The Iterative Marketing Podcast Ep. 25: Programmatic Media

The Iterative Marketing Podcast Ep. 25: Programmatic Media


Hello, Iterative Marketers!
Welcome to the Iterative Marketing Podcast where each week we give
marketers and entrepreneurs actionable ideas, techniques,
and examples to improve your marketing results. If you want notes and links to
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of your fellow Iterative Marketers. Now let’s dive into the show. Hello everyone and welcome to
the Iterative Marketing podcast. I’m your host Steve Robinson and with me as always is the
perceptive and observant, Elizabeth Earin. How are you doing today, Elizabeth? I am good, Steve.
How are you? I am doing well. I am recovering from
foibles as a handyman. Oh! we have gotten
handyman stories before. What happened this time? Well, we were out at Lowe’s
and Kim said to me — my wife Kim said to me, “Hey, why don’t we get ceiling
fans for the kids’ bedrooms?” I said, “It’s a great idea.” So we picked up some ceiling fans
and took them back to the house and I took down the light
fixture that was there and saw a 1920s electrical connection
that I had never seen before in my life and went, yeah, this does not
go with that, does it? And the journey begins there. So I am not going
to get in the details, we have more important
things to talk about today and so I guess that’s a good segue
to what are we talking about today? That is a great segue. Today we are talking about
programmatic media. Excellent. And why is
this an important topic? It’s an important topic because it’s
something that modern marketers are dealing with and we are seeing over
and over again that there are a lot of people who are
unaware that there’s been a major shift in how much of digital media
is bought and sold today. And it’s interesting because you mentioned that a lot
of marketers are unaware of this. We looked for some stats to find out exactly how many
marketers were unaware of this before we went to go and record
this and make that bold statement, and the stats were absolutely
all over the place. It seems that everybody who reports
on the adoption of programmatic media seems to come up
with a different number which leads me to believe that
there’s probably some variants and what that word
‘adoption’ means, right? So I think there’s a lot of marketers
that are playing with this or who have tried it, but not as many that are
actively using it day-to-day and I think that might be because
it’s hard to get your head around exactly what this shift enables besides just cutting some
people out of the equation. I think that’s a great point and I think that kind of
reinforces what we saw, our inability to find statistics that
seem to agree with each other. We did notice that there was also
another common theme in that, a lot of the people who
are using programmatic feel like they don’t have
a strong understanding of it, they don’t have a grasp on it and are interested
in learning more. And so with those
two scenarios in mind we thought that today would be a
great time to talk about programmatic. And so we are going to
cover what programmatic is and what real-time bidding is and then we are going to get into
what that means to us as marketers and how that fits into the
Iterative Marketing methodology. Excellent. And if you are an existing
programmatic marketing geek and you understand all of the
details of how this works, just know we are going
to gloss over some stuff because we have to take
a really big complicated thing and make it appear fairly straightforward
and easy to understand. But we do have some great resources
at the end of the podcast and that we’ll share
in the show notes, so if there’s anything that you feel
like we didn’t go into enough depth, we do have some additional
resources to refer you to. So let’s start with defining
what programmatic media is. When you look at it, it’s basically taking
humans out of the equation, right? Um-hmm. If you go online, you can find
a lot of different definitions and they kind of all vary, and when we were even looking at them,
a lot of them have business speak and we decided that makes
it a little too complicated, and I love how you have
distilled this down and made this–really taking out
all of that extra stuff and made it so simple
to understand. It’s taking the humans out of the equation
in certain points and inserting computers that really enable us to
buy media faster and easier, optimize media automatically and place media without a lot of human
interaction and opportunity for error. It also opens the door to some
more robust or advanced targeting that we weren’t able
to do in the past because every time you would
change how something was targeted you had to have a human involved
and it took time. So before we get into exactly
how programmatic works, do we want to quickly talk about how
digital media has sort of changed? How purchasing digital
media has changed? Yeah. For those of you who maybe media-buying
has never been part of your job but you need to understand this
enough to understand how it works, let’s talk about how digital
media used to be bought because it was bought in exactly the
same way that traditional media was bought. And so you would have — the media buyer would put out an RFP, the publisher would say, hey, we have this much inventory
