Programmatic: Great For Direct Response, Bad For Branding

lawrence-herman"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Lawrence Herman, CEO at BlueLink Marketing.

It seems over the past year we’ve heard a number of creative agencies tout programmatic ad buying as the perfect answer to a company’s branding needs, enabling them to save money, create transparency and reach consumers with their message.

But frankly, I have never quite understood this line of reasoning.

Programmatic advertising is still a relatively young market and there are currently no statistics on how much of it is dedicated to direct-response advertising vs. branding.

But whether or not programmatic for branding is more dream than reality, I think advertisers are better off investing their time and effort into programmatic for direct-response advertising and not for branding. Here’s why.

A Moment In Time

Programmatic buying, in which automated trading systems are used to purchase a target audience rather than a specific ad placement at a specific time, is about exploiting a brief time window to get someone’s attention.

A company seeking to reach males 18 to 35 years old in major metropolitan areas, for example, can show these target audience members an ad when they are perceived to be online, based on what publishers know of their habits associated with their IP number. In many instances, an automated bidding process goes on at the very last second to determine which advertiser's ad will be shown.

That is a moment in which a consumer might be convinced to take a specific action that could lead to conversion. Let’s say a 30-year-old male is researching options for new car insurance and sees a Geico ad. He may click on the ad if he perceives it as relevant and, if the call to action is effective, he may leave an email address for further information.

This is specifically the kind of advertising that programmatic is best suited for. The advertiser has greater chances of success if the ad is related to a search action, the advertiser can specifically track whether the consumer clicked and, if so, whether they responded to the call to action. If he didn’t sign up, that could help make the advertiser smarter in the future as to what could improve response rates. Significantly, programmatic can provide these types of ads much more cheaply to advertisers than Google AdWords, which is one reason why it is being embraced by the market.

There are all sorts of interesting ways that additional data can be used to make these ads hyperrelevant to the online user. Retailers use weather-related information to inform their targeted advertising, such as selling snow shovels when a winter storm is brewing or air conditioning units when a heat wave is arriving. Or a cold syrup advertiser that studied CDC data on flu outbreaks across the country can target its ads down to the ZIP code where outbreaks took place. This leads to an extraordinarily high conversion rate.

By its very nature, I believe that programmatic is about engendering an action and thus well suited to drive conversion in direct-response advertising. And that’s a tangible way to measure success.

Branding Is About Immersion

But the results of using programmatic for branding are trickier to quantify, as there is not always a call to action on the part of the user. Branding is about invoking a feeling in people that they associate with a company’s name. An enormous part of that is its association with specific high-quality content that is immersive and involving. The timing of the message shouldn’t be left up to chance or an automated bidding system. The ads’ timing is just as important as its creative message.

So it really is worth it for Coca-Cola and Oreo to buy those expensive Super Bowl ads, when they are sure that millions of viewers will be watching, both during the show and after the game online. Social media platforms also allow companies to continue the brand experience and get audience participation and feedback, for a pretty reasonable investment.

Programmatic is an exciting new technology option, but I think marketers should take a long careful look at whether they pour a good portion of their programmatic ad budget toward branding, where good old-fashioned creative chops and timing are still key.

Follow BlueLink Marketing (@BlueLinkMktg) and AdExchanger (@adexchanger) on Twitter.

10 Comments

  1. This article is a poor example of the benefits of programmatic for DR or Branding. Programmatic is a delivery method for buyers and publishers. It doesn't reduce the creative aspect behind the ad. In fact, being able to deliver to the right audience at the right time is exactly what programmatic is supposed to do, but unfortunately the standard ad server does not support programmatic at scale.

    Branding campaigns are a perfect fit if the right programmatic delivery platform is available. but you can't compare social media or a super bowl ad with standard digital media buying, it's apples and oranges. As a Marketer you should be embracing programmatic for branding. Access to the exact consumer in a PMP with a guaranteed delivery at a negotiated price, far more accurate than a 30 second TV commercial or a tainted social media campaign built on giveaways.

    Being able to deliver to the exact audience you want at the right time is the core of programmatic's mission, whether its branding or DR, both can benefit.

    Reply
  2. I understand your sentiment, but I think you're equating all branding activities to non-track-able activity, in which I have to respectfully and completely disagree, whereas the solution lies in brands shifting their focus to not just "eyeballs", but performance-driven campaigns. Getting someone to take an action (such as entering their email for a Coca-Cola sponsored sweepstakes, then owning their email address) can have a much more profound impact on brand than merely an impression. Additionally, "programmatic" merely means automating the buying process. It doesn't necessarily mean buying from an exchange via RTB.

    Reply
  3. Can't say I agree at all...

    Isn't the goal of branding also to, as you put it:
    "is about exploiting a brief time window to get someone’s attention."

    Attention is the foundation of branding and direct response. Only the messaging and CTA's are different. Programmatic has tremendous capabilities as a tool for branding. Sure Coca-Cola & Oreo's can drop millions on a Super Bowl ad but those are mass appeal brands. What of your audience is narrower? Branding vehicles such as Super Bowl spots start to make a lot less sense...

    The promise of programmatic for brand advertisers as well as DR advertisers is the ability to hone in on a precise audience target and then use all of the available data to evaluate the value of the impression and adjust your pricing strategy accordingly based on your campaign goals & KPI's. And once that target audience has been reached, programmatic enables brands to tightly control frequency in order to truly understand how many exposures it takes to get a lift in recall, perception etc...

