Programmatic – an overview
Speaking to the industry, the first thing to note is that some marketers operating in B2B have only a vague idea of what programmatic advertising is, let alone why it could be relevant to them. For those that do, please forgive this brief digressional overview of programmatic advertising and what it has the potential to deliver.
In essence, programmatic is an attempt to solve that hoariest of marketing clichés: ‘I know half of my marketing is working; I just don’t know which half’. Traditional display advertising – billboards, newspaper and magazine adverts, TV adverts and so on – has the ability to reach a lot of people, but a marketer has little to no control over who sees that advert. No one has the power to know who’s walking past a billboard, and even with some demographic knowledge – e.g. The Guardian versus The Sun – advertisers are still trying to paint with the broadest of brushstrokes.
At the start of the digital age, advertising was still traded in similar fashion: an agency with an advert to display would physically contact a publisher with advertising space – most typically in the form of banner or skyscraper space – and agree a deal for that site to host the advert. Thus, every internet user visiting, for instance, The New York Times webpage, would see a banner advert for Gucci and a skyscraper advert for MasterCard. Once again, a marketer could make a broad inference about the kind of person who would get their news from The New York Times, but no more than that.
In the noughties, this all began to change with programmatic advertising. Responding to both the massive proliferation of advertising space and the desire of both marketers and publishers to use online information to increase targeting, technology companies adapted software and techniques from the financial sector to trade advertising in online programmatic auctions.
In essence, a programmatic exchange automatically pairs the best advert to the best site, either through behavioural targeting or contextual targeting. Behavioural targeting means a car advertiser putting their advert in front of internet users who are likely to buy a car based on a host of demographic data: age, gender, location, interests, time of day, weather, device and so on. Contextual targeting means placing a car advert on a webpage where there is likely to be content relating to cars. A programmatic exchange can then buy digital inventory through an auction, one impression at a time, in places a defined audience is browsing. Marketers can also go a stage further, personalising adverts according to a user’s unique interests and behaviours, to both increase the chance of making a sale and generating insights for future campaigns.
Problematic problems
While that all sounds promising, there are issues with programmatic that at least partially explain why B2B marketers are still yet to be drawn to it. The first is that, as a sector, B2B has traditionally had a bias towards content-led marketing (whitepapers, email campaigns, DM and so on) rather than media marketing. As Richard Robinson, MD EMEA at Turn, puts it: “In B2B there is a nervousness about investing in ad tech. So while there has been significant investment in marketing automation (MA) tools, programmatic is still seen by some as irrelevant.”
Second, there is a question of scale. When asked to reflect on the lack of programmatic take-up in B2B, Simon Douglas, MD of Curated Digital, hypothesises: “I guess it might be because most B2B campaigns are targeting very specific audiences, but these types of advertising routes are large scale, targeting quite broad audiences, so there would be a lot of wastage.”
This seems to be borne out by Sylvia Laws, MD of Technical Associates Group, who has been delivering localised, pan-European and global advertising campaigns across a range of B2B markets spending over £3 million per year on media buying for its clients across EMEA: “We’ve used programmatic buying for our clients in the past but have found that the majority of the portals that we need for our niche and specialist markets are actually not on there.”
This seems to be a common thread across the industry. Many B2B companies seem to have experimented with programmatic when it was a shiny, new tool; but after disappointment with results, as well as the inevitable problems associated with any new digital tech, they have decided it is not worth their time.
This is something that ad tech firms acknowledge. Harvey Sarjant, director, data and business development, Europe at RadiumOne, says: “For those B2B companies who may be struggling [with programmatic], it’s about educating clients, agencies and creative agencies about the opportunity of programmatic. That hasn’t happened in any major way thus far and you need to make programmatic a real passion point for B2B’s creative agencies – not a chore – if they are to become more engaged.”
Programmatic solutions
In fact, this movement to engage with and educate B2B companies about the benefits of programmatic is well under way. Graham Wylie, senior director EMEA & APAC marketing at AppNexus, is extremely positive about opportunities for B2B to take advantage of programmatic solutions: “In many ways, B2B is better placed than B2C to reap the rewards from programmatic advertising because [B2B companies] tend to have a much better idea of who their customers are and have the data to prove it.”
