Q&A: Chris O’Hara on the current state of ‘programmatic branding’

Econsultancy has this week published a new report in partnership with Quantcast which shows that companies are increasingly setting aside marketing budget for branding campaigns using programmatic advertising.

Here, the report author Chris O’Hara gives his thoughts on this topic and a flavor of what is covered in the study.

You recently completed your report on programmatic branding. Can you tell us what that is?

In ad technology, we have spent 20 years building up the ‘pipes’ to create real-time ad delivery and measurement, but it has mostly been used to drive ecommerce. Yet, big consumer brands such as Kraft and Kellogg’s have started to figure out that you can use the technology to drive upper-funnel consumer engagement. The paper is an attempt to understand how real this trend is, and where it will go in the short term.

Where will it go? Are all brands going to start doing equity advertising online?

Well, they should if they have the tools to do it. First of all, consumers have been shifting their attention away from ‘reach’ channels like print, radio, and TV for a long time. Marketers need to follow them to their mobile phones, desktops, and tablets, but doing so at scale has been costly and complex. Early adopters are companies that have created measurement frameworks to understand the impact of their equity advertising across all channels – a difficult but necessary competency for undertaking programmatic branding.

Can brands get enough reach programmatically?

Of course they can, but I think you have to distinguish between ‘reach’ and ‘quality reach’. People see enough banner ads every day, so inventory and eyeballs are not the problem. Television doesn’t just work because it can scale massively (e.g. Superbowl ads). It also works because video is an amazing medium for storytelling, which is what equity advertising is all about. Just because you can reach 75% of the population or more with digital, doesn’t mean you can succeed at programmatic branding. Stitching the right messages together in their various formats is a big challenge – especially with the dearth of quality video ad inventory.

How do you know it works?

Again, this is a problem that requires an entirely new framework to address. If you want to measure the sales lift from a branding exercise, we know it is possible to match online audiences exposed to advertising and offline purchase behavior. This is why Datalogix sold to Oracle at a reportedly healthy valuation. The harder challenge is mapping an individual user across her devices, or ‘cross device identity management’ (CDIM). That capability makes measurement more granular, enables sequential messaging, and ultimately unlocks user identity. Without that capability, available through data management, attribution remains a guessing game.

What do you see as the benefits of running programmatic brand advertising campaigns?

What innings is it for programmatic branding?

The consensus of our panel was that it’s early innings – maybe first or second. Early adopters are starting to see the advantage of shifting expensive television budgets to digital. After all, television viewership is more fragmented than ever, and it’s challenging to put together an affordable reach package in traditional media. Online advertising, secured through ad exchanges, is undervalued and provides great reach.  It will be hard for big ad spenders to avoid the kind of ‘reach hacking’ you can apply in biddable online media. The game is going to be played at a very fast pace, and early adopters will continue to receive competitive advantage from developing programmatic competencies first.

Any final thoughts?

If branding is largely creating good feelings and associations with a product or company, then I think digital is in a great place. People want individualized experiences online. They like it when they are recognized as an existing customer, they like discounts based on membership with a brand, and they like messaging that’s relevant. They dislike being re-targeted with ads for something they have already bought, and they don’t like too see ads for completely irrelevant products. Putting the right targeting and measurement (hallmarks of direct response) together with great stories and creative (the hallmarks of branding) is the proverbial peanut butter and chocolate. The companies that can use programmatic ad technology to create impactful equity campaigns will win big in 2015 and beyond.

Published 27 May, 2015 by Linus Gregoriadis @ Econsultancy

Linus Gregoriadis is Research Director at Econsultancy. Follow him on Twitter or connect via LinkedIn or Google+.

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Remarks at ICOM 2015 in San Sebastien

I-COM Global Summit: Panel Discussion on Leveraging Big Data to take Programmatic to the Next Level – Chris O’Hara, Krux Digital, Eric Picard, Mediamath & Tom Simpson, MediaQuark

Leveraging big dataChris O’Hara, VP Strategic Accounts, Krux Digital, USA, Eric Picard, VP Strategic Partnerships, Mediamath, UK and Tom Simpson, CEO, MediaQuark, Singapore were speakers and David Smith, CEO & Founder, Mediasmith, USA was moderator in Leveraging Big Data to take Programmatic to the Next Level. This discussion had no presentation.

