PROGRAMMATIC 101 Don Draper Didn’t Know About Programmatic Advertising, But Now You Will

By Colby Horton

In today’s new COVID-19 world of social-distancing, where so much of our time is now spent online and in digital interactions, it’s more important than ever to have a presence in the places your customers and potential clients are visiting on the internet. Understanding how to go about that can sometimes be a challenge so we’ve asked IFEA Partner MultiView to give us a basic overview.

For many people, the extent of their perception of how advertising works is the classic AMC series Mad Men. Don Draper and his cronies sipped on whiskey while creating iconic and impactful campaigns. Though the show was commonly lauded for its devotion to detail, that was the 1960s, and plenty has changed on Madison Avenue since then. In fact, it’s safe to say advertising today is a world Draper wouldn’t even recognize (and maybe not approve).

One of the obvious changes since Mad Men is the evolution of digitization, technology and, more specifically, the internet. These things have understandably had a dramatic influence on marketing and advertising as the way we research, shop and purchase has changed. This modern landscape has provided both challenges and opportunities for marketers. For companies, the goal remains the same: inform prospects and increase sales. But how this happens is much different.

Businesses in any industry know they need to market and advertise for success. To do so effectively, it helps to have at least a foundation of knowledge about how to approach it. One word in particular has gained use in recent years while generating a fair amount of confusion in its wake: programmatic.

You may have heard the term; maybe you even tried to learn about the term. Because of its role in the current digital advertising environment, it’s worth your time to know a little bit about it. What does it mean? How does it work? Most of all, how can it help you?

While is a part of online advertising, it isn’t synonymous, so how about we finally clear the waters and provide the 101 about exactly what programmatic is and whether you can use it to your benefit. Let’s start as basic as it gets, with a definition.

Programmatic Defined

Simply put, programmatic is the use of software to buy digital advertising media. It’s an alternative to the traditional “direct buy” process in which humans negotiated prices, used RFPs (request for proposal) and manual insertion orders (Don Draper would be familiar with this process). With programmatic buying, computers decide where to buy ads and how much to pay for them.

Programmatic advertising is commonly thought of in terms of display ads, but keep in mind that programmatic isn’t a type of advertising – it’s a method of buying and placing advertising. That means programmatic can relate to social ads, audio and video ads, native ads and even outdoor (out-of-home) ads.

The technical aspects of programmatic buying can get pretty complicated pretty quickly, but just like you don’t necessarily need to understand how a jet propulsion engine works to know it gets you from one place to another in a hurry, a basic working knowledge of how programmatic buying works will help you understand how and why the process can enhance your marketing efforts – and that’s the most important takeaway, how you can use programmatic to your advantage.

How Programmatic Works, Simplified

We’ve established that programmatic is a way to use software to automate the purchasing of digital media. So, what does that look like in (sort of) simple terms?

When you advertise programmatically, your ads can reach your target audience in various places they go on the internet. This differs from a direct buy placement, which is an agreement for your ad to appear on a specific website. For example, if your audience is festival or event planners, you might choose to buy advertising on the IFEA website. It would be a direct agreement with IFEA in which you pay them a certain amount for your ad to run for a determined length of time or number of views. Thus, it’s labelled a “direct buy.”

Direct buys can be a great investment, especially when you have a niche audience like festival and event planners, and the website space you buy provides access to that audience. But members of that audience don’t spend all their time on the IFEA website. It’s likely a small portion, in fact. So how do you also reach them when they’re going to Amazon, ESPN, Yahoo, USA Today, Weather.com or countless other websites out there? You can’t be sure where all they’re surfing and when. That’s where programmatic comes in.

Whereas a human would require inordinate time to place advertising in all the right places, software and algorithms have been honed to do it for us – and to do it literally in milliseconds. Websites that want to sell advertising team up with exchanges that will vend the space for them, and the technology behind it goes to work. Broken down, it kind of goes like this:

User visits web page – A potential buyer, ideally a prospect in your audience, visits a website. The publisher of that website has a relationship with an ad exchange, as we noted above. So, the site asks the exchange if an ad is available.

Data passed to ad exchange – At the same time, data about the user is transmitted to the ad exchange. This data is the important information about the user’s demographic or firmographic details, as well as online behavior that helps identify if the users is a good candidate for certain kinds of ads. The ad exchange then compares this data against what marketers have input about their target audiences in what is referred to as a demand-side platform (DSP).

Matches are made – Software on the marketer’s side – their DSP – decides that the data about the user matches the profile of a prospect in its target market.

Bid is made for ad – Since the marketer’s DSP has identified the user as a good prospect, it wants to serve the user an ad. But first, it must determine if serving that ad fits within the budget parameters in place. Based on variable factors, the DSP will make a bid to the exchange for buying that ad.

Winning ad is displayed – The ad exchange will choose the highest bid for this user in this instance, and that marketer’s ad is displayed on the website.

And this all happens in less than one second.

Confused? Trying to make sense of what you just read? It can get in the weeds, for sure, so how about a simple, real-world example that hopefully makes practical sense of it all.

Let’s say you’re the marketing director of an event. You always get good turnout from the local community, but what about all the potential beyond that radius? There’s a significant audience still well within drive time of your festival. You can set up a campaign that will use programmatic buying to target certain personas in the particular areas you want to pursue. With defined personas of your target audience, your DSP will field “offers” from the ad exchanges. When a user from your targeted areas who also matches your personas visits a website, that website consults the ad exchange, which consults the DSP, and if your bid is higher than anyone else competing for that particular match, your ad shows up on the webpage for the user to see.