Robinson agrees, arguing that B2B is an ideal place for a programmatic approach because: “They know what their good customers look like. By starting with their first-party data and enhancing it with second- and third-party data, they can find lookalikes and target marketing efforts directly to those people.”
As B2B moves, ever more, rapidly away from its roots in feature-heavy technical content and towards storytelling and emotional marketing, programmatic advertising is an opportunity to ensure potential customers are being served with customised content at every touchpoint, in the right time, in the right place and on the right device. In fact, it’s the logical next step following MA. As Robinson concludes: “The future of B2B will be linking programmatic advertising with MA so that marketers can achieve continuous engagement with their customers.”
Admittedly, you would expect ad tech firms to sing the praises of their tech. And both Robinson and Wylie admit the industry as a whole has not helped itself in attracting B2B clients. Engaging with programmatic advertising means learning a lot of three-letter acronyms fast – DSP, SSP, PPC, CPM, DMP and so on – and conversations with those on the provider side can thus prove baffling, which can be confusing and also give wary marketers the notion they’re being sold snake-oil.
Will Proops, global head of revenue at Axonix, acknowledges this issue, and laments the entry of shadier elements into the programmatic space, which give everyone else a bad name: “It’s not that difficult for tech companies to enter the market – the physical overheads are very low – but verification in reporting is more costly, so there are cowboys. Particularly in the early days, programmatic exchanges were promising to pick you up in a Ferrari but turning up at your house in a beaten-up Ford Fiesta.”
Ad blocking and native advertising
While ad tech companies are realising there is work to be done in attracting B2B companies to programmatic – and are actively doing that work – the case is further problematised due to the current intense media focus on ad blocking and the impact this will have on programmatic digital selling.
Sarah Kiefer, senior marketing manager EMEA at Ooyala, summarises the problem ad blocking poses: “Ad blockers reduce the amount of inventory available for publishers to sell, programmatically or otherwise. Fewer people viewing ads means smaller audiences to monetise, and, therefore, a smaller pool of inventory for brands or agencies to buy to reach customers. It’s a cascading effect that results in loss of total revenue and a disconnect between growing audiences and growing revenues.”
However, those in the industry offering digital advertising that shuns the intrusive online adverts we’ve all grown to hate so much – banners flashing ‘click on the iPhone’, expanding videos that can’t be closed, ads making noises while you’re viewing content and so on – welcome the challenge of ad blocking as an opportunity to reclaim the image of programmatic as a sophisticated technology that is good for web users. Neil Joyce, MD EMEA of Signal, argues: “The rise of ad blockers is evidence that advertisers haven’t kept pace with user expectations when it comes to relevant, timely content. Ad blocking is forcing advertisers to make programmatic work smarter to give customers what they want – relevant, timely messages that don’t intrude on their online experience – and therefore, could actually catalyse positive change in the industry.”
A large part of this change is already happening with the growth of native advertising and the improvements in the technology able to service this content programmatically. Native content – in simple terms, advertising content that blends in with the editorial content surrounding it – is seen as a counter to ad blocking precisely because it is non-intrusive. Combined with programmatic technology, it has the ability to go one stage further and actively improve user experience by providing content to web users that is useful, entertaining or engaging in its own right while also promoting a product or service.
Programmatic is coming
With all the advantages and benefits it can offer, it is inevitable that we will soon see more B2B companies taking a closer look at programmatic. A number of big B2B companies are seeing great benefits from programmatic – Microsoft, Forbes, Gartner to name but three – and where success is in evidence, others will follow. As Wylie says: “The space isn’t overcrowded with B2B and is very cost-effective, so it is an attractive option. There won’t be a stampede – but for those who have their data in order and the budget to try it, it’s a massive opportunity.”
That said, it’s undeniable that, for all the above reasons, programmatic still does have something of an image problem among B2B marketers. Educating marketers about the benefits of programmatic is only the start – there’s also an imperative for ad tech companies to speak to marketers in a language they understand, finding a way past all the acronyms, and talking about programmatic in terms of customers and creativity, not impressions and technical features.
Perhaps, in fact, 2016 will be the year that programmatic comes to marketers, not the other way round.
