Ask the Experts: Programmatic Advertising QnA

November 29, 2017

Recently I got to to sit down with two members of our excelerate Digital Programmatic Advertising team Helene Fernandez and Sanarr McLaughlin. Both of which have very deep understanding and extensive background in the programmatic media space. We kept this session pretty high level in regards to programmatic advertising so sit back grab a cup of coffee and enjoy. Read time should be ablout 5 - 10 mins. 

 

DUSTIN:

So what is programmatic advertising?

SANARR:

In popular terms people like to reference programmatic advertising as a way to capture a ton of inventory really cheap...and that's the extent of the definition. It has become an all encompassing buzzword for all display media. In reality programmatic is just an automated way of buying media through a single platform where you can capture a lot of inventory at a predetermined rate that is within the efficiency of your campaign. You set a bid and you capture as much inventory as possible on that bid.

Programmatic101 Excelerate.jpg

HELENE:

Yes programmatic is simply a fancy word for automated. Let me take you back to 1950s when Don Draper walked into an agency to make a media buy. That's not automated it’s the old school traditional ways of buying media. Now fast forward to the 2000s most recently in the last 5-6 years programmatic media buying has enhanced the way we buy digital media. Programmatic should be a technical word. It's almost like an adjective.

SANARR:

Used as a noun.

HELENE:

It should be programmatic media meaning automated media where we buy through technology.

SANARR:

I think a common misconception is people think programmatic is a synonym for real time bidding in an all encompassing way. Which is kind of true because it is real time bidding. However we've been doing real time bidding and display for several years before programmatic become hot and sexy. It's just that you had to work with individual exchanges and ad networks whereas when you're working with a programmatic platform also known as a DSP (Demand Side Platform) you can buy across multiple exchanges and multiple publishers implementing real time bidding on a much larger scale than you could before. There are still limitations to programmatic media buying. There can be less transparency than you would have working with individual publishers depending on the reporting capabilities of the DSP or you miss out on receiving brand preference from publishers where you have direct relationships.

DUSTIN:

What are ad exchanges?

HELENE:

The ad exchange is the tunnel that allows us to get to the place we want to get. (one of the larger ones we use is Google's DoubleClick. See video below)

SANARR:

Look at you using imagery.

HELENE:

The DSP the demand-side platform is where it starts. The demand-side platform sends the order which is just the media buy through the tunnel to the publisher side (also known as an SSP Supplier Side Platform).

HELENE:

Examples of ad exchanges are Yahoo DoubleClick...

SANARR:

AOL.

HELENE:

Google there's SpotX. If you were speaking native there's Yieldmo amongst a lot of others. If you're speaking TV there's TubeMogul now Adobe. There's also Adap.tv. There's a few ad exchange out there. I know that in our DSP which we use DoubleClick Bid Manager here at excelerate Digital and we have access to up to 42 exchanges!

SANARR:

Right. What I love about what Helene just said is that it immediately goes into what I think about which is the Display LUMAscape (see image below) when you talk about what is an ad exchange. The LUMAscape is confusing to look at but at the same time to me the best visual when you're explaining all these moving parts.

SANARR:

This is really really confusing to somebody if they were to look at it on their own at home on a Saturday afternoon. Using it as a visual when you're talking to a display marketer to explain it's really good. If you start on the left side then you see you have your agencies and then you have your trade desks. You have platforms that make it easier for agencies to manage everything else on the rest of the LUMAscape. When you get into the DSP this is the platform that you're using to buy from the exchanges. Before programmatic before the DSPs existed agencies went straight into the exchanges...

display advertising lumascape.png

HELENE:

...and Ad networks.

SANARR:

Back in Don Draper's days marketers were going direct to publishers. Programmatic is the latest layer between the advertiser and the consumer as marketing becomes more intricate and complex.

SANARR:

Programmatic is a way of buying. Ad exchanges are a platform to purchase from. DSPs are a platform to purchase through. SSPs are a platform to sell through and then on either side you have brands and websites aka publishers trying to talk to each other through all this technology.

DUSTIN:

Why would I work with an agency like excelerate or a professional like you guys to manage my programmatic ads versus trying to do it myself?

HELENE:

Actually it goes back to how it's being bought. Real-Time-Bidding (RTB) came from the way it is bought in the auction. It got the name real time because it literally take one hundred milliseconds for a buy to happen in the exchange It takes less than a hundred milliseconds for DSP to make the call for it to go through the exchange to go to a network or to arrive at a SSP. That's faster than blinking your eye. Literally.. That's why we call it programmatic real time bidding because we're automatically bidding faster than you can blink to serve that image or serve the ad onto a website. The advantage is it's faster but you have to trust the technology.

