Introduction & Background

I’d like to just give you a little bit of an overview of programmatic advertising. What is programmatic? How is it changing the advertising and marketing landscape?

How many people who here, are even are aware of the term? Okay, so the two people at the back are exempt. Technology is really just agency-speak for automated, automated advertising and the buying that you’re doing through the likes of AdWords and Facebook, is a variant of programmatic advertising.

A good start for it is just to give you some kind of background as to where it’s come from and what you as advertisers have the potential to do with programmatic platforms and the different kind of creative opportunities that it brings.

Who are we? Louder is a consultancy practice and we work with the largest brands in the market, so everyone from airlines and banks and large corporates like that. We also do quite a bit of acquisition-based marketing for SME’s as well.

The Australian Programmatic Landscape

To give you a snapshot as to where the market is and where it’s going, I’ve pulled some current stats because everyone kind of talks about the future, ie “Yes, it’s going to be huge next year and the year after.”

Australia, state of the programmatic market

This is actually now, these current stats that you’re seeing, $400 million worth of total media spend in programmatic-advertising at the moment. That’s excluding search, that’s excluding social. Everything that we’re talking about here is display advertising, so any of the advertising that you are running on large publishers, be they print, TV, or any of those traditional broadcast media platforms. The shift is effectively democratization of access to those advertising placements. So where previously you would have had to ring up the publisher, request an insertion order, sign the insertion order or negotiate with them and then sent it back, emailed the creative, send all of your different variants of your advertising. Now it’s as simple as going through AdWords. You have an interface. You have a console and then in the same way that you configured your AdWords advertising. Programmatically now allows you to do the same with display, with video, and with mobile.

Programmatic – What is is?

I thought I’d just kind of break it down into some of the areas that you have the opportunity to start tapping into. One of the beautiful things about automated and programmatic media buying is that you’re not buying everything. You only buy the audiences that you wish to buy. In the same way that on Facebook you can choose custom audiences, if you got your own data you can upload your own data to an audience extension, programmatic advertising is very much like that. You can control all of the levers, all of the parameters that you can expose or restrict your advertising towards. It’s an auction model, where traditionally you might’ve approached a publisher and that publisher might say, “Great, it’s $25 CPM to buy all of this advertising.”

You may not know all of the publishers that your audiences are prevalent on. With programmatic, you can start to geo-fence and say, “I want to reach everybody across News Ltd and Fairfax who are in a 25km proximity to me. I want to know people who are going to be in my proximity or people who are in my proximity on a frequent basis.” So you can create an example of an audience of people up here on the Central Coast who have holiday homes. How do you identify people who’ve got holiday homes? Well, their mobile phone effectively gives you a beacon to say, “This person is in this proximity every third weekend of the month. So you can start to build rules around how are you going to reach those audiences.

Programmatic, what is it?

In the same way that AdWords optimizes towards your best-performing creative or your best-performing messages, programmatic advertising has the opportunity to do the same with your best video, your best variant of that video, the best website, the best time of day, or the best audience. All of those different levers and all those different parameters are completely in your control. Now, it may sound quite complex, but with Facebook for example, they allow you to do that quite easily with a product called the Facebook Audience Network. That is buying the Facebook audience across lots of other websites. So if you’ve got a segment that performs very well within your custom audiences, you can then extend that to buy across all of the mobile placements that Facebook have. You don’t know what those sites are, but it gives you a great opportunity to extend to that.

I’m gonna skip on the drivers of programmatic, because it’s kind of a bit irrelevant if we don’t know what it is. But the beauty of the accessibility of data in this kind of environment has changed the whole dynamics of advertising. If you have a large customer base, you can find more customers like your customer. If you have the circumstances where you know the people are interacting with your advertising and going back to that conversion piece earlier on if people are visiting your properties and you’re struggling to convert them, why? Try. You’ve got the opportunity to test different audiences. I have a great example of this with Hyundai. I worked on the Hyundai account for about four years and Hyundai launched a car called the Veloster, and the Veloster was targeted with all of their media buying and all of their advertising towards males 35 plus. The expectation was that men who have been kind of mid-life crisis would buy the Veloster. Completely incorrect, in this market, it turned out to be the first car for 18-25 year-olds, with a huge skew towards females, just because it was a good value, good-looking car.