at these rates, do you want to buy it and then the two would negotiate on exactly
what the terms of the agreement were and then you would buy
a chunk of impressions. And you were guaranteed the
impressions that you bought and at that point now you had to
come up with an insertion order that would include
all of the details of exactly how you are going
to put that media online and then deliver
the creative files and flow through all the
way to media being placed. All of this was back and forth between
a media buyer and a rep at the publisher going back and forth on the
opportunities, on the terms, on the creative,
on the insertion order and then on the data and it was all a very human driven process. The big difference with programmatic
is we automate a lot of that. So, on the programmatic side, the media buyer
which is either the agency or in some cases
even the brand directly, they place an order online
using a tool called the Demand Side Platform or DSP and you have probably heard
of some of these before. DoubleClick Bid Manager is one, MediaMath, Rocket Fuel, Turn, SiteScout is another one. And so depending on
the type of the order, the media gets locked in or guaranteed
within that publisher system and then goes out onto
the public exchange as a bid and it’s a lot like
probably equating it to eBay. Yeah, yeah. I mean it generally is run using
something called real-time bidding which is basically
an eBay for ad space, only you usually aren’t going on
there and bidding on things one at a time necessarily. So if you think about it, if you were to visit
huffingtonpost.com for example, as you are browsing
huffingtonpost.com there are ads that
appear on the screen. Some of those ads were bought well in
advance using the traditional methods, where a media buyer and an ad rep
got together and negotiated a buy. But some of those ads, Huffington Post
doesn’t know what ad is going in that slot until you see it. And that’s called real-time buying, where the ad is actually
purchased at the moment that the user is sitting in
front of that website. And the way this
happens is that instead of the ad itself being
delivered to the screen, instead, a little snippet of
script is delivered to the screen and that script goes out
and announces to the world, hey, I got an ad impression, right? And when they announce
that to the world they are putting it on what’s
called an ad exchange. An ad exchange is just
like a stock exchange, only instead of people being
able to buy and sell stocks you have people being able to buy
and sell individual ad impressions. What happens then is that the advertiser then has the
opportunity to bid on that impression that this person reading
Huffington Post just created because they happen to
be looking at the article. What’s cool is that script that went
out and announced the fact that you had this impression available, didn’t just announce that this
impression is available, it also threw a whole bunch of other
data out there along with that about everything that
it knew about the user on the other side of
this available impression. So that includes things
like age and gender, income, job title, all kinds of creepy data, right? This gives us as advertisers
the chance to pick and choose which impressions we
want to bid on and then if we choose to bid on
it and we have the highest bid then immediately the creative
gets pushed out to the script that announced to the world
that the impression was available and boom, an ad shows
up on the screen. And all of this happens
in like milliseconds and it’s insane to think about the
complexity and how fast it all occurs, but phenomenally powerful
to us as marketers. Well, yeah, you say it’s insane
to think about the complexity but it’s, in my mind, working
more on the account side and less on the technical side, it’s insane to me what doors this opens
up to us in terms of targeting methods. And we are going to get
into that a little bit later. Is there anything else that we need
to know about real-time bidding and its tie to programmatic? Yeah. A lot of people will confuse the
terms real-time bidding and programmatic. They aren’t technically
the same thing. So again, programmatic is just the act of
replacing the people with the machines, right? That just says that we are going to
automate the purchase, placement and optimization of media. It doesn’t mean that it’s
necessarily in real time because there is a way of doing
something called programmatic direct that we are not going
to get into today, to kind of do it half and half,
the old-school method where you are locking
in that inventory, you are locking in those
impressions that you bought, but then later you are going
to use them as you see fit in a programmatic, automated way. There’s also another term that you might
run across called a private exchange. And a private exchange is where the opportunity to bid
on a particular ad is thrown out to a smaller group of people instead of being thrown
out in the wild. Again, we are not
going to get into that. We did kind of allude
to them in Episode 17 where we went off on a rant
about the haves and have-nots, definitely an entertaining episode
to go back and listen to. You’ll get into a little
