22-09-2017 | Redacción CEU
You only have to turn on your computer and surf on the web a few minutes to experience the programmatic advertising effect. Why do advertisements seem to speak directly to you? Firms no longer buy spaces, but specific audiences. Many announcers find in this digital marketing tool the magic formula to reach the target that they want to connect with. But, do they really succeed? Is this an effective strategy?Are algorithms effective in the decision-making? Is this type of advertisement profitable for brands?
Alejandro is a Political Science student who lives with his older sister, Carlota, in a flat in the center of Madrid. Most of the time, they argue like most siblings, but, deep inside, they get along well. Carlota has a good job in a law firm and she usually deals with the flat rent payment. The last fraternal dispute consisted of a reprimand of the eldest daughter about Alejandro's lack of decorum in his finance and yes, she finally took care of the total rental payment of the apartment. The older sister has given him an ultimatum, if he does not begin to administer himself well, she will send him back to their parent's home. This is the story about how programmatic advertising could disturb your life.
Have you ever felt persecuted by a brand? Alejandro has felt so. When Carlota asks him about the price that he has paid for his new running shoes, he lies. But days after, she sits down in front of their shared computer and discovers the trick. Signs in capital letters, pop-ups with prices and even a new footwear video accompanies the minutes of tense navigating. You do not learn, Alejandro! She had forgotten about the shoes, but they were advertised there, on the webpages that she was visiting. This time, the programmatic advertising not only had not been effective, no one wants to buy again some sneakers that already has, but it had an undesirable effect. Now, Alejandro has installed an adblocker program in the computer, periodically deletes the record, knows how to deactivate the cookies and lives with his parents.
Although extreme, this story is not so far away from the reality that Internet users daily experience. If you book a flight to Barcelona through a website, probably the webpages and platforms that you visit will show you offers like these ones: Are you looking for a hotel in Barcelona?, Best discounts on Madrid-Barcelona flights!, or Renting a car has never been so cheap! In a thousandth of a second, an invisible commercial operation has been carried out, a company has bought an advertising space for a specific audience where you are part of.
Programmatic advertising makes possible for advertisers to have ad spaces adapted to a specific audience for sending the convenient message, at the right time. The media launches the offer and the Ad Exchange makes the numbers –the space where the final purchase is made taking into account factors like advertiser bids or the affinity between user and advertisement–. Combining a customized advertising strategy by segments with data about demography, location or behavior of users offers endless advantages to companies that invest in this type of advertising.
Those times when the advertiser called some media to buy advertising spaces have passed into the annals of history. The programmatic purchase is done in an automated way and does not require any human intervention. This type of publicity had its origin in the unsold inventories of the digital media. For getting these spaces on sale, it was indispensable to automate the process. Now, the game rules have changed and are offered from least favorable to most quoted spaces in a global ad market known as Open Exchange.
The Big Data irruption in our lives has propelled the push of this digital marketing methodology. Brands want to get to know us better to connect with us and get right with the message that captivates us. Our data become the most precious asset. The technology used by the DMP –Data Management Platform– allows the search of these concrete audiences. How do these platforms work?
DMPs are the platforms where someone can manage cookie lists and get to know how the media users are. Thanks to them, publicists can generate and segment audiences. Each time that a user visits a particular webpage –for example, one about specialized sports shoe sale– he/she will become part of a specific audience –in this case, the people are interested in running–. Later, they can use this data to carry out campaigns or in the data sale to other agents who need that type of specific public –third party data–. These platforms also enable the data crossing with third parties, which enriches even more the programmatic ad world.
The ad campaigns are aimed at a target that shows an initial interest and they are not so invasive. If the audience is identified well, the campaign will be more effective than one that has a general character.
Inventories on sale are innumerable. The advertiser options multiply compared to the traditional management of advertising space purchase.
With the old formulas, they paid for a particular publication time. In the programmatic purchase process, advertisers pay for a specific number of impressions.
The audience segmentation makes the message customization easier. In addition, the advertisers themselves can design different ads for the different audiences. The effectiveness will be greater.
Among them, there is the geolocation. For example, advertisers can pay for an advertising space in the media visited by users located 200 meters from their business. Publicists now have the challenge of exhausting these new opportunities.
In the programmatic buying process, there are many intermediaries and each part in the process collects a percentage. With this profit distribution way, they lose information, there is less transparency and the visibility descends.
It is a type of fraud that specializes, mainly, in programmatic advertising where you sell a space that promises to be premium, but it actually does not exist. Their executors benefit from the fact that the advertisers do not have precise control over the final location of their ads, the algorithms make the decisions.
Although marketers are increasingly betting on it, their purchase still entails a high level of investment.
Overexposure has desensitized a large percentage of users to the network advertising. In addition, many of them have taken action against this publicist attack and they install programs like ad blockers.
Advertisers have no real power over where and how their ads appear. On the other hand, these ads do not have to bring value to the media. On some occasions, this type of advertising can be negative for advertisers or media, and even for both.
The programmatic purchase has reached the half of display advertising operations in Europe. This growing market opens a wide range of possibilities, but also brings challenges. Audiences are on sale! Who gives more?