Remarks at INMA World Congress

Riveted

Programmatic advertising, once a threat, is now considered an opportunity

11 May 2015 · By Western iMedia

The varied facets of programmatic advertising have become more mainstream in the media industry. Those heavily involved at their media companies see a promising future for this once niche revenue opportunity.

“Efficiency is the name of the game,” said Matt Prohaska, CEO and principal of Prohaska Consulting, speaking about programmatic buying at the World Congress in New York City on Monday. Prohaska turned the discussion over to a panel of experts that explored the future of programmatic.

There are two major aspects of programmatic advertising, said Jeremy Crandall, senior vice president of operations and client services at Adroit Digital. Automated programmatic, which includes real-time bidding (RTB), is the side heard more often.

“To me, programmatic is like a BLT sandwich,” she said. “RTB is the bacon.”

The other aspect is data-driven programmatic, in which buyers leverage data to make informed decisions about which ad impressions to buy.

Crandall explained the different modes of programmatic buying and selling. Open RTB leverages ads not sold by a direct salesperson. These ads are are remnant impressions and the transactions take less than 100 milliseconds.

“It really is a many-to-many marketplace,” she said.

Crandall described private marketplace (PMP) transactions as a walled garden, in which select buyers are invited to participate and usually involves price floors. PMP is not as impersonal as RTB, Crandall said. Sharing data makes a significant difference in efficacy of the buy.

“It is really those relationships that still matter a lot,” she said.

Chris O’Hara, vice president of strategic accounts at Krux Digital, gave insight from the data management platform (DMP) side of the programmatic equation.

O’Hara outlined the evolution of publisher ad sales as moving from publisher direct, to ad network 1.0, to the introduction of the DSP era. We are currently in the DMP area, one of “programmatic direct,” O’Hara said.

We are moving toward an era of total automation across channels. Efficient automation, where publishers retain more revenue and advertisers get increased reach for budget, is part of that future.

“This is the wave of the future; it’s happening and it’s super exciting,” O’Hara said.

Jon Usry, director of digital platforms at Dallas Morning News Media, shared his company’s strategic approach to the current and future states of programmatic.

When programmatic first entered the market, the reaction from publishers was one of fear, as buyers were perceived to have the advantage and the quality of these ads seemed low.

This is not the case now, Ursy said. Programmatic is seen as an opportunity rather than a threat.

“Certainly, a lot of things have changed significantly,” he said.

Dallas Morning News made the strategic decision to build or purchase digital marketing solutions as programmatic grew in influence.

The current state of programmatic is a level playing field, Ursy said. The company hold regular meetings about how to leverage programmatic. They explore all options, he said: “There might be certain situations where we want programmatic to be competing with direct sells.”

Developing a strong plan for programmatic is important to the company. Programmatic media spend is set to double in the U.S. alone, Ursy said.

Usry shared where The Dallas Morning News is focusing as they develop their future programmatic strategy:

  1. Establishing programmatic as a core competency.
  2. Selecting the right technology partners.
  3. Embracing a culture of testing and learn.
  4. Hiring the right talent.

As data continues to grow and marketers get better tools, Usry says programmatic has a positive future: “For the future of programmatic, I think it looks promising for all parties.”

Read more: http://www.inma.org/blogs/world-congress/post.cfm/programmatic-advertising-once-a-threat-is-now-considered-an-opportunity#ixzz3bGw6O7yI
Read more: http://www.inma.org/blogs/world-congress/post.cfm/programmatic-advertising-once-a-threat-is-now-considered-an-opportunity#ixzz3bGvnIBgK

The Five (New) Things to Expect from a DMP

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In early 2012, when data management technology was somewhat nascent, I wrote about “the five things to expect from a DMP.” They were: To unlock the power of one’s first party data; decrease reliance upon third party data; generate unique audience insights; use data to audience power new channels; and create efficiency. A little over three years later, those things still continue to drive interest in DMP technology—and great value for both publishers and marketers.

