By Or Shani on August 22, 2014 | http://marketingland.com/get-programmatic-primer-programmatic-advertising-94502
Chances are you’ve heard the buzz surrounding programmatic advertising and how it is projected to account for 50% of digital ad sales by 2018. Maybe you’ve even tried it for a recent campaign because you read that it is the future of advertising.
While some marketers are quickly jumping on the programmatic advertising bandwagon, many more don’t know the first thing about it or what the benefits are.
In a nutshell, programmatic advertising automates the decision-making process of where ads are placed, using artificial intelligence (AI) and real-time bidding (RTB) for online display, mobile and video campaigns — and it’s making inroads into TV and social media, too.
But programmatic is much more than that; it’s a method to resolve the highly fragmented industry that advertising has become, to maximize the return on investment (ROI) in ad budgets.
By using a blend of machine-learning technologies and good ol’ fashioned marketer’s intuition, programmatic advertising can hit the right audience at the right time to drive higher-quality leads for brands.
Out With The Old, In With The New
Say you want to target women in their 50s with no children who live in Scarsdale, NY. Or men in the Rocky Mountain states between the ages of 18 and 35 who enjoy mountain biking.
With billions of possible targeting combinations to choose from (there are more than 41,000 ZIP codes in the U.S. alone), advertising has become a much more niche endeavor. It’s also beyond the scope of any human being to identify the right combination that will drive the highest quality leads.
This is why manual campaign optimization strategies blow much of the ad budget up front on trial-and-error schemes to determine what’s working and what’s not. It casts a wide net and works its way backward from there.
Programmatic campaigns, on the other hand, do the heavy lifting for you. Once you plug in the information about your campaign goals and key performance indicators (KPIs), the campaign immediately gets to work. It starts off small using predictive analysis, and evolves from there based on what’s working. This not only gets brands to their KPIs faster, but results in fewer wasted dollars.
The Beginning Of The End For Ad Fraud
Ad fraud is one of the primary reasons why some marketers are hesitant to try out programmatic campaigns. But fraud started causing marketers headaches long before programmatic advertising came around. Some estimates cite more than one-third of ad traffic as fraudulent, and not many industries would stand for a 66 percent success rate.
The good news is that machine-learning technologies can actually identify fraudulent patterns and avoid them. Marketers that have a better understanding of what leads are converting into sales can teach the machine where low-quality leads are coming from and make adjustments on where the focus should be.
Going through this process manually would not only be time-consuming, but also cost prohibitive. And those engaging in fraudulent activities are constantly finding new ways to make money, but keeping the focus on lead quality will quickly filter out these schemes.
It’s Okay To Give Up Control To Focus On Other Campaign Aspects
For some marketers, giving up control of campaign optimization can induce panic attacks. But once the campaign starts hitting those KPIs, the anxiety will dissipate.
Like a self-driving car, programmatic advertising is your chauffeur to get you to where you want to go, and it can react more quickly to changing market dynamics than manual optimization by pulling in and analyzing data in real time to continually self-improve.
Programmatic is working non-stop around-the-clock to measure performance and make adjustments to campaign performance. Better still, taking a hands-off approach to campaign optimization frees the marketer up to focus on other campaign aspects, such as the creative, overall strategy and promotion, timing and pricing.
AI’s Impact On Advertising
So, how can programmatic advertising do all this? Through artificial intelligence (AI) technologies that have highly developed algorithms that give them the ability to analyze data and “think” in real time.
Marketers are practically swimming in the volume of big data available to them, and AI excels in putting that data to good use to drive campaigns. Machine-learning technologies aren’t meant to replace marketers, but to complement their strengths while making up for their human-constrained weaknesses. When implemented correctly, AI and marketers can co-exist harmoniously.
Big data has opened up thousands of new doors for marketers and elevated the potential for advertising’s capabilities.
Brands looking to get a stronger ROI for their advertising dollars would be wise to look into programmatic strategies that leverage machine-learning technologies and AI to resolve the billions of potential targeting combinations to reach the customers most likely to convert to sales. The result is a highly optimized advertising campaign that never stops working toward constant self-improvement.