bit of this there, but for the majority of you this isn’t going to be your
first foray into programmatic and you might not ever get to
really play with programmatic direct or private exchanges unless you start moving a pretty
high volume of advertising. And with that, I think it’s a great
time for us to take a quick break and go help some people. Before we continue I’d
like to take a quick moment to ask you Iterative Marketers
a small but meaningful favor and ask that you give a few dollars to a
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in by Joe Kitzinger from K-Consult. Joe asks that you make a contribution
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invested in the school and continuing its legacy
for future generations. Learn more at tmore.org
or visit the link in the show notes. If you would like to submit
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are important to you. And we are back. So, before the break, we got into the
nitty-gritty of what programmatic and real-time bidding are, but we didn’t get into what this
means to us as marketers. So Elizabeth, where should we start off on
how this actually adds value to our world? Well, I think it starts with understanding
that programmatic is here and it has become a staple of how we
are buying media in our modern world. Marketing Land had a great
statistic out there in that programmatic is expected to
account for 50% of digital ad sales by 2018 and it just keeps moving
up and up and up as more people get involved and
as more inventory becomes available. And so this is important
to us as marketers because if this is something that
you are not currently using, you need to at least
understand it, and once you understand it
then you can start to decide is this something that fits
into my overall strategy. Yeah. And to your point that it just
keeps gaining more and more momentum, it’s definitely the future
of media buying and not just display
media buying either because right now you can buy display,
you can also buy video inventory this way. So if you have video ads that you
want to get out on the internet, you can buy it this way. But it’s not going to be limited
there in the very near future. There is television that is being
bought and sold programmatically, it’s not available mainstream yet, but you are going to see broadcast
radio bought and sold this way, even outdoor, they are working on trying to figure out
how to sell outdoor in a programmatic way. So if you aren’t learning how
this fits into your world today, you are going to not only be missing on
opportunities today but in the future. Yeah. And I think talking about how it’s extending
this into these other more traditional mediums, the reason that this is happening, it kind of supports one
of the other reasons why as marketers we need
to know what’s going on and that’s that programmatic
real-time bidding allows us to focus on buying
access to specific people — I shouldn’t say specific people — but to people as opposed to
just buying access to ad space. And so instead of saying I am going
to purchase in this publication, we can instead pick a very targeted
audience that we want to go after and make sure that we are
delivering our ad directly to them. And that comes from all of
that rich creepy data that gets passed along with that
opportunity for that ad in real-time, all of that flows back to the DSP, the system that you
are placing the ad in and those are all targeting
levers that you get to use. And the cool thing is you are not just limited to placing
it on one or two publications. Approximately 90% of the
websites out of the net are selling ad space
programmatically. So you can really cover almost
all of the websites on the internet and instead of setting
up individual buys based on where you think
your people are going to be you don’t care about
where the ads run, you just want to get them
in front of the right people based on the creepy data
that we know about them. And again that comes back to
not having to pick publications. I remember years ago you
have so much media to spend and you are trying to make the best
decision with this limited information or the fact sheet that you are getting
from your print publication and this changes that game. That gives, in my opinion and I don’t know how
you feel about this, but a little bit more power
to us as marketers in terms of helping us to make sure that
we are making the most of that budget that’s available to us. So instead of just
picking publications we actually get to pick the people
that we want to advertise to. And this ties into Iterative Marketing and I am chomping at
the bit to talk about it, but I know that’s how we
are wrapping up the podcast, so I will refrain for
this point in time. I think another key area that
programmatic impacts us as marketers is not just on the figuring out how and
where we want to run our media and being able to target it but also on the optimization side because when we talk
about real-time bidding, real-time bidding gives us a unique
opportunity to do some very rapid optimization as well as insight gathering
into our audiences. When we place media
real-time bidding on a DSP, we can log into that DSP
at any point in time and get rich data about how
