Big Data Meets Programmatic Buying

The pace of automation, interconnections and change in digital media buying is staggering. And while there’s still considerable blabbing, handwringing, stalling and excuse making about programmatic buying, reality is way ahead of the rhetoric even if media firms and their clients aren’t leading the charge. The days of armies of young media planners and buyers wielding spreadsheets are being replaced by a business rules that instruct computers to buy and optimize in real time.

Think about it. Americans are spending much more time online than on TV, yet most of the ad dollars flow to TV. Similarly people are using mobile media extensively yet there’s just a trickle of brands experimenting with mobile advertising. The likely reason is the continuing need for efficient reach, measured in gross tonnage of eyeballs, mixed with 6 ounces of conventional wisdom and 2 tablespoons of inertia.

As social and mobile media ascend to dominance, advertisers will be looking for transparency (who saw their ads) and performance (who clicked, signed up or bought) according toSephi Shapira, CEO of Massive Impact. These rough equivalents of general and direct marketing will become increasingly important as smartphones and tablets merge intoPhablets, which in Q2 2013 have 25MM units in market.

Ultimately everything on the phone/phablet will talk to each other and be available to marketers to enable ad serving. Consumers will be targeted by device, by apps installed, by the games they play, by names in their phone book, by browser or even by the pictures they take. And while this has a 1984 feel to it, the concentration and mining of data will make messages more relevant to each individual.

To accommodate these needs real-time bidding (RTB) is accelerating and becoming more sophisticated. In terms of inventory control and access, auction style bidding puts each unit and each potential customer up for bid. Prices are determined moment by moment in relentless auctions managed by demand side platforms (DSPs).

In terms of targeting or retargeting, by using contextual datarather than demographics as the principal targeting criteria, brands can track what consumers do and where they go in order to direct the messages served to them.  Ads can be directed by device, by location, and by collaborative filters that, like Amazon, infer what people want based on what they’ve done or what their friends do.

“For a generation that live their lives entirely online, there’s no such thing as TMI,” in Sephi’s opinion. “And while this may feel creepy to some, younger consumers appreciate the behind-the-scenes filtering that delivers information and offers about things they actually like and care about.”

Facebook, on the strength of FBX units, has gone from zero to sixty in record time transforming both the timeline and the right column ads into direct response and pay for performance vehicles. With the number of Facebook users accessing the platform on mobile devices now approaching 50%, real time mobile ads are likely to play an increasing role for brands.

Ninety percent of the automated inventory is now being sold on a cost per action basis. Publishers display messages as often as necessary to drive a guaranteed number of actions. Brands pay only for performance; less for a click and more for a sale.  But with guaranteed performance and predictable costs, there’s very little risk. Automated performance based ads, which can course correct on their own like heat-seeking missiles, are transforming eCRM which enables repeat sales, upsells and cross selling.

Data swapping is a refinement on its way to the US, says Shapira. In Europe and Asia it’s not uncommon for a telco to share data with an insurance company in order to mutually enhance databases and improve segmentation, targeting and conversion.

Sephi’s message to brands is “Don’t miss the revolution. Social and mobile platforms, games, apps and real time bidding are emerging tools that savvy marketers are embracing and mastering to gain first-mover competitive advantages.  If you are buying banners and hoping for the best, you’re not really in the game.”