Datacratic Website  |  1-877-397-9484

How Programmatic Buying Works: A Beginner's Guide


May 4, 2017, By J.F. Houpert
|0 comments

This is the first blog post in a series that examines different programmatic buying tactics. In this post, I will outline how programmatic buying works. 

Programmatic advertising is reshaping the way digital media inventory is bought and sold and it is growing, fast. This year 66 percent of marketers expect to increase their programmatic advertising budgets, according to AdRoll.

Today, we are living in an increasingly programmatic world with programmatic advertising set to consume half of display and video ad budgets by 2019, reported Magna Global.

With such intense hype and money surrounding programmatic media buying, many of the tactics can be easily misunderstood.

This is the first in a series of blog posts where I intend to unpack the different programmatic media buying tactics, their pitfalls and their strengths. In this first post, I will walk you through the basics of programmatic media buying and a high level view of the different tactics and when and how to use them.

 

It all starts with the marketing funnel

First off, let’s start with the basics, where does display advertising fit in the marketing funnel? If you are not familiar with the concept of the marketing funnel or purchase funnel, it is the various stages of a prospect’s journey from the first interaction with your brand to the ultimate goal: conversion. 

Almost all websites have a funnel they use to guide the prospect’s journey. The only thing that differs from site to site is the desired conversion or action they are striving for. In some cases, it might just be consuming content which might be the case for a media site or it could be signing up for a newsletter, building an email list or purchasing goods or services. All of these are types of conversions.

programmatic media buying

Image source: Flickr

As the image above shows, there are 4 basic stages in the marketing funnel: awareness, interest, consideration and conversion.

Programmatic display campaigns can help at each stage of the marketing funnel by building awareness, creating interest, driving consideration and finally leading to conversion. Let’s take a look at what types of campaigns can be used to help support the marketing funnel.

 

Awareness - Basic Programmatic Prospecting Campaign

The first type of campaign is a basic prospecting campaign which usually targets a wider audience and can be referred to as prospecting, branding or Run of Network (RON). They usually target certain geographical locations, languages and other contextual categories. These campaigns are used to cast a wide net and are a perfect way to build awareness of your company or product/service.

When building a basic prospecting campaign, I like to start with a wide target audience. Then, as the campaign progresses and enough data becomes available, start optimizing by moving different target audiences into their own campaign subset or what is commonly referred to as flights. Typically, I break up the target audience into different flights which generate the most conversions in terms of click-throughs and view-throughs. I then continue to explore new pockets of inventory with basic prospecting.

A good tip, is to always have a specific flight to look for new inventory. The web is an ever changing ecosystem and the sources of traffic which performed well for you once may change over time as your site evolves or is discovered by new users.

I will go into more detail in my next post about flight setup and optimization, but always keep in mind that, no matter what your client believes is the best source of inventory, there is always a source they haven’t found. And it is your job as a campaign manager to find those users and bring them to the site.

 

Interest - 3rd Party Data Campaigns

Another type of campaign is one that leverages third party data. Third party data allows you to target by users which have been identified as meeting a set of criteria. For example, you might buy data of users that have shown an interest in sports cars. But you then might show a display ad to these users on sites that have nothing to do with cars because you are targeting the user rather than the site.

You can buy this 3rd party data from data exchanges who usually run DMPs such as Lotame, Oracle (Formerly known as BlueKai) and Krux. These data segments are usually broken down into, gender, age groups, product interest, household income and many other categories. Most platforms will give you access to multiple vendors and data sources allowing you to target the same segment from multiple sources ensuring you get the best possible reach.

Third party campaigns are campaigns for further down the funnel since you are targeting users that should already have an interest in your type of product. This is unlike the RON campaigns which are driving users to your site based on a much wider set of targeting variables.

 

Consideration - Retargeting

I say this without hyperbole, retargeting campaigns will be your best performing campaigns. This is because retargeting helps keep your brand front and center with website visitors by encouraging them to return to your site.