our ads are performing. We can see how many
impressions we are getting, how many clicks
we are getting, whether those impressions
were viewable or not. We can see which creative,
if we set up multiple sets of creative, is getting clicked on and how fast, all of it in real time. We can see which of our
targeting mechanisms, which of those levers of creepy data
that we have to target our media, which of those are most effective in
getting those ads in front of our people. We can do all of this real-time. We can also make optimizations
or changes real time and then those changes
are impacted immediately. No waiting for the changes to go through
the media buyer to the publication, for the publication
to swap the creative, for the ads to start running again, for the feedback to come
back through Google Analytics. It’s all immediate. And so if something isn’t working
we can pull it right away. If something is working we can
put up multiple versions of it and quickly iterate
and improve upon it and that’s just phenomenal. I think that’s really a great point and one of the big benefits
of using programmatic but I think it’s important to note that
when we are talking about a lot of this, what we are talking
about is direct response. And so when we start to try to apply
brand advertising to — or programmatic to brand advertising, some of those things that make
it such a strong tool for us don’t necessarily crossover
on the brand side and that’s just — it has to
do with how we optimize. We have got the
leverage and the triggers to be able to optimize
direct responses ads that we don’t have
on brand advertising. That doesn’t mean that you can’t take
lessons from direct response though. And we do this every
single day with our clients, where we run an experiment
with direct response and then based on what happens we are then able to
apply those optimizations and those insights over
to our brand ads. So, you still have the ability to use
programmatic for your brand but you are not going to be able
to optimize in the same way that you would a direct
response program. Definitely true. Another challenge with programmatic
comes around budgeting and we run into this
every day, don’t we? When you go to place
programmatic media you can run some
models beforehand to try and estimate
exactly how much inventory there might be available out there
for a particular audience that you are trying to target, you can run models on what
the reach is going to be and what frequency
you can target, but at the end of the day that
inventory can change overnight and all of a sudden you are
looking at a situation where either you are not spending
the money that you budgeted or you have opportunities to spend
significantly more than the money that you budgeted. And managing that variation
can be very challenging if you work inside of an
environment where, no, no, no we
allocate X we spend X. It doesn’t exactly
work that way. No. And this year — I know that every year
there’s new factors that are out and about, but this year with
the elections going on and getting a handle on
viewable impressions and what’s going on
on that front, we are seeing our numbers
change across the board. And really the key to that is, as I know when we work
with our brands, with our clients, is help to educate and just make sure
that everyone’s on the same page in terms of what
the expectations are and that there’s a
little bit of risk here, but at the same time, there
are ways to manage that risk. Absolutely. Unfortunately, programmatic has
a couple of other warts as well. One of them being ad fraud. And you’ll see reports of this
out in the media occasionally. And some of those reports
are a little bit overblown because there’s a lot of established folks
within the way that media buying has been going on saying that they want
to protect their world as it sits right now. Some of them are not
that overblown though. I mean, ad fraud is a reality and it’s significantly more rampant
inside of programmatic media buying because it’s the computers making
the decisions, not the humans. And so it’s really easy for a
bad apple to get in there and suddenly make a bunch of impressions
that never really happened show up and make some money off of that. The systems are getting better and
better at protecting against that, but at the end of the day,
it’s a reality of the platform. I think another area that we want to make
sure our listeners understand is that there’s also a brand safety and media
quality component that ties to this. And so when you are looking at programmatic
and your ad could appear on any site, you run that risk of your
ad appearing on any site and maybe a site that isn’t
necessarily aligned with your brand or with your brand values. And so making sure that
you understand that risk and there are some tools
and things that you can do to help to try that
to minimize that risk but being aware that that is something
that is a unique challenge when we are dealing
with programmatic. And so you have
the content issue. You also have the
quality of that site. Better quality sites put ads in places
where people can actually see them. Some of the scuzzy,
scummier sites out there put ads in places like the
footer of the website. Well, that’s great except who
scrolls down to the footer? So that lack of choice or being