The opportunity that the programmatic brings is that you can effectively save around about 50% on the cost of buying media through a media agency. If you have a budget up to half a million or a million dollars a year, you have the potential to exponentially increase your reach, not only because you’re getting twice as much advertising for that money, but you also have the opportunity to eliminate all of the wastage, all of the impressions that are not on target, all of the impressions that are not driving the outcomes that you want.

A lot of people in this market are looking at data usage as one of the primary drivers of this, really moving towards a data-driven marketing model, where you have the ability to attribute value to the channel that drives conversion. Out of the deployment of your data, of your measurement and analytic systems that you can derive from all of your advertising. You know, it’s not just about Facebook, it’s not just about, kind of, search, it’s not just about display advertising. How do those three work together? So stopping looking at silos and looking at a more kind of coherent view of what your media and what your advertising spend is delivering.

Progressive clients' thinking

With transparency, you see how much media costs. You see it at a granular level, you’re not getting something through an agency where they’re doing what happened with search 15 years ago. Was anyone here doing digital marketing 15 years ago? Okay. There’s a couple. Could you imagine circumstances now where I came to you with a proposition and that proposition was, “I will put you top-of-Google all the time for $20,000 a month. Full stop. That’s my only promise to you.” You’d choose the keywords, and I then kind of say, “Yes” or “No” to that proposition. You don’t know what cost per click that is. You don’t know how many impressions you got. You don’t know any of the metrics that we rely on that as digital marketing practitioners. That’s effectively what’s happening with kind of the whole display market at the moment with programmatic trading sat within agency training desks, not having the transparency as to what media actually costs. So there are huge transitions in that space.

The Evolving Data Ecosystem

The two bits that we touched on earlier on were the measurement and the experience piece. Obviously, if you got a very robust measurement framework, you can test and learn very effectively and move towards a data-driven marketing structure very, very quickly. It’s all very well and good in the data, but how do you tailor the customer-experience around that? That’s creative, exposure, and landing pages. That’s everything that is a touchpoint in the user journey, and that user journey is not siloed. You don’t want to just report on mass-click conversion. You’re on search, you’d be looking at the value of each individual channel over that whole period. There’s a whole evolving data landscape as well. If you don’t have data yourself, you can actually start to tap into other businesses in the market. You can buy data, and I’ve given two examples here. There are probably 15 or 20 that you can explore.

The Evolving Data Ecosystem

Someone throw me an example of a business. Can someone just kind of give me an audience that they’re trying to target, please?

Audience member: Bunnings

Andrew: Bunnings. Okay. I want to try to target Bunnings. Let’s say that I have a business like Red Planet. Red Planet is part of Qantas Loyalty. Qantas Loyalty has within their business group a business called Acquire. Acquire give points for purchases from business to business. I can start to then say, “I want to target tradies. I want to target people who open their own businesses at scale throughout the country.” Australia’s got the highest percentage, per head of population, number of small businesses in the world. It’s kind of enormous.

But you can lean into someone like Qantas to say, “I want to target small business owners. I want to target the people who work for small businesses.” All of those loyalty points that you get from your transactions at Bunnings that go into the Acquire program as well as all of the loyalty points from banking and everything else because they partner with Commbank as well. So you can start to build interesting segments and go to these businesses with your core customer base and say, “I want to target these people.” It might cost you a considerable amount more than you’re used to paying with News Ltd, Fairfax or some of the other large publishing networks. But the performance that you get out of it maybe 10x, 20x, 300x that of generic targeting. It’s about changing the thinking about advertising being a push-mechanism to…”Okay, we’re going to segment, but we’re gonna slice our push-audience into, let’s say, 1000-2000 people.” Scale is not everything in this mix. There are lots of new formats and new opportunities coming. I’ve talked earlier about how the democratization of the tech and the media. We’re talking about display advertising at the moment. In the not-very-distant future, it’ll be completely possible to target TV advertising at this level of granularity. In the UK, you can target an add at 60 households. That 60 households is one postcode. The same kind of technology is being developed here in Australia with Foxtel and Channel 10.

