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Mike Kisseberth

What Advertisers Really Think of Programmatic

Mike Kisseberth Sales and Marketing - 08/28/2014-10:42 AM

Digital advertising spend will hit nearly $140 billion this year. And as is typically the case with any industry growing rapidly, new innovations drive growth. In digital advertising, the rise of programmatic, in particular, has become a key innovation that continues to shape today's digital advertising-scape.

According to a recent study conducted by my company, Purch, where we surveyed high-level U.S. marketer and agency advertising decision makers spending $1 million or more on digital advertising, 78 percent confirmed their use of programmatic across campaigns. Yet, while programmatic has been widely embraced, views on its uses and benefits displayed by agencies, advertisers, and publishers are not necessarily at a consensus.

Programmatic Measurement

The importance of good metrics cannot be underscored enough when it comes understanding the effectiveness of a strategy and which of its underlying components do and do not work. But to what end do advertisers employ programmatic campaigns and how is their success measured?

According to our study, a vast majority of respondents (75 percent) say they measure their programmatic campaigns based on sales/conversion rates. This is sensible given the constant push for ROI. However, programmatic advertisers also included brand lift (51 percent) and reach (23 percent) among their top evaluation metrics, as well. Meaning that programmatic is being used and can be deployed to fulfill various advertising needs effectively.

Choosing the Right Partner

When it comes to choosing a programmatic provider, advertisers are also split. While a majority of those surveyed have used agency trading desks (65 percent) and demand side platforms (61 percent) to purchase programmatic, the preferred programmatic providers are publishers (36 percent). They're followed by trading desks (23 percent), and DSPs (21 percent). This is obviously beneficial as advertisers can deal directly with suppliers, cutting out both the middle man as well as the uncertainty that comes with not knowing exactly where the ads you have purchased will actually be displayed.

The important criteria for choosing a premium programmatic (preferred or private auction deals negotiated with a publisher) partner is also viewed quite differently, with respondents citing audience insight and data (91 percent), ease of use (90 percent), credible metrics (87 percent), and transparency (87 percent) as some of the most important factors.

Agencies and Marketers Weigh-in on Premium Programmatic

Our research also revealed that while agencies and marketers are both engaging more and more in premium programmatic sector, they are doing so for different reasons and benefits. For example, while agencies are more drawn to premium programmatic by the increased efficiencies involved with purchasing premium inventory (46 percent) and the removal of the "middle man" from the process (34 percent), marketers, on the other hand, cited less audience targeting waste (45 percent), and the reduction of advertising costs (38 percent) as the most attractive benefits of premium programmatic. However, although agencies and marketers did offer contrasting views on the most attractive outcomes of premium programmatic, a similar percentage of agency members and marketers surveyed cited more accurate audience targeting (28 percent versus 26 percent) as one of the most attractive premium programmatic benefits for them.

Premium Programmatic's Biggest Obstacles

While growth has been astronomical, and the promise of premium programmatic is quite high, advertisers, agencies, and marketers alike are also cognizant of several challenges that still exist within the space. A lack of premium inventory (54 percent) and inadequate targeting to preferred editorial brands and audiences (37 percent) are among the biggest bumps in the road for premium programmatic. Our research also showed that a at least a quarter of advertisers are mindful and weary of a lack of human interaction (30 percent) and transparency (25 percent) that exists, meaning there is certainly room for growth (advertising fraud has become a huge buzz phrase, lately, exacerbating the transparency and lack of human interaction issues).

In the end, programmatic is exploding in adoption and spend. However, we have yet to reach maturity or complete consensus on optimal use cases and benefits. That will come with time, as the market continues to sign on. In the meantime, though, we have a good sense of the possible direction and can execute accordingly.

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Mike Kisseberth

Webrooming is Changing What Commerce Means for Publishers

Mike Kisseberth - 08/07/2014-08:10 AM

In digital publishing, commerce is usually seen as e-commerce—i.e., buying on-site. And with the global e-commerce market set to hit a record-breaking $1.5 trillion this year, the definition isn't much of a surprise. Everyone wants a piece of that pie.

But e-commerce can be a difficult nut to crack, even for top publishers. Click-to-buy integrations aren't successful overnight. They need category expertise, technology and more to support them. Operationally, e-commerce is capital intensive, with high barriers to entry.

