Programmatic campaigns increasingly popular on the European market
In the last two years was a soar in figures associated with programmatic marketing. A particular increase was observed in Central and Eastern Europe. What does the automation of marketing campaigns involve and what is the future of the advertising market? By Weronika Ośko, agency business development EMEA director at Gemius.
According to a 2015 report by IAB Europe, on the European market the share of programmatic advertising displayed on PC monitors is up to 39.3 per cent. Mobile advertising is not far behind (27.3 per cent) and, in the course of barely a year, the share of video format advertising has doubled (12.1 per cent). The most spectacular growth occurred in Central and Eastern Europe. What does this data mean for advertisers and publishers?
What is programmatic marketing?
The basic elements of programmatic marketing are very modern and efficient tools allowing quick access to the client, and all thanks to auctions taking place in real time – real time bidding (RTB). All activities are fully automated, thus eliminating the mistakes usually made in campaigns created with the participation of the human factor. The algorithms learn how best to optimize campaigns. The scripts should already be placed on the client's website two weeks before the start of the campaign. The first weeks of a campaign may seem inefficient – what should you do then? You have to wait.
Practice shows that campaigns achieve the best results after the second week of running. Based on the accumulated knowledge of the characteristics and needs of clients, extremely successful campaigns can be created, and their effects can be monitored and optimized on an ongoing basis. In addition, before the start of the campaign we define tactics which, thanks to specific algorithms, should optimize traffic. Let's take a look at a few examples:
- Prospecting – uses so-called thin data to maximize the chance of the conversion of new users on the website. The system searches for users behaving in a similar way and builds the target group on this basis (look-alike modelling).
- Re-targeting – targeting users who have already visited the client's website. The internet user has already seen an advert for a given product, has had contact with it, and is then sent this advert again.
- Facebook exchange fbx – retargeting or targeting based on 3rd party data via FBX. The system is used to reach Facebook users.
- Contextual – a variety of prospecting tactics. The system scans the content of a given website and selects users or advertising on this basis.
Facilitating the buying and selling of adverts online
Programmatic marketing simplifies the purchasing system of advertising campaigns for both the advertisers and the owners of advertising space, and everything takes place in just 100 milliseconds. An advertiser can independently purchase a desired space, giving the minimum and maximum price setting, along with information on the campaign objectives. The most effective strategy is to select one objective for the campaign. A publisher can sell a space to many clients based on an auction system and being connected to not one, but multiple platforms, e.g. Rubicon, Pubmatica, or OpenX. This solution makes it possible to juggle resources. It is worth noting that the times of selling space "blindly" are long gone; RTB offered the possibility of premium purchasing. The next step was the creation of Private Market Place solutions, based on a direct approach to a specific publisher and their specific space (placement).
Another interesting concept is the formation of associations such as the Czech Publisher Exchange, and the Hungarian Hoppex, which are meant to protect the local market for publishers but also supply more data to advertisers, e.g. through segments created by Adobe Audience Manager or other data segregating tools – this model is conducive to purchases being made by a certain target group. You can find more information on this topic HERE.
Advertisers can easily track the effects of their campaigns, as well as check traffic generated. Modern technology means that reaching the selected client becomes easy and does not require the efforts of many people. Everything happens completely automatically. Processing large amounts of data means that every bit of content reaches the right recipient. The personalization of creations is based on the characteristics or desired behaviours of internet users. The whole system is based on 1st and 3rd party data. With this information, it's possible to conduct user segmentation based on their behavioural traits, behaviours, purchasing intentions and similar factors.
Does programmatic marketing involve risks?
Some advertisers may see it as a problematic situation in which they don't have full control over where their content is presented. Here, too, a solution is available, in the form of Brand Safety. There are several levels on which advertisers can protect their brand. I don't just mean avoiding gambling and pornographic sites, but also scanning text so that airline adverts don't appear next to a plane crash, and Pepsi products don't appear next to Coca-Cola adverts.
Doubts may be raised in relation to the issue of fake traffic, which lowers the efficiency of the programmatic creation. This problem is countered by Fraud Free guarantees; most companies also work with DoubleVerify, whose Fraud Lab team continuously monitors the Internet, or with companies such as Alenty, Integral Ad Science and Adometry. The results of this monitoring allow you to limit false traffic and increase campaign effectiveness. It's true that the problem can't be completely eliminated, but you can minimize the risk, bearing in mind that opponents are getting smarter and learn quickly.
Programmatic threatens traditional campaigns
Although this approach is relatively new, it already represents real competition for traditional marketing activities. In the USA and Europe, PM campaigns constitute a significant part of online budgets. Creations reach a larger, more appropriately selected audience. It's easy to plan this kind of campaign, based on the prediction modules, to preview the results, track traffic and optimize the campaign. This is because a model based on machines and algorithms is more efficient, without human errors.
The financial aspect is also of great importance – when they first appeared, programmatic campaigns were considered relatively cheap. Nowadays, looking at the results of campaigns, the costs can be thought of as optimal. When asked about average CPM, I'll put forward a few reports, but they differ depending on the tool, sector, segment and, of course, the country. The majority of Programmatic campaigns is based on CPM but advertisers may also do the purchase based on other pricing models: CPA or CPC. Thanks to automation, operation costs are also reduced, which is why this form of media buying is said to be cheaper.