The point earlier on about video that I would disagree with about the investment in cheap video content. Obviously, if you’re paid to target people, I would invest as much in the creative as possible but still maintain a positive return. Obviously, there are variations on that, depending on your organization’s scale and budgets and everything like that.

At the moment, all programmatic’s equal. We’re used to a digital environment where we get reporting on everything. For a lot of these new emerging channels, that you are booking programmatically, you may not get the granularity of reporting that you may be used to with search, social, or display advertising. This will come with time. And it wouldn’t surprise me in the not-very-distant future if you see Google and Facebook with a very strong TV play. They work with a lot of the large publishers and they have lots of publisher products and technology, and that is almost certainly going to result in you being able to get access to those things reasonably quickly, depends on the adoption.

Emerging Formats in Programmatic

So, I think I kind of covered much of the stuff about looking forward as to where the market’s going. The opportunity, in short, is really to be an early adopter in this space, you know, a bit like search advertising was. Even in Australia, like six or seven years ago, where there were lots of businesses who spend an awful lot of money but don’t derive a huge return, if you’re agile, if you’re clever, if you are quite tactical, you can derive significant value, early-stage, because everything’s performance related. You only spend what you need to spend and you only continue investing in the channels that actually deliver you substantial returns.

What would I do if I was driving?

Four things that I would take away.

  1. Data-led Decision-Making.
    You know, I was kind of resonating at the talk earlier on about kind of test-driven data being the single source of truth. Has everyone heard of HiPPO in an organization, the highest-paid person of opinion? Generally, it’s kind of the CEO who goes, “Oh no. I don’t like it.” Don’t go to those decision-makers without actually having the data to validate it. If you run an AB test, and page 1 vs. page 2, we saw a 30x increase in revenue, that that to the CEO, the CEO is not going to say, “I’m going to take a negative revenue position,” ultimately they are there to derive incremental financial growth of the organization.
  2. Creative Formats
    Touched on earlier on. Explore dynamic content, personalized content, and video. Video that works for mobile is pretty hot, even if you’re creating that video content just for Facebook, you’ll actually start to see the returns.
  3. Programmatic Everything
    My word of caution is that the price of Facebook video advertising and the price of Facebook advertising, full-stop…I know it was kind of commented that it was really expensive. The scale of it is enormous. You can burn a huge amount of money doing tests. Be very concise in defining how big your tests and your samples are. I actually saw someone at a media agency put an extra two zeroes. They thought they had a decimal point on a Facebook media campaign and they blew an enormous amount of money before anyone realized, because Facebook just has such scale. Obviously, now it’s not just Facebook. It’s Instagram, everything that’s kind of up to that.
  4. Own Your platforms and Data
    The last point on your platforms and data. Do not let a third party tag your website. Do not let a third party own your analytics. Do not let a third party have control of it, because in this whole emerging programmatic landscape if you’ve got people who have tags on your website, they’re effectively collecting your audience. The collection of an audience might seem superfluous really, but they’ll be selling it to your competitors. If your competitors are actually quite progressive, they’ll be leveraging the techniques that I’m talking about here, they will be using data, they will be segmenting. If your site is tagged with data and you don’t know what that data is actually being used for, and I’m talking about share buttons and things like that, eg a share button that posts to Facebook and Instagram and Pinterest and all that kind of stuff, those businesses sell that data. That’s why the tool’s free and the people who are buying it are people like your competitors or other businesses who are competing in the market with you.

What would I do if I was driving?


View Presentation