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Programmatic buying needs to grow up

Programmatic buying has been the talk of the ad tech town for the past few years.

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With more and more advertisers realising that it gives them an efficient way to obtain control, scale and low costs, it’s no surprise that the popularity of the technique has sky-rocketed: today, it represents 17 per cent of total UK display ad sales and is expected to grow to 30 per cent by 2016.

But, in order to get more bang for their buck, advertisers need to make sure they’re taking a more grown up approach to programmatic buying. And, to do this, the use of data is key. Historically, advertisers have bucketed consumer data together to create broad audience segments, but this is just the very beginning in terms of optimising media-buying to deliver better campaign results. 

The ad tech ecosystem is very complex: every day, advertisers are presented with tens of billions of opportunities to bid for digital space on ad marketplaces and auctions take place in a couple of hundred milliseconds. Advertisers, Agency Trading Desks and those companies buying media through commoditised Demand Side Platforms (DSPs) are all trying to understand the value of consumer data and the best way to use it to achieve the results that this data revolution keeps promising to deliver. 

Pre-packaged audience segments with little granularity still lean towards a targeting level similar to verticalised channels on an inventory level. If they don’t get it right, most certainly a significant proportion of their budget is being poured down the drain.

From 'big data' to 'smart data'

To take a more mature approach to programmatic buying, there needs to be a shift from big data to smart data. Rather than using set algorithms to tar all consumers with the same formulaic brush, and serve them an ad that may or may not be relevant to them, advertisers need to realise the benefits of more granular-level targeting. By focusing on the quality, not quantity of data, they will be empowered to segment audiences down to an individual user level and target them more sophisticatedly.

Smart data enables advertisers to target consumers who have already shown intent to purchase; by taking the search terms they’ve entered into a search engine like Google, Yahoo! or Bing, or an on-site search box and serving them an ad that corresponds to those same keywords.  By also looking at the relationship between keyword phrases and time lag between actions (recency), more and more useful patterns emerge. This is known as Search Retargeting, a digital ad technique that is driving powerful change in the advertising world.

By focusing on specific data sets and audience segmentation right down to the individual level, advertisers can take advantage of a more mature programmatic buying model. This will help them to perform a more intelligent bid and serve relevant ads at the exact moment of intent; increasing the chance of conversion, and thus campaign performance and ROI.

Dominic Joseph is chief executive of Captify

This article was first published on mediaweek.co.uk

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