Programmatic: The future of ad buying for B2B

Remember the iconic scene from the 2002 sci-fi movie “Minority Report,” when a camera takes a retina scan of Tom Cruise’s eye and a billboard calls out to him, “John Anderton! You could use a Guinness right about now!”?

Programmatic advertising is the precursor to this type of real-time, immersive direct targeting that will eventually happen outside of the web browser. Data is compiled in fractions of seconds and an ad is generated to the precise target, at the exact time of need, while efficiently utilizing ad dollars.

Here’s the breakdown on programmatic advertising

Programmatic advertising is an algorithmic process of buying and selling ad space in real time. For example, the social media platforms many marketers are using every day, like Google Adwords and Facebook Ads, are programmatic. These platforms are using complex mathematical formulas that evaluate a seller’s goals, inventory data, third-party consumer data, ideal ad formats, bidding preferences, and consumers’ online behavior patterns to create an efficient, cost-effective buying strategy in real-time. But programmatic platforms have emerged that take it one step further (examples include AdRoll, Quantcast and Sizmek).

The two main types of programmatic advertising are Real Time Bidding (RTB) and Programmatic Direct.

Real Time Bidding

Just like it sounds, Real Time Bidding automates the buying of ad space in real time based on information gathered about the page and the user. This information is passed to an ad exchange, where ad inventory is sold to advertisers via auction.

There are two main types of platforms used to access the ad exchange:

• SSPs (supply side platforms) that allow publishers to access the ad exchange and list their ad inventory for auction.
• DSPs (demand side platforms) that allow advertisers and agencies to access the ad exchange auction and bid for ad space.

How RTB works:

1. Publishers make their ad space available via the SSP.
2. Advertisers decide which audiences they want to target with their ads based on audience data, existing customers, or new prospecting audiences based on interest or demographics.
3. When a website user visits a webpage, information gathered via cookies is reported back to the ad exchange.
4. If the website user matches the target audience defined by the advertiser, the advertiser will then enter an auction, competing against other ads for the same audience.
5. The ad with the highest bid is then shown to that website user on the site during that visit.
6. Publishers get paid for the ads they show on their sites.

Steps 3-5 are carried out in less than a second as the webpage loads, allowing for a seamless customer experience.

Programmatic Direct

Programmatic direct is a simpler way for advertisers to buy preferred ad inventory. It is sold directly by the publisher, allowing more control than Real Time Buying channels. Programmatic direct advertising does not go through a bidding process.

There are typically two types of programmatic direct advertising:

• Programmatic guaranteed deals are made for reserved inventory at a set price.
• Unreserved fixed rate deals give direct buyers first access to blocks of inventory at a set price.

In both cases the ads are then managed programmatically and come with all the benefits of programmatic targeting. In some cases the negotiations themselves are automated between the buyers and sellers.

Super-precise targeting, powered by data

Programmatic advertising allows advertisers to reach a relevant audience with greater precision due to automated bidding based on real time data. This kind of data-driven targeting is just not possible with traditional display advertising that’s bought upfront.

A few key benefits of programmatic:

• Reduces human error in the process of media buying. Automation targets the exact audience, at the right time
• Allows you to focus on strategy instead of creating insertion orders
• Generates leads at a cheaper CPL and CPM
• Provides precise matching of ads relevant to the audience
• Detects ad fraud using machine learning techniques that help identify fraudulent click behaviors

Does programmatic only make sense for B2C and e-commerce companies?

The short answer is no. In fact, with B2B companies spending less on digital advertising than most e-commerce companies, it can be even more important to focus ad dollars where they are most impactful. This is precisely what programmatic buying does best.

For many Beacon Digital Marketing B2B clients, programmatic advertising platforms help determine the right audiences to target with specific messages at specific times. Facebook is one of the leading platforms in programmatic, allowing advertisers to target users across Facebook, Instagram and Facebook’s Audience Network based on their online and offline behavior.

To run programmatic ads through Facebook’s platform, we equip our clients with the Facebook Pixel - a piece of code placed on their website that records a variety of user behavior and data. Did a user visit their site? How long ago? How many times? Did they look at specific pages or products? What did they purchase and how much did they spend? Did they download a specific piece of content?