able to really direct your budget to the publications that
you know and trust can be a factor in
is this right for you, but at the end of the day, you also have
that rapid measurement feedback to know whether or not it’s
working for you. So it can be beneficial
just as detrimental as it is. And you can find opportunities that you
would never think of for a direct buy. Your ads can end up there
through programmatic. So I mentioned earlier I was
excited to talk about this, but where does programmatic
fit into Iterative Marketing? The first place is obviously and I have
been hammering this the whole time and that is in that
feedback mechanism and the fact that you can do the rapid
iteration right there on the platform. You have all of the
data at your disposal and you can pull levers at the click
of a hat in order to change and optimize and test. I think that’s the biggest thing. What about you? Anyone who has listened to a few of our
podcasts know kind of where my passion lies and what we talk about. But a major theme of
Iterative Marketing is getting the right message to
the right person at the right time and programmatic gives
us the means to do that. And Dax Hamman wrote
a really interesting article called Programmatic Storytelling. We’ll link to it in the show notes. And for me, this really helped to connect
programmatic and Iterative Marketing together. And in the article, he
discussed a lot of things, but he starts it out by comparing
programmatic to Legos. And a lot of people
are familiar with Legos, either you have kids and you
are stepping on them barefoot which is the worst
thing in the world, or you played with
them as a child. But alone, one Lego is nothing. It’s when you start
putting them together that you have the ability to build
whatever it is that you want and if you have
an idea in mind, you know that you want
to build this rocket ship, you start looking for those specific pieces
that you need to make that concept, to make that idea
come to fruition. And the same thing happens
with programmatic. We can take the idea
and we can take the goal and we can combine data and media
and timing and the individual intent when we are talking about
sort of that cross section between personas
and customer journeys and we are able to build a program
that balances our needs and helps to contribute to the overall
objectives of the organization. Yeah, I think that that’s
a really great analogy and really how we, at Brilliant Metrics
at least, approach programmatic and how we try to leverage it to take
advantage of all of this complex targeting and access to a variety
of different media to accomplish a higher
level strategic goal. How would somebody get started with
programmatic if they wanted to dabble in this? So, when you are ready to get
started with programmatic, the first thing to do is going to be picking
a DSP partner to place your media and the trick is finding one that has a
reasonable number or amount of minimum so you don’t have to play with
a big portion of your budget. Sticking to some of our other
Iterative Marketing principles, you want to start small and so finding a DSP partner that
allows you to do that is the key. And there’s a few out there. Site Scout is a great place
to sort of get your toes — dip your toes in the water
in terms of programmatic. Bluagile is another one. We haven’t personally used to that but we have heard it’s a
good option for those brands that are just wanting to get started. And I think a third option is Exact Drive,
which also has low minimums and gives you another alternative
that has a little bit more hands-on or hand-holding approach than maybe some of the
other options out there. And then we’ll also turn you onto a couple
of resources that we have run across that seem to do a good job of explaining
this in more detail than we have today because otherwise this would have
been an hour and a half long podcast, and well, that’s not what
you signed up for. So we will link to those in
the show notes as well. And as always, you are welcome
to shout out some feedback, ask us some questions at
[email protected] if there’s anything you’d like further
explained in a future episode. And in the meantime,
I want to thank everybody for making time
for us today again. And until next week,
onward and upward! If you haven’t already, be sure to
subscribe to the podcast on YouTube on your favorite podcast directory. If you want notes and links to
resources discussed on the show sign up to get them emailed to you
each week at iterativemarketing.net. There, you’ll also find
the Iterative Marketing blog and our community LinkedIn group where you can share
ideas and ask questions of your fellow Iterative Marketers. You can also follow us on Twitter. Our username is @iter8ive or email
us at [email protected] The Iterative Marketing Podcast is
a production of Brilliant Metrics, a consultancy helping brands and agencies
rid the world of marketing waste. Our producer is Heather Ohlman with transcription assistance
from Emily Bechtel. Our music is by SeaStock Audio,
Music Production and Sound Design. You can check them out
at seastockaudio.com. We will see you next week. Until then, onward and upward!

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