KPIs still work. Go back to your ultimate goal to determine your approach.” (Major Beverage Company)

“Think of programmatic not just as way media is bought, but as a way to engage consumers more efficiently. If you do that, you’ll always make the right decisions.” (Large Retail Company)

We asked our panelists to imagine advising their peers in other marketing organizations who are considering programmatic marketing. What advice would they give when adopting for the first time? Here’s what they told us:

• Make a Long-Term Commitment. Programmatic requires dedication and work to make it successful, and to glean the marketing insight it delivers. Programmatic platforms can’t learn and deliver high performance from doing one campaign per quarter. They need plenty of campaigns to test and learn from.

• Think Like a Programmatic Marketer. Embrace your inner problem solver. Don’t get mired in the how; trust the programmatic technology to tease out insights that can’t be identified manually. For instance, look for nuances in the data signals to point to secondary audiences, or geography that weren’t targeted previously. Use it to validate (or disprove) assumptions.

• Set the Stage for a Programmatic Organization. Changing the mindset of the marketing team and marketing infrastructure are two of the biggest obstacles you’ll face. Most internal infrastructures were built up over time based on a variety of decisions, habits and needs – all of which you need to change.

• Embrace Big Data. Choose a programmatic platform that can ingest as much data as possible, as well as a wide variety in data types, including first party, second party, third party, and campaign and media data.

• Don’t Assume Private Premium Deals are Best. There’s a lot of hype around private premium deals with publishers at the moment, but keep in mind that it’s just one buying model. Marketers have a variety of buying models now, including direct buys with programmatic decisioning, private exchanges and open exchanges. Each offer unique benefits and you should choose based on the specific goals of your campaign.


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Best Practices for Becoming a Programmatic-Focused Organization (cont.)

• Think Evergreen for Programmatic Campaigns. The always on, programmatic story telling approach allows marketers to talk to consumers wherever they are in the funnel, and make real-time changes to improve engagement using stated and observed preferences as needed.

• Adopt an Integrated Stack or Platform. Customer-centricity is easier to achieve with a single, clean view of the customer. An integrated stack/platform can help deliver the seamless experience customers expect across devices.

• Eliminate Buying Constraints. Adding too many data layers and multiple white lists can prevent you from getting the scale you need. Trust the programmatic platform to perform this work for you. The data and technology can determine who the right audience is.

• Ask Questions. Select a programmatic platform provider that is willing the share its expertise with your staff. Lean on your agencies and partners. Ask lots questions and don’t be afraid to experiment. Start small, and test and learn. If it fails, learn from it. If it works, go bigger.


www.dataxu.com


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What’s Next? DataXu plans to kick off the second roundtable series in September (through December), taking a deeper dive into the evolving world of programmatic marketing.

We’ll make six stops in cities including Chicago, New York, and San Francisco. The final schedule will be posted at www.dataxu.com and www.BDIonline.com late August 2014.

Care to share your input or participate in an upcoming roundtable? Email Denise Vardakas-Styrna at [email protected] or contact Steve Etzler at [email protected].


www.dataxu.com


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