    There's absolutely no question that RTB has been a boon to DR advertisers, simply due to the overwhelming amount of supply. It offered a brand new way target audiences and generate ROI that quite frankly wasn't really available before. But RTB is not programmatic, RTB is an auction process, programmatic is a buying method. Yes, much of what's available from a technology and capabilities standpoint has been built off leveraging RTB inventory...but that same tech can now be applied to far for than impressions auctioned off in real time. And that is the real promise of programmatic for brands.

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  4. Mike Monaco

    I think it's important that we avoid defining all of Programmatic buying as simply real-time, remnant inventory. Buying inventory in a programmatic manner includes private marketplaces, both in terms of predefined upfront buys with budget minimums, as well as buying that can happen in real-time with no budget minimum. Both allow for a predefined audience, if you want that, but could also simply mean a contextual targeting overlay that can be curated ahead of time.

    Timing and Immersion are not lost on programmatic. In fact, both are encouraged. The means by which creative immersion is available programmatically includes, but certainly not limited, to:
    -Timing, which can be curated to a specific Brand's needs. If you want to run during the SuperBowl, you can leverage your buying platform of choice to do just that. In fact, it's recommended, especially as more TV viewers continually have their laptops and mobile devices in front of them at all times. Want to target a user with only highly engaging 300x600 units and only when they are reading Sports content? That can all be planned ahead of time and executed with a click of the mouse.
    -Buying programmatically does not come at the expense of an immersive creative experience -- there is plenty of Rich Media/Expandable creative opportunities, as well as high quality in-stream Video.
    -Storytelling - Buying programmatically allows the advertiser to follow the user through the entire brand experience, from Display to Video to Social Networks, and to see the interactions at each of these touchpoints along the way.
    -Plenty of user targeting opportunities at your disposal, which can include: Facebook data via a PMD, 3rd party providers like BlueKai or Exelate, as well as an advertiser's own CRM data
    -And maybe most importantly for Branding efforts, Reach. Programmatic buying enables the advertiser to manage for reach and frequency across their entire digital marketing effort, rather than in silos.

    The world of Programmatic has grown up considerably over the past 5 years and is now in a great position to the the primary tool in the brand marketer's toolkit.

    -Mike Monaco

    Reply
  5. marco bertozzi

    I do not understand this argument - are you saying you can only build a brand in Superbowl? Or in an event? Most brand spend is not that, it is environment and creative combined. There is less 'the big event' and the reality most of that spend is wasted on the wrong audience. I think this was an over simplistic piece. Programmatic can combine the right audience, rich formats, great environments and less wastage. I would argue that programmatic brand is the big untapped opportunity. I am pleased you want to stick to DR because all the growth is coming from brand.

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  6. Any ad unit that becomes a standard can end up in RTB in the same way any new stock that mets financial standards ends up on the NASDAQ. If the KPI for Brand is a lift in awareness and advertising units and process can be standardized, then it too can thrive in the RTB environment. Yes, its true DR has dominated RTB but I truly believe Brand also works great in RTB. I can say this, because thats essentially our whole business, so this is not a theoretical response. I will admit, our B2B business bucks the trend but with the advancement of private exchanges, i see that changing very quickly

    Reply
  7. Completely agree 100% with all sentiments shared above. Programmatic is simply a vehicle, a tool to enable the delivery of media. For too long programmatic has been synonymous with bottom of the funnel, DR, open exchange buying and this is simply not the case. Programmatic (done right) is a more efficient, precise, informed means of execution. I'm so glad to see so many people share my sentiments!

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  8. Don't really agree. What we forget as marketers is that the ONLY reason we advertise is to SELL PRODUCT either directly -- with hard metrics -- or "softly", getting people to move down the purchase funnel and get our brand top of mind.

    For years now, branding campaigns can easily be measured through studies like Vizu, InsightExpress, etc. that demonstrate lift in terms of awareness, preference, likelihood to buy.

    The DSP Rocket Fuel has a Survey Based Optimization offering that can show this kind of increase in preference with a research study while ALSO optimizing the campaign ads based on how people are responding and alter the message appropriately.

    Of course, companies like Datalogix, Nielsen Catalina and Acxiom can measure increase in sales...or brands can supply actual sales changes that are tied to display campaigns for products not sold online -- like CPG brands or retail products. PlaceIQ and Placed can show lift in store foot traffic from mobile initiatives.

    No need for media mix modeling anymore since the advent of Programmatic. Computers are using artificial intelligence to adjust the messaging delivery to prospects based on time of day, platform, device, sales data, performance...

    Just my thoughts.

    Reply
  9. Bunk. I've built programs that drive top of funnel metrics like awareness and preference using largely programmatic tactics. Anything is possible if you're clear on your expected outcomes.

    Any tactic can work--or fail--if you don't know what you are solving for or if your problem statement isn't clear.

    Reply
  10. Stephen Hunt

    In my opinion this is completely inaccurate. I've dedicated my career to using programmatic tools for the purpose of branding and would be happy to educate the writer with plenty of proof that it's incredibly effective. Just this week we helps a challenger CPG brand build awareness of their new toothpaste product resulting in their sales doubling. All activity was executed with programmatic tools combined with some experiential sampling. Ultimately, branding is about shifting the perceptions of target audience. Programmatic tools help you find that audience most efficiently and then allow you to measure if you shifted those perceptions with the added benefit of being able to optimize on the fly. Far better than spraying and preying with the Superbowl. Feel free to reach out if you want to learn more.

    Reply

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