But commerce is more than click-to-buy, and the opportunities extend beyond a website.

Enter Webrooming

Webrooming, or researching products online before buying in-store, isn't new. Yet, thanks to mobile and the rise of connected devices, it's growing like never before.

Sixty-nine percent with a smartphone between the ages of 18-36 have webroomed. Eighty-eight percent, in general, say they've at least tried it. As a result, webrooming is set to account for nearly $1.8 trillion in retail sales by 2017. The opportunity is huge.

And while brands are taking advantage by delivering new content to help consumers webroom online, third-party expert sites are really the main driver behind webrooming's adoption. This is because shoppers are more inclined to trust the buying recommendations of neutral publishers as opposed to the admittedly biased brands themselves. And, thanks to easy-to-use publishing platforms, expert sites are booming, making it simple for consumers to find relevant information from a credible source.

How Webrooming is Changing Commerce

Webrooming is bridging the longstanding gap between online and offline buying, without the click-to-buy integrations. It's making online content a commerce driver for in-store transactions. Digital content is essentially marketing collateral to compel a sale.

What's changed today is that the consumer is now "always on." They're connected to the Web via tablet, smartphone, smartwatch—you name it. This makes webrooming more convenient and appealing, broadening its usability. (It should be noted that formatting content for these different devices is something else publishers will have to get really good at—sometimes that may mean adding or subtracting content depending on the user's screen).

And this is how publishers need to see commerce moving forward. Their content is a commerce enabler that's encouraging audiences to buy. By understanding content's value in a webrooming culture, publishers can dream up new ways to more creatively and effectively monetize their strongest asset.

At our company, for example, we've invested significantly in our product reviews content over the last year, most recently adding Paul Reynolds, the first-ever Electronics Editor of Consumer Reports. Paul is broadening our reviews coverage and making it even easier for shoppers to webroom through our properties. But we're not the only ones. Everyone from Digital Trends to The Wall Street Journal are investing in product reviews because the opportunity is clear.

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Of course, webrooming isn't perfect. Questions remain regarding performance. Publishers can't entirely quantify how many times a piece of content drove a sale.

However, though tracking the impact from online content consumption to offline sales can be nearly impossible because of attribution challenges, marketers are increasingly working with publishers to establish a performance proxy—a measurement of online activity that correlates closely to offline sales. Figuring out what those proxies are for product categories that audience shows the most interest in will enable the publisher to drive to that more measurable behavior.

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Mike Kisseberth

Why All-Programmatic Doesn’t Work for Everyone

Mike Kisseberth Sales and Marketing - 02/18/2014-09:03 AM

 

Programmatic is still very sexy.

After coming to the fore in 2013, it remains a key—if not the key—buzzword of 2014 (and, yes, we’re only two months in). But beyond buzz, programmatic is a legitimate force in advertising.

Not only will it account for just under 30 percent of all display ad spend by 2017, already, 85 percent of advertisers are using it, in some form. We also can’t ignore the very real benefits with respect to streamlined workflow, cost efficiencies, and transparency between partners. So, it’s not a matter of who will ultimately use programmatic, but how quickly everyone will use it. 

And we’re seeing this play out in the market. Just recently, Federated Media and Demand Media both made headlines, deciding to completely forego their direct sales efforts to focus solely on the still young, but increasingly successful, programmatic and RTB category.

The news fit neatly into the ongoing, polarizing direct versus programmatic debate, while heightening that schism and making the sexy, all-programmatic approach appear to be better suited for the long-term. But, while this was a very compelling narrative, it just isn’t true.

At least not for everyone. And that’s what some of us are forgetting.

All-programmatic as a strategy works particularly well for a certain type of publisher—specifically, those with long-tail networks that don’t sell highly-customized or native campaigns.

For more premium buys, whether in display or native, direct sales is still very much needed to provide buyers contextual grounding and more strategic insight. It’s also critical for campaign optimization. It's worth noting, too, that a premium programmatic relationship requires direct engagement between the customer—usually a trading desk—and an informed sales person.

