Programmatic buying is sweeping across the world of marketing and advertising, bringing with it new opportunities for brands to improve customer engagement, enhance media buying efficiency, and achieve better performance from their digital campaigns.

The world’s largest consumer brands – including the likes of Kellogg, Procter & Gamble, Netflix and Kimberley Clarke – have, for the past few years, shifted growing portions of their ad spend to programmatic buys. And this trend is only just beginning to shake up the market. Magna Global projects that the global programmatic ad market will grow from $12-billion in 2013 to more than $32-billion in 2017.

We’re starting to see this trend take off in South Africa, too, after a slow start. Drivers for adoption include a need for brands to make their advertising spending work harder and a growing focus on data-driven, customer-centric marketing.

Defining programmatic buying

Programmatic buying can be loosely defined as automated purchasing of ads to create efficiencies in the media buying process. Essentially, it offers advertisers the ability to buy display media on auction in a private network. These private networks sign up a range of advertisers, in much the same way as Google does for its display network, and then make ad inventory available to their clients.

Advertisers can thus buy inventory across multiple websites and publishers effectively and efficiently on a single trading platform. This saves them time and money, while allowing them to take advantage of a diverse selection of low-cost and premium advertising inventory from a range of publishers.

A good programmatic buying network can tap into rich veins of customer data so that brands can better understand consumers and what drives their purchasing decisions. This will help the advertiser to layer behavioural, contextual and audience data from multiple media buys within the same platform so that they can better understand their targeted customers. This means that it has access to the data it needs for better audience targeting.

The benefit that flows from this is that brands can advertise in more effective ways by targeting messages with a higher level of relevance to consumers, depending on who they are, their behaviour and where they are in the purchase funnel. These campaigns reduce wastage and give advertisers the ability to optimise spending across different channels according to their goals and budgets.

Another benefit of programmatic buys is that they allow brands to use integrated solutions across their media, data and technology environments. This helps them to improve reach and scalability across display, video, social and mobile, for example.

Programmatic buys in action

Programmatic buys are flexible enough to accommodate a range of business objectives. When a brand launches a new product, it will typically be seeking to achieve high reach and high frequency.

By using programmatic buying, it can set its frequency and reach parameters at the optimal levels for its budget. The brand can cap the number of impressions it serves so it doesn’t overspend.

Programmatic also allows brands to experiment with placements and optimise spending. For example, a brand could buy cheap inventory for a short period of time, and based on performance metrics, it could see which platforms are delivering the best results. It could then stop spending money on poor performing media and invest more in the top performing platforms.

The key to success is centring programmatic buying strategies on the customer journey – brands shouldn’t get too caught up in the technology. A good programmatic partner should take care of the tech for the brand so that its marketing team can stay focused on results.

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