SANARR:

In addition to the fact that using the this kind of platform technology allows you to capture impressions drive traffic or whatever your goals are faster than you could possibly ever do it manually in a more efficient way than a human could do it.

HELENE:

You want to use an agency trading desk meaning you want to use an agency that is only handling this type of buy when it comes to digital marketing.

SANARR:

Right. The difference being an agency that's just going to work directly with a media partner or work with their own DSP. A team with an internal DSP is going to run the client's campaign more effectively than an agency buying through media partners who will run campaigns on their behalf.

HELENE:

Correct.

HELENE:

That would be one of the biggest advantages to hire an agency trading desk that knows the technology that understands the intricacy of the technology and that is in there on a day to day basis. Any other digital agency would place this buy through an agency trading desk meaning through somebody that's actually performing the buy.

SANARR:

Right.

HELENE:

Programmatically.

SANARR:

The best that a client can do is work with an agency that's going to do all that stuff in house. That they're going to have a trading desk they're going to have resources like ourselves that really understand the different levers that there are to pull within the platform to have the most efficient buy. Even though it's automated the planning the setup the management of it still requires...

HELENE:

A human.

SANARR:

A human. An actual thought. Which also is one of those things where people think programmatic just happens by a robot.

HELENE:

It's magic!

SANARR:

Right it's not. It requires a human to sit at a computer and manage it.

HELENE:

Here's the way I will paint the picture here. You have a train there are destinations A to Z on a single path. In our cases its multiple paths because there's more exchanges but bear with me. You need a conductor to conduct the train. It's the same way but the conductor is not actually literally putting in gears for us. It stops or it starts.

SANARR:

Exaclty! Or Its just like an airplane. You have pilots and even though airplanes can fly on automatic we still want to have a pilot in the cockpit. . There are a lot of buttons to monitor!

DUSTIN:

I love these analogies. Keep them coming.

SANARR:

There are a lot of buttons there are a lot of options there are a lot of things to tweak within a media buying platform. You have to know what you're looking at. You may not be touching all those buttons all day long but somebody needs to be there to be like "Oh that button just turned red. That's not good." The system is just going to turn the button red and keep moving.

HELENE:

Yeah that's correct.

SANARR:

For a client a business owner who is pulled in different directions of a business programmatic media buying can’t be their focus. If a client doesn't have an in house dedicated resource to buying media then they're going to find it hard to set up comprehensive campaigns and spend efficiently. It's going to be really hard to make decisions that are going to drive goals effectively. It's a waste of resources of their marketing budget and of their time for them to try and conquer media buying on their own unless they're willing to spend the resources to build an internal marketing team that's going to manage that for them. Otherwise go to an agency and let them run it for you.

HELENE:

We can see that question in two ways. Who exactly are we speaking to? If you're speaking to a brand or a client themselves directly and asking them why should you work with an agency versus you the client hiring your own. Like Sanarr said it becomes a little bit more cost efficient for the client. If you're just now entering the field or the realm of programmatic you need expert advice.

SANARR:

Yeah.

HELENE:

Sometimes if you don't have the bandwidth in house it makes sense to hire an agency. Like Sanarr said the agency has to have some experience in the industry.

SANARR:

Right.

DUSTIN:

Right.

HELENE:

If we are talking to another agency that specializes in other channels of marketing let me tell you about excelerate competitive advantage. Well we have a full house of in-house strategists with over 15 years on both sides PPC display and social ready to take over for you and walk you through that process. Maybe eventually as an agency you will start your own department and that's fine. That's okay. You can try this. If you are this agency that is offering more traditional services or more graphic designing services or plain only PPC services and you want to expand your realm of service because most of your clients you want to be that one stop shop for your clients then you want to consider keeping certain things in house and acknowledge that other agencies like agency trading desks like us are fully committed to display and programmatic media buying.

SANARR:

Right.

HELENE:

I think this questions is really relevant for both. As a client whether it's a ten year old client a 50 year old client or two years in you still want to be able to hire a trusted source and you might want to look at how advanced or how fluid is the knowledge when it comes to this type of technology because let's be real everybody's offering the same service. Our differentiator is we bring experience we walk you through that process of programmatic buying and we allow you to have real time reporting and explain to you and educate you. At some point we don't become the advertisers' marketing team we become part of the education of this industry because it's still a new industry in my opinion. It's less than five year old. 

DUSTIN:

What kind of money can I assume to spend on programmatic advertising?