Retargeting works by assigning a ‘cookie’ to users that land on your site and navigated the pages of the site. This allows you to bucket these users and bid to show them your ads on other sites they visit via your DSP. A visitor who lands on your site, whether it was from one of your prospecting campaigns, your search/PPC campaigns or even via an organic search, will always be a better target than the users you target from a prospecting campaign or 3rd party data campaign. As users have to have visited your site previously, retargeting requires visitors to be aware of your brand and mostly probably be in the consideration phrase.

 

1st Party Data Campaigns

The final type of campaign I will touch on is one that leverages first party data. First party data is data you own on your visitors or customers. By using first party data you can optimize your retargeting campaigns to more effectively segment your users and optimize the advertisements you show your users.

First party data is usually CRM data which you use to augment your retargeting by segmenting users who have interacted with your brand in the past. First party data will allow you to push the performance of your retargeting campaigns to its maximum, if you use the data properly. 

You will also be able to customize advertisement creatives for your users using first party data. For example, if you know what type of product your client is in interested in you can show them an advertisement featuring that particular product.

Furthermore, if you can determine a user’s intent you can segment your users in such a way that you show users who have the intention to buy, for instance, advertisements with a special offer to incentives them to complete their purchase. Alternatively, you could show a user which is in the research phase advertisements to keep your brand top of mind and inform them about your product and their advantages. All this data can be passed into most DSP’s or ad servers so you can use the information on the open market or to inform your premium ad buys.

In my next posts, I will dig into various tactics as well as examples of how to setup and optimize campaigns and flights to achieve maximum campaign effectiveness. 

J.F. Houpert

J.F. is a digital marketing expert with extensive experience in the areas of programmatic, data and advertising technologies. As Director of Data Solutions, J.F. is responsible for developing the next generation of advertising technology solutions to maximize the value of first-party customer feedback data.

How Programmatic Buying Works: A Beginner's Guide


May 4, 2017, By J.F. Houpert
|0 comments

This is the first blog post in a series that examines different programmatic buying tactics. In this post, I will outline how programmatic buying works. 

Programmatic advertising is reshaping the way digital media inventory is bought and sold and it is growing, fast. This year 66 percent of marketers expect to increase their programmatic advertising budgets, according to AdRoll.

Today, we are living in an increasingly programmatic world with programmatic advertising set to consume half of display and video ad budgets by 2019, reported Magna Global.

With such intense hype and money surrounding programmatic media buying, many of the tactics can be easily misunderstood.

This is the first in a series of blog posts where I intend to unpack the different programmatic media buying tactics, their pitfalls and their strengths. In this first post, I will walk you through the basics of programmatic media buying and a high level view of the different tactics and when and how to use them.

 

It all starts with the marketing funnel

First off, let’s start with the basics, where does display advertising fit in the marketing funnel? If you are not familiar with the concept of the marketing funnel or purchase funnel, it is the various stages of a prospect’s journey from the first interaction with your brand to the ultimate goal: conversion. 

Almost all websites have a funnel they use to guide the prospect’s journey. The only thing that differs from site to site is the desired conversion or action they are striving for. In some cases, it might just be consuming content which might be the case for a media site or it could be signing up for a newsletter, building an email list or purchasing goods or services. All of these are types of conversions.

programmatic media buying

Image source: Flickr

As the image above shows, there are 4 basic stages in the marketing funnel: awareness, interest, consideration and conversion.

Programmatic display campaigns can help at each stage of the marketing funnel by building awareness, creating interest, driving consideration and finally leading to conversion. Let’s take a look at what types of campaigns can be used to help support the marketing funnel.

 

Awareness - Basic Programmatic Prospecting Campaign

The first type of campaign is a basic prospecting campaign which usually targets a wider audience and can be referred to as prospecting, branding or Run of Network (RON). They usually target certain geographical locations, languages and other contextual categories. These campaigns are used to cast a wide net and are a perfect way to build awareness of your company or product/service.

