Programmatic advertising

first came across the technology that now goes under the name of programmatic in 2012 when I was introduced by a friend to re-marketing. However, it was only in 2014 and into 2015 that the term gained in popularity – perhaps because that was when use of the technology became more commonplace.

Note that I appreciate that automation has actu- ally been around marketing for decades for example, software used to automatically insert names and addresses from a database onto the letters and envelopes sent to consumers by post as direct marketing but the new programmatic technology works in real time. S what is programmatic marketing? I’ll start with my definition: programmatic market- ing describes the use of software to replace humans in the purchase and delivery of digital marketing content, predominantly advertising (it is estimated to represent around 75 per cent of all online advertising). However, as has been the case with many – if not most – terms used in digital market- ing, I’m not sure there is an absolute definition.

Such is the nature of software development that any definition comes during that development, and very often the term describing it comes from those responsible – the computer scientists.

Programmatic comes – presumably – from the fact that functions are programmed. But everything related to computers is programmed, so why did we get a term dedicated to this aspect of marketing? Indeed, a couple of years ago it was more commonly referred to as auto- mated marketing – which I prefer as it gets closer to describing what is going on, particularly if used more specifically such as it is in automated advertising (a term favoured over programmatic by the Interactive Advertising Bureau).

Then there is the term data-driven marketing, which seems to be the same thing as programmatic.

However, to add to the confusion, the computer folk refer to the use of programmatic in the term programmatic media. This is evident in the Wikipedia entry for programmatic media, which does not dif- ferentiate programmatic media, marketing or advertising – effectively suggesting all three terms refer to what marketers recognize as being advertising, and not marketing.

● AdSense is part of the Google Display Network – and refers to text, image, video and rich media adverts that are delivered on third-party sites and are relative to the site’s content and audience.

● Google AdWords is part of the Google Search Network – and refers to the ads that appear on the Google SERP and other third-party sites and are relative to the search term used in a search.

The Google Display Network is sometimes described as the parent of AdSense and AdWords, but Google depicts it as the network of websites whose publishers have agreed to host Google ads of any kind. Any reading around Google’s online advertising service will reveal mention of DoubleClick – which is part of the support service Google offers publishers and advertisers.

The problem is that much of what is written about Google’s advertising is written by people who – I believe – do not fully understand the subject themselves. For example, I read one authoritative description of AdWords which stated that the system works only on SERPs – and yet Google says explicitly that it delivers AdWords ads to SERPs and other websites in their network. Furthermore, Google doesn’t help – I came across one help page on Google.com which carried the title: About the Google Display Network – but the video on that page was titled: Google AdWords. Wikipedia’s entries for these subject areas seem to contradict themselves – and carry the ‘this article has multiple issues’ warning accordingly.

This is also reflected in how advertising takes centre stage in the other listed articles – I wonder if programmatic marketing will actually become programmatic advertising? Or should that be vice versa? Or is it only a matter of time before other aspects of digital marketing – influenced, no doubt, by those promoting the use of artificial intelligence (AI) – get the programmatic prefix?

Muddying the waters still further is the question of whether programmatic marketing is part of marketing technology – or MarTech as it is often known? I would see it as a natural subset – but if you type “marketing technology” into Wikipedia’s search facility, it redi- rects you to programmatic media. Or is there an argument for all digital marketing to be part of marketing technology? Or is it that all marketing technology is digital? Or is it all just mar- keting? Maybe by the time we get to the fourth edition of this book, the titles will have sorted themselves out.

I’m not holding my breath. Indeed, the more I research the subject the more confusing I find it, so my caveat is this: if you are reading or watching a video on this subject, be aware that definitions or applications of the terms used may or may not concur with those of others – including me.

This confusing state of affairs is exemplified by Google’s advertising provision – one of the largest on the web. In the previous edition of the book, I included a description of Google’s system – which took me many a long hour to compile.

Upon reading it in preparation for the chapter you are now reading, I spent several hours checking that I still had it right – and my conclu- sion was that if I didn’t have it spot on, I wasn’t far off. Here’s my updated version:

Does online advertising work?

Such is the nature of this book that it aims to educate its readers about the various ele- ments of digital marketing covered within it. As you discovered in (where it was revealed that only around 8 per cent of purchases in the US are made online) and you will discover in (on social media marketing), questions have been raised about the effectiveness of some aspects of digital marketing.

Indeed, I allude to this issue in Part I of the book where I question if digital marketing is required by every organization, brand or product – and just how much buyers rely on the web for the purchase decisions. So it is, therefore, that the effectiveness of online advertising has been brought into question. As with other elements of the discipline, the success and how essential digital advertising is tends to be trumpeted by those selling tools or services to be used for placing ads on the web.

Google and Facebook spring readily to mind. Here’s some research that might help determine if online advertising works or not. Concentrating on advertising on mobile devices, research from Yieldmo (2016) found, amongst other things, that two-thirds of consumers consider the current state of mobile ads to be frustrating, disruptive and boring and that 86 per cent of respondents found the most common mobile ad format (the static 300×250) to be the most forgettable. Ads on mobile devices are, it seems pretty much uni- versally disliked – they topped the poll of most widely disliked forms of advertising, con- ducted by HubSpot (2016).