SANARR:

In parts of my past I've worked with clients that are really really small businesses and I know this is about programmatic but then there's this whole aspect of social too. Social's hot and everyone's like let's do everything with social and I heard that I can have a budget for $25 and I can get a lot of revenue from that $25 on social. It's a lie and it pretty much works like this for programmatic for social for digital buying period. You are going out and you are finding a person and you're being charged a certain amount of money to find that person. The amount of money gets more expensive the more unique that person is. If I say I want to go out and I want to find all of the men in the United States and serve them an ad that person is going to be less expensive to find. The budget will stretch further. If you say you want to go out and find all the red haired men with doctorates like wine and are planning to travel to California next summer it'll take more of your budget to serve an ad to one of those people. I say that to say it's hard to tell someone how much they can spend for their marketing activities without knowing who they're trying to target and going back and checking how much available inventory there is for the person that they're trying to reach.

It's a formula. You take how much it costs to reach that person how many of those people are out there multiply those two numbers and then that gives you what your budget is. Then we can make some recommendations like it will cost $5000 to reach every single one of those red haired men that have a doctorate like to drink wine and are going to California next summer. The inventory is so large on that $5000 we can reach only half of those people to reach your goals and you actual budget should be $2500. The way I like to answer budget questions is not to say "Oh if you put $25 in it you can get what you need" or "If you put a million dollars in it you can get what you need." The question is what do you need. What are you looking for. The beauty of digital the beauty of display the beauty of programmatic is that we have a resource that we can go to and do the necessary research to come back to you with true numbers on what budget you would need to reach those specific goals. It can be $100 based on what you're trying to do. It can $100000. If anybody tries to sell you a media plan and says "I can get whatever you need for $1000 budget".

DUSTIN:

Red flag!

SANARR:

And they haven't done any research they're lying to you.

HELENE:

At my old agency account managers used to hate when I'd give them that answer but it's the truth. It really depends on what we're trying to accomplish here. We have such a powerful and robust technology that allows us to target an actual behavior versus a site which is much much more relevant to target somebody that fits your behavior or your consumer. Because we have that ability it's really hard to determine you need at least this. Piggybacking on what Sanarr said the more information you can give us the better we can decide or we can help define this budget the floor price or the floor budget here. You don't want to go below this because we're not accomplishing what we're supposed to accomplish. With that being said unlike traditional media buying the larger the deal the less expensive the CPM for instance. Why? We are targeting everybody. Programmatic media buying. Why is that even existent and in existence? Programmatic media buying allows you target somebody at the right time target the right person at the right cost with the right message.

So how many messages do you have? How many consumers do you have? If you are not able to answer those questions this is my advice go back to your consumer base at this moment create three four five seventeen personas. Based on those personas go to your agency come to us. The display channel is a great way to target a consumer at an awareness level an interest level consideration or in a need state. Programmatic display allows you to turn somebody that is at the top of the sales funnel which is just brand awareness into a considering consumer into a consumer that needs your services. In order for us to provide that type of information we need to understand what type of people are already coming to you. There's also the situations where an advertiser or client decides most of my personas or most of my consumers right now are only spending $500 per service. I would like for them to sign on for more than one or two services. I want the clientele to continue coming to me for the same service but also sign up for others.

In that case we want to have a little bit more budget because what we're doing is changing somebody's decision making and that's super important and that takes time. With a larger budget we have the ability to continue targeting that person and helping that person. Literally holding that person's hands and walking them through the decision making. Walking them through the path to the purchase process by serving them a relevant message at each stage of them being online without creating anything called and what I like to call brand fatigue. I'm not going to serve you fifteen hundred times in 24 hours. You don't need it. Also if the client came to us it's because they trust us. If I represent the brand I need to the consumer to trust the brand. We need all this information to answer that information. Every account manager hates that answer. Come to me with a consumer base with some information...

SANARR:

And I'll give you an exact number.

HELENE:

Exactly.

SANARR:

Not even the budget estimate. I'll give you the exact number.

HELENE:

I'll let you know this is what we think we can do like true magic for you. This is what we will provide in return and we will clearly set a realistic expectation with the clients. You should expect this to happen based on our research based on our technology based on our bandwidth. It's hard but it really depends on the client at this point. How much are you willing to bring in? The larger the budget's the larger the ROI if the goal is clearly communicated and if the marketing objectives are also clearly communicated. The marketing objectives could be "Let me sell the cars" but a goal for us may be bringing the right eyeballs on the correct page and trying from there and reporting and measuring success from that page. I can't get you a dollar.

SANARR:

What's funny is that this is also like the answer to your last question. This is why you hire an agency to do it.

Dustin: 

Thank you ladies for your time and intelligent answers! 

You can connect with Sanarr on LinkedIn here and Helene here

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