by Gill Moodie (@grubstreetSA) If you’re a media planner you probably know something about programmatic advertising – the next big thing in online – and are wanting to understand it more. If you’re a digital publisher, you fear it because it looks set to drive down ad revenue and take it out of the hands of your ad sales team.
Which is why the South African branch of the Interactive Advertising Bureau (IAB) are planning to run a range of courses on programmatic advertising, targeting advertising students, agencies, marketers and publishers. This is being driven by the IAB’s new head of innovation, Mike Carter.
If you don’t know what programmatic advertising is, think Google Ads or Facebook advertising campaigns. If you’ve ever been followed around the web by Zando ads because you checked out a pair of shoes on the site, you’ve been “re-targeted” in programmatic speak.
Carter told Grubstreet last week that there are huge knowledge gaps when it comes to programmatic. Understanding real-time bidding is one thing but there is also a need for strategising around programmatic.
“For instance, one needs to ask what tools do we need and how can we increase the CPM (cost per thousand) value of the user,” Carter says. “What data is required? What do we need to get into this space?”
Just as digital publishing is becoming more about data and audience analysis, successful programmatic buying 
demands more knowledge and more comprehensive, deeper data on audiences.
One of the key aspects of programmatic advertising is that it can follow you around online so that, for example, if you’ve got as far as the checkout page of an e-commerce site, the website will know you’re a committed buyer and it is worth serving ads to you elsewhere.
“Today people talk less about real estate and more about audiences,” says Carter. “If I’m 18-24 year old who’s interested in soccer, that’s not the only thing I’m interested in. You’ll find me elsewhere on the web (besides football sites).
“Technology allows you to drop pixels into your site that can actually register what the user journey and behaviour is. For instance, if I go check out prices of first-class tickets to London and get to the shopping cart but decide I’ll do this later or I’ll check prices on another site, there is the ability to re-target me and pull me back into the conversion tunnel.
“Re-targeting is interesting. If I’m buying first-class tickets to London for me and my family, I’m obviously a high net worth individual and I did get quite a long way through the conversion tunnel so it’s worth trying to convert me. The utopian situation is to send me an advert that will offer me West End theatre tickets or car hire for three days or for free to get me to convert.”
Richard Lord, associate media director at The Media Shop, says publishers should not fear programmatic advertising.
“It’s not here to replace what we’re already doing,” he says.
Traditionally, media planners get a brief from a client, a target audience and a budget, he explains. “We then would have chosen websites where we think we can reach those people. For example, if there is a business banking product I would look at Fin24 because I make the assumption that the majority of Fin24’s audience are business people and they would be interested in a business banking product.
“What programmatic does is that instead of me making an assumption of an audience based on the content, I can now find businesspeople online wherever they may be. We know that businesspeople are not only reading business news. They also have special interests. They might be golfers or mountain bikers. They might glance in at general news websites. So programmatic literally allows me to follow them around the web and show them ads.”
Dealing directly with publishers still key
Programmatic may be a more efficient means of buying ads but it doesn’t mean that media planners are going to stop dealing with the publishers directly, Lord says, because one wants to have brands associated with particular environments.
“We want both… And programmatic still has to buy the inventory from the publishers. But what it does say to the publisher is: ‘You can no longer dictate the rate’.
“If publishers are scared of programmatic and don’t make any inventory available it,” Lord warns, “then the media planners are going to buy the inventory elsewhere.”
Publishers always have excess inventory, he says, so programmatic allows them to make money on unsold inventory.
“Whether you like it or not, it’s happening,” says Carter. “It’s a case now of asking: ‘What are the right tools to use and why are we using these tools?’”
Carter believes that it’s better for SA publishers and agencies to harness programmatic rather than allowing their inventory to move offshore with US-based giants such as Google and Facebook.
Ring fencing inventory
“The question is how do we protect the assets that we have in South Africa,” says Carter. “How do we ring fence inventory? And the Holy Grail is how do we increase the CPM value of those audiences? We can only do that by understanding who those audience are and having deeper information around those audiences.”
Programmatic requires a cultural change among agencies and publishers’ sales people because it challenges them to think more creatively, he says.
“I don’t need someone to come see me (as an advertiser) about a banner ad. That can be automated as far as I’m concerned.”
However, a digital publisher can, for example, go to BMW and ask what the key priorities are.
“If they say we’ve got to get 4 000 test drives in the new BMW, the publisher can do away for two weeks and looks at all their assets: can they create events and big premium sells like site takeovers with programmatic running – not just on their site but on the lower tiers as well? Maybe there are audiences that are aligned with BMW like ‘Mountain Bike Monthly’.
Ecosystem of advertising
“Then you drop pixels on the landing page where you’re driving the audience to. So you’ll be able to ask: ‘Did they fill in the form (for the test drive)? Can we chase them?’ It’s a whole ecosystem; not a stand-alone piece of tech.”
The complexity of programmatic advertising is matched by the amazing things you can do with it – you can run a game inside a banner ad, for example. But Carter warns that in SA, it is important to cognisant of tech take-up and cost of data. Many South African have feature phones rather than smartphones, for example.
“You can get carried away be all the bright lights but it depends on who you want to talk to. If you want to talk to someone who drives a BMW, then go the bright-lights route because they will probably have a smartphone and tablet and disposable data. If you want to sell funeral policies, then do a simpler campaign.”
Mike Carter’s useful links on programmatic:
- Criteo is a “personalised re-targeting company” that works with internet retailers to serve personalised online display ads to consumers that have previously visited the advertiser’s website: http://www.criteo.com
- Programmatic Summit held in Cape Town end of last year with international and local speakers: http://www.chargeads.com/#events
- IAB videos/documents: http://www.iab.net/events_training/digital_simplified
- Advanced programmatic for buyers and sellers Training: http://www.iab.net/events_training/seminar/advancedprogrammatic_DC
- Understanding programmatic digital advertising: https://www.youtube.com/watch?v=86qHw2w0rPc
- Programmatic 101 webinar: http://bcove.me/3x8mzyl1
- Top 10 things on programmatic from a recent event: http://www.iab.net/iablog/2014/11/top-10-things-you-need-to-know-about-programmatic.html
- Programmatic overview and terminology: http://www.iab.net/media/file/IAB_Digital_Simplified_Programmatic_Sept_2013.pdf(we are in the process of updating this)
- Programmatic: sales-force issues: http://www.iab.net/media/file/IABDigitalSimplifiedProgrammaticSalesCapability.pdf
- Programmatic: need for transparency: http://www.iab.net/media/file/IABDigitalSimplifiedProgrammaticAdvertisingTransparency.pdf
South Africa’s leading media commentator, Gill Moodie (@grubstreetSA) offers intelligence on media, old and new. Reprinted from her site Grubstreet with Biznews. This piece was published first on Journalism.co.za, the website of Wits University’s journalism school.
— MarkLives’ round-up of top ad and media industry news and opinion in your mailbox every Monday and Thursday. Sign up here!