When building a basic prospecting campaign, I like to start with a wide target audience. Then, as the campaign progresses and enough data becomes available, start optimizing by moving different target audiences into their own campaign subset or what is commonly referred to as flights. Typically, I break up the target audience into different flights which generate the most conversions in terms of click-throughs and view-throughs. I then continue to explore new pockets of inventory with basic prospecting.

A good tip, is to always have a specific flight to look for new inventory. The web is an ever changing ecosystem and the sources of traffic which performed well for you once may change over time as your site evolves or is discovered by new users.

I will go into more detail in my next post about flight setup and optimization, but always keep in mind that, no matter what your client believes is the best source of inventory, there is always a source they haven’t found. And it is your job as a campaign manager to find those users and bring them to the site.

 

Interest - 3rd Party Data Campaigns

Another type of campaign is one that leverages third party data. Third party data allows you to target by users which have been identified as meeting a set of criteria. For example, you might buy data of users that have shown an interest in sports cars. But you then might show a display ad to these users on sites that have nothing to do with cars because you are targeting the user rather than the site.

You can buy this 3rd party data from data exchanges who usually run DMPs such as Lotame, Oracle (Formerly known as BlueKai) and Krux. These data segments are usually broken down into, gender, age groups, product interest, household income and many other categories. Most platforms will give you access to multiple vendors and data sources allowing you to target the same segment from multiple sources ensuring you get the best possible reach.

Third party campaigns are campaigns for further down the funnel since you are targeting users that should already have an interest in your type of product. This is unlike the RON campaigns which are driving users to your site based on a much wider set of targeting variables.

 

Consideration - Retargeting

I say this without hyperbole, retargeting campaigns will be your best performing campaigns. This is because retargeting helps keep your brand front and center with website visitors by encouraging them to return to your site.

Retargeting works by assigning a ‘cookie’ to users that land on your site and navigated the pages of the site. This allows you to bucket these users and bid to show them your ads on other sites they visit via your DSP. A visitor who lands on your site, whether it was from one of your prospecting campaigns, your search/PPC campaigns or even via an organic search, will always be a better target than the users you target from a prospecting campaign or 3rd party data campaign. As users have to have visited your site previously, retargeting requires visitors to be aware of your brand and mostly probably be in the consideration phrase.

 

1st Party Data Campaigns

The final type of campaign I will touch on is one that leverages first party data. First party data is data you own on your visitors or customers. By using first party data you can optimize your retargeting campaigns to more effectively segment your users and optimize the advertisements you show your users.

First party data is usually CRM data which you use to augment your retargeting by segmenting users who have interacted with your brand in the past. First party data will allow you to push the performance of your retargeting campaigns to its maximum, if you use the data properly. 

You will also be able to customize advertisement creatives for your users using first party data. For example, if you know what type of product your client is in interested in you can show them an advertisement featuring that particular product.

Furthermore, if you can determine a user’s intent you can segment your users in such a way that you show users who have the intention to buy, for instance, advertisements with a special offer to incentives them to complete their purchase. Alternatively, you could show a user which is in the research phase advertisements to keep your brand top of mind and inform them about your product and their advantages. All this data can be passed into most DSP’s or ad servers so you can use the information on the open market or to inform your premium ad buys.

In my next posts, I will dig into various tactics as well as examples of how to setup and optimize campaigns and flights to achieve maximum campaign effectiveness. 

J.F. Houpert

J.F. is a digital marketing expert with extensive experience in the areas of programmatic, data and advertising technologies. As Director of Data Solutions, J.F. is responsible for developing the next generation of advertising technology solutions to maximize the value of first-party customer feedback data.

Learn more about Datacratic

Only pay per conversion

We're so confident in our performance-based retargeting solution that we're wiling to take the risk. That's why you only pay for the conversions we deliver.

Learn More