The Rise of Programmatic Marketing

Posted by Eric Scism

While new marketing platforms come and go, I think it is safe to say that programmatic marketing is here to stay. In my opinion, we will continue to see programmatic marketing break down barriers of entry to the technology and provide new methods of successful targeting for marketers to reach their desired audiences.

Programmatic marketing is the purchase and sale of ad space in real time based on selected targeting parameters provided by the vendor. During this process, software and/or vendors are used to automate the buying, placement and optimization of media inventory through their platforms. The closest equivalent to programmatic marketing is buying stocks on the open stock exchange. At any given time multiple individuals are trying to buy the same shares of stock at a set price, but not all of the orders get fulfilled. When they don’t get fulfilled, the buyer either moves on to another site or bids at a higher price for the next impression that fits their target profile. That’s the ‘programmatic’ behind it. It’s all computer based and algorithmic, and it happens in real time.

Why do I say programmatic marketing is on the rise? Well, the numbers for one. According to ZenithOptimedia, programmatic marketing forecasts are set to grow by 31 percent this year and the Dun & Bradstreet Report suggests that nearly 70 percent of B2B marketers will increase their spending in this area in 2017.

Secondly, we are starting to see a significant rise in programmatic opportunities from vendors. Personally, it seems like I am receiving more unsolicited emails and phone calls from programmatic vendors this year than the last two years combined. This tells me that that getting into a programmatic platform will prove to be easier for even the smallest accounts. For example, some vendors are now now reselling Google’s DoubleClick platform, a service that has historically been incredibly difficult to come by. A year ago, a company would have to go directly through a rep. But these days there are self-service vendors who allow you (almost) complete control of your programmatic buys, allowing for more users in the industry to have access to programmatic technology.

However, the technology itself isn’t what’s luring users into spending more on programmatic buying. We (marketers) are being marketed to by these vendors. We are being sold on the idea that this technology is going to allow us to reach the precise audience that we’re trying to get in front of. So, it isn’t really the technology that we’re after (although I do get pretty excited about cookies and pixel tracking!), it is the fact that we believe we are finally able to reach this incredibly specific audience or niche that we have been struggling to reach for years without wasting media dollars.

Programmatic is built on the premise that you are buying the target or the person, not the site they are viewing. Which makes total sense, right? If you have done your due diligence in strategic planning and created your ideal personas, then this should be like shooting fish in a barrel. You should simply be able to log on to your programmatic platform and reach that persona. Say I want to target Suzy, a 28-year-old female who is interested in wine, loves dogs, rents a two-bedroom house, and drives a VW Jetta. Boom, you’ve just created a campaign that reaches her and all of her Suzy-like friends. Press “Go” and start printing money for your clients.

That leads me to my next question. Does programmatic actually work? Or is it all smoke and mirrors? It is a common question asked daily online. If programmatic buying is increasing 31 percent this year, then something has to be working for the people using the platforms, right? I know if we’re going to recommend increasing a channel’s budget by 31 percent, then that channel had better be outperforming everything out there. Personally, I haven’t seen any studies that really drive home the fact that programmatic is outperforming other digital channels. But let’s be honest—if you found a secret sauce would you shout it out to the world in a blog post? Probably not. I think programmatic works just as well as all other digital channels if you give it the love and attention that it needs. What’s great about programmatic is the ability to test and refine almost instantly. You can create campaigns or segments to deploy and know within hours if they will help reach your client’s goals. In that sense, yes, I think programmatic is working.

Because the barriers are coming down and now more brands are playing in the programmatic waters, budgets are increasing. With the increase in budgets and users entering this space, there will be an increase in the cost of inventory. As with every new technology, there will be a saturation and maturation point where the budgets begin to even out and marketers will start to find new emerging technologies to test. Just spit balling here, but I am thinking something like holographic carrier pigeons that fly around IP-targeted lunch tables and ‘deliver’ ads on the tables. It would be up to you to click them or not. In all honesty, programmatic is here to stay and it is only going to get better. The more competition, the better the technology gets and the better we are going to be as digital marketers.