“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 Veerle De Lombaerde, global product director at The Exchange Lab.
Consider the following scenario: You spent months educating your client about the value of programmatic buying. Based on your client’s internal CRM data, you defined the right audience — and you also came up with a test-and-learn strategy that allows you to expand beyond the known best-performing audience. When you launch the programmatic-buying campaign, it’s a big success, according to every key performance indicator. The only problem now? You can’t deliver scale.
Most likely, you’ve chosen to use a single Demand-Side Platform to reach that audience. It’s a confusing market for those of us who work in the trenches of programmatic buying, let alone for our clients, but — even though they may not know it — the decision about whether to go with a single- or multi-platform approach actually does matter to clients. Sticking with a single platform can significantly limit a programmatic-buying campaign’s ultimate impact and success.
1) Technology:
Every DSP submits its bids differently, which means that all bids are not created equal. Because of this, a $2 bid in Appnexus will not necessarily beat a $1.50 bid from The Trade Desk for the same inventory. A bid must win internal auctions within its DSP before it even makes it to the SSP auction, when the SSP decides which of those bids, from all of the DSPs, will win the impression. DSPs consider budget, performance against target, time of day, advertiser category, publisher block lists and minimum bid, to name just a few of many, many factors — beyond price — that can alter the likelihood of an advertiser winning a bid.
2) Scale:
As I mentioned above, choosing only one platform can limit how big a campaign can grow. This is because good optimization strategies often decrease the size of the audience available on a platform, for obvious reasons — a more specific audience is, necessarily, a smaller one. Running a campaign across multiple platforms increases the potential audience, bringing scale back into the mix. This is even more important when you’re targeting a niche audience, for which delivering scale is a bigger challenge. Building that audience in more platforms can only bring you more opportunities to reach it.
3) Risk Management:
As the publishers work to optimize yield by altering their back-end inventory allocations to SSPs and exchanges, it’s not uncommon for an excellent, optimized strategy to fail when the inventory mix on which you’re bidding suddenly changes — or even disappears all together. When this happens, the ability to shift to alternative platforms can provide options and redundancy, saving a campaign from getting sent back to the drawing board. In addition, running a campaign across multiple platforms simultaneously can maximize your chances for a win, similar to spread betting.
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4) Insight:
In a constantly changing ecosystem, one of the most important aspects of developing your programmatic strategy is insight development. To do this, you first need to be able to convert your detail-level data so that you can make apples-to-apples comparisons. You also need to link your objectives to your executional tactics and determine the best KPIs across platforms, strategies and tactics. If you accomplish this, you’ll continuously build and refine your strategy, creating a constant innovation cycle in optimization.
Multiple platforms can help. Running your activity across multiple platforms means you can test, learn and apply the learning on a continuous basis, without losing scale or being overexposed to your platform’s SSP mix. You may find, for example, that one platform is better at delivering against an audience within a certain price range, while another is great for back-end conversions on your site. Providing this type of cross-platform insight allows the development of a proper test-and-learn strategy, a cornerstone you can use to build long-term marketing plans across programmatic media.
Tapping Into Innovation And Evolution
All the changes happening in programmatic buying come with new challenges and opportunities. As new technologies and platforms evolve, for example, both demand- and supply-side technologies will have to improve and differentiate themselves. Some recent examples of new mediums include radio and digital billboards. Each of these new additions will result in new platforms specialized for that medium, so the ability to leverage multiple platforms — and tap into these new platforms as they arrive — will increasingly become a competitive advantage.
The supply side of the ecosystem already is pushing forward with a multiple-platform approach: Some publishers, including premium ones, are signing up with multiple SSPs to manage their inventory to optimize internal yield management and enable advertisers to find the inventory in more than one place. I’d argue that, now, the demand side also should be making the switch. A multiplatform approach would stimulate innovation on both sides and enable the delivery of better performance for clients.
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