Or, in another example, with a tactic known as retargeting (which you’re surely familiar with as a consumer, even if you don’t know it by name), you can you can use programmatic advertising to stay in front of people who have shown interest in or researched your event. Let’s say someone visits your event’s website. They may look at ticket prices, schedules, entertainment options, but ultimately they leave the site without booking tickets. Because they visited your site, you now have the ability to stay in front of those potential attendees. You can use programmatic advertising to get ads in front of those potential customers as they surf around on the web. They’ll see ads reminding them about the event and encouraging them to buy tickets or return to your website.

Any less confused? Here’s the small building elevator pitch version: You target a certain audience, and when that particular audience is found on the internet, those people see your ad.

How Programmatic Helps You

Perhaps the best news about programmatic advertising is that you don’t have to fully understand how it works to take advantage of it. And it’s those advantages that make it a useful part of a larger paid marketing strategy.

In any business, if you told leadership there was an opportunity to decrease costs while increasing productivity, they’d grab a pen to sign the dotted line. But that’s the idea behind programmatic ad buying – to increase efficiency and decrease cost.

The automation provided by software and computer exchanges eliminates human inefficiency as well as the costs related to time a human would need to spend addressing all the ad buys.

The targeting aspect of programmatic also saves money because it helps eliminate waste. Your ads are displayed in front of the people who match your persona profiles. If you made a direct buy on Weather.com, it would cost you significantly more out of pocket, and the vast majority of people who saw your ad would not be potential buyers. But through the programmatic process, only the visitors to Weather.com who match your targeted characteristics are shown your ads, providing a completely different return on investment.

It isn’t just about money, either. There’s a famous quote around advertising that says something like, “I know half the money I spend on advertising is wasted, I just don’t know which half.” But the databased nature of programmatic advertising means you actually can find out when ad spend is being wasted. Not seeing traction from certain personas or targets? The analytic capabilities of data-driven advertising let you see that so you make necessary changes.

The word optimization is used a lot in digital marketing, because the data gives you a real-world view of what’s working and what isn’t, which means you can continuously optimize your strategies and tactics to improve them. (Which, of course, does pretty much come back around to money, doesn’t it?)

What we’ve covered thus far relates primarily to the internet. But programmatic does extend into other aspects of marketing, such as social media. There are options for programmatically buying for major social media platforms.

There are also targeting options that could be of particular interest to festival and event planners, with geotargeting one that pops to mind. In fact, it relates so well that it’s going to get its own subheading.

Geotargeting Through Programmatic

You can probably surmise a bit about geotargeting based on the term itself. Yes, it’s targeting based on geographic location. This targeting can be accomplished by a defined geographic parameter, such as a city or zip code, or can get even more granular, such as the specific location of an event or festival.

Considering that so much of events and festivals is tied to geography, the ability to use geotargeting provides an avenue for weeding out massive amounts of inefficiency and waste in marketing. On a separate angle, it also presents an opportunity to leverage it into benefits for vendors and a profit for you.

We’ve already broached geotargeting with our example above where we target specific areas of potential attendance growth, but other useful options exist. With an aspect of geotargeting known as geofencing, you can put a virtual “fence” around a certain area. It could be the area specific to your event. It could be an area within a certain radius of your event. But you can advertise to the mobile devices of only the people within this virtual fence. That means you could send offers or information to attendees. Your vendors could also target those in attendance, encouraging visits to their location, promoting their goods or extending special offers. Providing your vendors with these additional targeting/advertising opportunities means a better sponsorship package to entice them.

Furthermore, the data of those in attendance is captured, so that you can actually target them following the event. That means opportunities to advertise a future event or get feedback about the event just completed.

You can probably already start to imagine some of the possibilities with these geotargeting capabilities, and they fall under the programmatic umbrella.

How Much Does Programmatic Advertising Cost?

It’s a good question, but it’s also not an easy one to answer. It’s like asking how much it costs to buy a house. Think of all the factors that go into the price of a home. Location, size, age, condition, etc. Similarly, many factors go into the eventual cost of a programmatic marketing effort. The good news is that programmatic generally isn’t beyond the reach of even tight marketing budgets. And, programmatic is something you can start small to explore.

“Most digital marketing programs are indeed scalable,” Jon Smith, Head of Programmatic Sales at B2B marketing firm MultiView, says. “With programmatic display, like paid search and paid social, you’re able to dip your toes in the water. Based on campaign effectiveness and client experience, you can always ramp up to achieve greater market share, scale and volume.”

You can spend as much as you want, of course, but the nature of programmatic is designed to save money through efficiency. That said, it’s easy to throw money away if you approach it without knowledge of how to suitably target and organize a campaign. It might be best to lean on a professional for that, saving costs in the long run.

A Little Knowledge To Take With You

If you knew nothing about programmatic advertising prior to reading this article, you hopefully now have the understanding that it’s a method of automating the media buying process in order to deploy cost-efficient, real-time targeting of your specific audience. Perhaps that’s how Draper would have explained it to potential clients if he was operating on Madison Ave. today.

Programmatic doesn’t replace all marketing and advertising, but knowing a bit about how it works and what it can do for you provides a level of comfort when deciding whether to take advantage of its capabilities.

About the Author

As Executive Vice President of Marketing and Publishing at MultiView, a dedicated B2B marketing firm in Irving, Texas, Colby Horton is responsible for the company’s overall marketing initiatives, including brand management, content generation, social media, and email marketing initiatives. He also handles the management of MultiView’s association-branded publications. Colby can be reached at chorton@multiview.com.

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