While the all-programmatic approach works for some players, those with a fuller and more complex mix of inventory still need to rely on a direct sales team to get the job done right.

The technological infrastructure simply isn’t there to leverage programmatic for high-engagement custom or native programs, so it will be some time, if ever, until we see publishers that offer this deeper mix of inventory going all-programmatic.

At the same time, the all-programmatic approach will continue to grow. We will see more long-tail players adopt this strategy over time, with it becoming the norm for some publishers. It’s just a cost-effective business model for them, given the inventory offered.

From my own experience, for premium publishers, the best strategy is a happy medium, employing a combination of direct and programmatic to best serve clients and partners. This dual approach is the most effective, allowing them to have the best of both worlds, as the two models are working together, plugging gaps, providing insights on how to best optimize campaigns, and delivering overall better outcomes for advertisers and publishers.

 

 

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Mike Kisseberth

Native Advertising and Programmatic Buying: Predictions for 2014

Mike Kisseberth Sales and Marketing - 01/10/2014-09:31 AM

 

Native advertising and programmatic buying were all the rage in 2013—and for good reason.

According to eMarketer, native ad spending will exceed $3 billion in just three years. Publishers are trying to take advantage, of course, with nearly 75 percent now offering online native ads across their sites. Any why not? BuzzFeed, the poster child for native, is both profitable and growing at a time when many media companies, new and old alike, are finding it increasingly difficult to do either of those things.

Still, native advertising only shared annual buzzword honors with programmatic buying. Programmatic is expected to account for nearly 30 percent of all display ad spending by 2017—or over $9 billion. That’s because 85 percent of advertisers use it, with 91 percent expected to do so in the next two years. And like native, publishers are going where the money is. 72 percent now have programmatic offerings in place.

Long-term growth for both native and programmatic is clear. But the two categories are still very young. Over the next year, how might the way in which we use them change? Here are a few predictions.

Native Advertising


1. Standardization Is Coming

With the recent release of the IAB's Native Ad Playbook, we’ll see continued standardization of native ads and native ad serving. Remember—while native spending will likely hit $3 billion in just a few years, the concept is, again, relatively new. Implementing structure and a consistent framework will only help both buyers and sellers maximize opportunities and take full advantage of the trend.

2. “Answering” the Scale Question

The next big hurdle in native advertising will be to close the programmatic-native gap. The pressure is on figuring out how to automate native, similar to RTB and programmatic, so that publishers can create custom content quickly and with little overhead, to drive actual scale.

3. Expect Greater Regulation

Disclosure and transparency in native advertising will continue to be top-of-mind for the industry. Expect stronger guidelines and standards to be considered by the FTC in the New Year, with the industry encouraging self-regulation, as seen with the IAB’s Native Ad Playbook.

4. Native will Be More Data-driven

Successful native campaigns will be heavily reliant on the data and insights gleaned from programmatic initiatives. This means that understanding how creative functions and drives programmatic performance will become increasingly useful in planning native campaigns.

Programmatic Buying


1. Buyers will Grow into Tech Experts

As automation and programmatic continue to take center stage, media buyers will become increasingly technology-proficient to interpret data and provide strategic insight to clients.

2. Premium Programmatic will Be Key

The industry is still confused about what programmatic, and especially premium programmatic, really means. As more and more publishers adopt programmatic strategies in 2014, the emphasis will shift from understanding the medium to progressing it. This means more emphasis on “premium programmatic,” mobile, video, etc.

3. Marrying Programmatic and Native

2014 will be the year we see native and programmatic begin to court one another. In 2013, we created a false dichotomy between the two formats, with native on one side, programmatic on the other. Rather than separate the two, we need to understand how they can work together, plugging each other’s gaps—scale and quality, for example—to improve message delivery.

4. Direct Sales will Go Programmatic

With more dollars moving towards programmatic buying channels, I expect greater pressure on the direct sales teams in the New Year. As a result, one of the things we will see is direct sales teams working hard to acquire the skills and relationships needed to drive premium programmatic deals.

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The future is obviously very bright for both native and programmatic. In 2013, they solidified themselves as key growth areas for the long-term. In 2014, however, we can expect evolutions in each category, with more synergy between the two to better deliver for advertisers, marketers, brands and publishers.

 

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