PROGRAMMATIC ADVERTISING IN A NUTSHELL

Global digital marketers are choosing Programmatic – are you ready to follow their example?

Over the last four years, the digital advertising world has seen an explosion of programmatic ads – online display ads placed using a combination of artificial intelligence and real-time bidding.

More than 60% of global digital display advertising will be made up of programmatic ads this year. In the United States, the biggest market for programmatic advertising, this represents a total spend of $22.10 billion.  While this automated strategy of targeting and reaching customers is the norm in countries like the UK and growing rapidly in the Asia-Pacific and Latin America, digital marketers in South Africa are still struggling to understand the technology.

Jessy Severins, Ad Operations and Yield manager at eBay Emerging Markets and Gumtree South Africa, explains how it works.

What is Programmatic Advertising in a nutshell?

Programmatic advertising is a way of getting rid of the administrative slog of buying digital advertising, while still maintaining the ability to buy the exact impression (i.e. view) they want from the customer they want to speak to. It’s a means of making advertising more relevant to the consumer.

What do you say in response to criticism that banner advertising is becoming less effective?

New research into the “banner blindness phenomenon” show that low click-through rates aren’t a testimony that banner advertising doesn’t work, but rather that digital advertisers aren’t targeting web browsers correctly. Web users naturally tune out information that doesn’t provide them what they need, so the frequency of irrelevant ads (1700  per user per month!) has only contributed to the problem. Programmatic is a means of providing users with ads they actually want to see and this is particularly true for an information-rich site such as Gumtree.

How so?

The effectiveness of any platform as a digital advertising vehicle lies in data. Gumtree has the ability to target extremely narrowly, using psychographic information. For example, we can not only target individuals according to the items they are viewing (e.g. cars) but according to the price range they are considering. There is a huge difference between an individual looking to buy a 5-bedroom house and one who is looking at student digs or a room to let. If someone has R5000 to spend on a secondhand smartphone, we know that he or she probably does not have an existing cellular contract but could definitely afford one. This way, you are targeting individuals who are ready and able to buy your product or service.

What is the secret to successful campaign?

Collaboration between the advertiser and the platform is crucial. The advertiser knows who their typical customer is. They know what car he or she drives, where they live, what they enjoy and what they need. The platform knows where to place banners so that someone matching that profile will find it. Combining those two data sets in order to reach the campaign target is crucial.

How does launching a Programmatic campaign work in practice?

The easiest way to get started would be to get in touch with us to set up a deal or opt into a private auction. Tell us your objectives and target (e.g. to complete a call back request, visit an e-commerce site or simply click on the banner) and we’ll set up a customized inventory package accordingly.

With Programmatic Advertising, you can choose between a private auction or a preferred deal. Which is better?

It would depend entirely on your objectives. A preferred deal is really a fixed price agreement, during which an impression goes to the AdExchange so buyers don’t need to outbid others. They get a first look opportunity for the selected impressions.  You are certain of how your budget will be spent, so it’s a good option for someone with a set budget and CPM.

A private auction delivers higher quality impressions, but you are bidding against other buyers. We’re happy to advise clients according to their needs to make sure you get the best value for your spend.

Globally, Programmatic is becoming the norm. How has the uptake of Programmatic been in South Africa?

The market is still in its infancy and unfortunately there is a dearth of skills, which means that few publishers are using the data at their disposal effectively. Additionally, many agencies aren’t performance-driven as of yet and approach digital advertising the same way that broadcasters do. They cast the net really widely – making assumption about the readership of a platform using a metric like LSMs – which leads to wasted impressions and irrelevant ads being shown to browsers. Effective advertising isn’t a numbers game; we should aim to deliver conversions – not just impressions.

Where do you see digital advertising going over the next 10 years?

Advertising is only going to get more and more automated. Some publishers in Europe are already 100% programmatic and do not even run IO-based campaigns. In order for this to happen, publishers need to make sure they can offer the right inventory for a campaign, and advertisers need to know where to find it.

What are some of the mistakes advertisers should avoid when it comes to digital advertising?

Don’t take the easy route of bidding on an open auction or just sticking a banner on a high-traffic site. The biggest assumptions advertisers make about their target audience is platform-related. Shift your focus from which website you should be placing your ads on to one that focuses on which audience you want to reach.

If done correctly, digital advertising can speak to the exact person you want to target – so don’t just aim for eyeballs on your banner, aim for results.

Jessy Severins can be contacted on jseverins@ebay.com.

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