Significant to this book is that six of the nine most disliked were forms of online advertising. In general, those types of ads that are easier to ignore were least disliked (but still disliked).

The full results of the survey can be seen in The same research found that 34 per cent of people who clicked on ads did so by mistake and that the main reason for installing an adblocker was to be in control of their Internet experience. Search advertising fares little better – research from UK company Varn (2017) found that only 8.4 per cent of searchers actually clicked on the results page ads.

Objectives and management

The objectives of any ad campaign – and there should always be specific aims – will largely determine the nature and type of ad used, how it is managed and what analytics should be used in tracking its results. Like its counterparts in traditional media, the objectives of online advertising can be divided into two categories: 1. Direct action – ads that seek to elicit a reaction from consumers. Although this is usually income-generation driven (click here to take advantage of this limited offer), or to inform customers of a particular promotion (50 per cent off in store this weekend), the action is not necessarily a sale – it could be to sign up for a newsletter, register a vote or make a donation to a charity, for example. Note that lead generation – more common in B2B trading – is part of direct action, with the ad being designed to per- suade the reader to contact the advertiser with a view to discussing a potential purchase.

2. Branding – ads that reinforce consumer perception of the brand, organization or product by frequent exposure. Although it is not an exact science, there is general consensus of opinion that display ads are best used for brand building while direct action ads are most effective in textual format.

Text-only ads These can be divided into two categories: (1) stand-alone and (2) within textual content. 1. Stand-alone text ads. These are probably the most common type of online ad (sources on the subject differ, and none seems absolute as ad definitions within surveys are mixed) if only because they are used by the search engines and network ad provid- ers.

Not only do these ads appear on nearly every SERP, but their easy availability to any website publisher has resulted in them being (almost) ubiquitous on any site that is not published as part of the online marketing strategy of a specific company, brand or product.

Depending on the network used, the format of these ads will be fixed, though they will normally have a headline, body text and advertiser’s name – with each having a character-related limitation. 2. Text-link ads. As the name suggests, this kind of ad is one that is embedded within a line of textual content on the web page. The concept stems from the practice of making links out of references to a product within textual content. It is, however, problematic for publishers to insert such ads because they can impact on the actual content and distort the natural flow of the narrative. They can be effective for social media content such as blogs, where the writer seeks income from their work.

For example, on a movie review blog the author might include an article on Brad Pitt – with the name being a hyperlink to a page selling the movie star’s autobiography. The blogger would receive income on a PPC basis. Although once popular, the practice died away somewhat when, around 2013, Google penalized such sites in its search algorithm.

There are three main ways of paying a publisher (or their agent) for carrying your ads. Before looking at these in a little more detail, it is worth noting that (a) in online advert- ising the terms are routinely referred to by their acronyms, and (b) where I have used pay, the word cost is also sometimes used – and so the two have become interchangeable.

The three common methods of payment are: 1. CPM (cost per thousand impressions). Used almost exclusively for display ads, pay per impression advertising is not unique to the online environment. In case you are wondering, the ‘M’ – the abbreviation of the Latin for a thousand (mille) – is used because ad impressions are sold in blocks of one thousand. The cost will depend on the sites that carry the ads, but might vary from around 50 cents to a dollar per thousand for non-prime sites to 10 dollars or more for brand-name sites – though obviously, the more traffic a site has, the quicker your ad budget is spent.

Note also that ad cost is almost exclusively calculated in US dollars, no matter where in the world you are. However, that the Internet Advertising Bureau’s definition of what constitutes a successfully served ad is that 50 per cent of the ad must be seen for at least a second is hardly encouraging to the marketers paying for those impressions.

2. Pay per click (PPC). The advertiser pays only on performance by paying for each click made on the ad. So, no clicks, no fee. The system is also known as CPC (cost per click) and, less commonly, pay per action. The latter being where a visitor might complete an action from the ad, ticking a box to receive a newsletter, for example – and the publisher receives a (higher) fee only if the action is completed.

The cost of PPC varies wildly and is largely dependent on the keywords being purchased . According to Google, the average CPC across all industries is $2.32 for search ads, and $0.58 for display ads. Clickthroughs might range from a few cents to hundreds of dollars per click. 3. Pay per call. Popular in some industries – insurance, for example – this is where an online advert, or associated website, features a freephone number and software tracks any contacts made through that number and a fee is paid for each call.

The fee charged for pay per call is higher than other pay-for-performance models, but the advantage to the advertiser is that callers are more likely to be high-quality leads and so the chances of achieving a sale are also much greater. Measuring the effectiveness of ads has moved on significantly in recent years.

At the turn of the century, analytics would tell you only how many visitors had clicked on a banner. Now it is relatively easy to find out where they were (geographically) and what web page they were on when the ad was displayed. Not only that, but you can track the ad-derived visitors’ path through your site all the way to (hopefully) a purchase.

As with website and email analytics (you will use some of these to track ad results), ad analytics can be done in-house, be outsourced or be part of a service offered by an ad network.

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