Facebook then takes into account all of this data to make sure the most relevant ad is served to retargeted users. Essentially, we’re able to determine which part of the marketing funnel a user is in and how to move them to the next.

So, what if your data is gathered offline, say at an event or in a brick and mortar store? Not a problem. Facebook allows you to upload offline data from stores, tradeshows or conferences, that can match back to users with Facebook profiles, retargeting them with information that’s relevant to their in-store or in-person behaviors.

In addition to analyzing your current customers, Facebook can help you find new ones. Whether you want to reach users with static or dynamic content, Facebook records the browsing and shopping behavior of its users through the Facebook pixel, allowing advertisers to target based on what Facebook deems a user might be interested in, even if they have never been to your site.

Take one of our largest clients, a virtual chat event platform for large companies or universities looking to host online networking events to recruit bright and talented employees and students. In addition to offering demo requests of their product, the company provides blog posts about industry topics and more in depth content in the form of case-studies, ebooks and whitepapers.

By casting a wide net to users that Facebook deems may be interested in their top of funnel blog content, the company is able to drive new potential customers to their site and capture their information through the Facebook pixel. Then, they can re-target users interested in the blog with content downloads like an e-book related to the blog post they just read or a relevant case study.

If a user downloads the ebook, we know they’re familiar enough with the company's name to then serve them product focused ads. We’ve now moved them down the funnel from high level awareness to consideration.

Once the user is in the consideration phase, they’re served ads about the product through short video clips and Facebook Carousel ads with a CTA to visit the client's site to Learn More. From here, we retarget with Facebook’s Lead Gen Ads, a product introduced to streamline the process of lead generation.

Ever click on an ad in your newsfeed to sign-up for something only to be taken to another site with a bad UI or long form to fill out? Facebook Lead Gen ads transform this experience into a seamless one. When a user clicks “Sign Up” or “Learn More”, they don’t leave the Facebook interface, but instead are prompted to fill out a form directly within their newsfeed. The form is pre-populated with any information they’ve already provided to Facebook such as name, email address, age and location. The best part? Submissions within the form can be directly integrated into the client's CRM system such as Salesforce or Hubspot.

The above example is just one way that programmatic can be just as useful in driving users down a funnel for B2B lead generation as it can be for driving sales of a product on a B2C e-commerce site.

What to watch out for with programmatic

Though programmatic advertising provides a great deal of value to both B2B & B2C advertisers, it can pose as a challenge for brand management because buying is based on the user rather than the content of the site. To help solve this issue, you can use a site blacklist to specify sites you do not want your ads to appear on. These types of lists are managed through the demand side platform.

Be aware that websites often change domains, so it is best to constantly update your blacklist. On some platforms, you can exclude entire categories of content, in addition to specific sites. Or you can take the opposite approach and create a whitelist of acceptable sites where your ads can be shown. Keep in mind that this will limit your reach and will likely make your buy more expensive.

Also note low quality sites provide cheaper traffic, and often agencies will not use a blacklist or keep it updated because it can drive up the cost of buying, therefore making it hard to reach your delivery KPIs. (It's something you should ask your agency to do!)

Other issues with programmatic advertising to consider:

• Programmatic relies on cookies to track users across devices, which can be challenging. Facebook requires user logins, not relying on cookies, therefore less challenges across devices.
• Publishers can mask their URL, which allows them to list their website as a more reputable website, instead of their own. This can mean that the buyer has no idea where the ads are actually running.

The future

Programmatic advertising is predicted to grow faster than all other digital mediums in 2017. We will likely see it take over TV and radio ads. The real futuristic impact of programmatic advertising lies in the AR and VR spaces where it will allow limitless opportunities to sync brands directly into a unique virtual environment.

Imagine putting on your VR headset, immersed in a new car racing game. As you select your car, you scan the cockpit, reviewing the realistic instruments and gauges. Imagine looking down at your watch and seeing a watch on your wrist that is targeted to you by your income bracket. As technology progresses, brand integration will be seamless and highly targeted. Currently only a few options for VR ad placements exist. This will change as the medium develops its ad-technology infrastructure.

It seems that it’s really only a matter of time before the possibility of “Minority Report” advertising becomes a reality. And, no doubt after digesting all of this information and the implications of programmatic advertising, “{First Name}, you could use a Guinness right about now!”