The “table-stakes” functionality of DMPs—segmentation, lookalike modeling, targeting, and analytics—continue to resonate. Even the least advanced DMPs have those abilities, and this is what people who buy DMP software should expect from any system. Unfortunately, there are now dozens of “platforms” that claim DMP technology. Some are legitimate players, born from the ground up to be “first-party” DMPs. Some have been created as “lightweight” DMPs to collect and distribute cookies for display advertising. And still others are legacy tag management or network platforms that have bolted on DMP functionality as they work towards a fuller “stack” solution that marketers say they want.

Writing this article again, three years later, I would still encourage software buyers to evaluate their DMP choice on the ability of their partner to meet the above-listed criteria. But, there has been so much nuance and development over the last several years. Therefore, additional selection criteria present themselves if one is expected to make a reasonably informed choice in DMP selection going forward.

Here’s what the modern DMP consumer should be looking out for:

  • Lookback: Three years ago I talked about “lookback windows” in the context of giving publishers the ability to attribute future conversion events to ads shown previously on their site. That is still a compelling publisher user case. What “lookback windows” really refer to is whether or not your DMP can capture 100% of the raw, log-level user event data—and store it. This necessitates an open taxonomy (because “you don’t know what you don’t know,”) and also the ability to store tons of data and make it accessible quickly. This is considered to be complete data architecture. Many DMPs operate with a rigid, defined taxonomy and only collect segment IDs—not the underlying data. That’s a problem for businesses that need to move fast and activate new segments opportunistically. Ask how—and for how long—your DMP stores data.
  • Onboarding: Lots of DMPs claim to have the ability to easily ingest CRM and other offline data and match it to cookies, but the truth is everyone depends on a limited set of “onboarding” vendors to provide the matches. That’s fine, but there are some nuances and subtleties involved in the process by which offline data enters the online identity space (hashing). DMPs should enable seamless connection to all three major onboarding providers, the ability to select the methodology by which offline identity is matched to online, and also be able to automatically choose which onboarding partner is right for each identity. Ask how each DMP you evaluate works with each vendor, what kind of match rates you can expect, and how each stores persistent user identity to insure better matches over time.
  • Measurement: Let’s face it, the ability to tweak programmatic audience delivery to online video viewability numbers up a few percentage points is great, but nothing moves the needle like linear television. Marketers spend a ton of money there, and will continue to do so for the foreseeable future—all the while moving incremental percentages of their budget into the digital channels where folks are spending an increasing amount of time. But, they are never really going to go full throttle with digital until they can reconcile reach and frequency across channels—and those channels must include linear! Your DMP should be able to handle overlap reporting, light attribution, and cross-channel media performance—but it should also start making some highly informed guesses about how linear audiences map to digital ones, in order to enable true attribution and media mix models. Ask how your DMP is positioned to tie the linear and digital strings together from a measurement perspective.
  • CDIM: Three years ago, we were still waiting for the “year of mobile” to occur, so “cross device identity management” was still largely pre-funded slideware on some entrepreneur’s computer. Jump to today, and “CDIM” and “CDUI” are at the tip of every ad tech tongue! As more and more people move from device to device—almost none of which support the traditional cookie as an identifier—marketers and publishers desperately need to map devices to people. It’s the only way to deliver the fabled “360 degree view” of the user. Ask your DMP vendor how they are prepared to deliver deterministic matches and, more importantly, how they reconcile identity without seeing a user logging in across devices. Doing great probabilistic matching necessitates not only strong algorithms but, more importantly, scale of users which breeds precision models. What is the size of their “truth set” of user data with which to probabilistically determine user identity? The quality and scale of that data will determine your choice.
  • Data Governance: I think the biggest question to ask a potential DMP vendor is their philosophy on data ownership. For both marketers and publishers, audience data is likely one of their top three assets. Trusting such data to a technology vendor is not something to be considered lightly. How is that data stored? What are the policy controls available to help you share that data with trusted partners? What about privacy and governance? How can my platform help me activate data in different places, where different rules about PII and data collection and storage apply? Knowing the answers to these before you buy can save lots of heartache (and legal fees) later. More importantly, how independent is your data? Is your partner also in the business of selling media or data? That can create some conflicts of interest—especially if your data might be valuable to a competitor. Finally, what if you want your data back? You have the right to get it out quickly, and in a useable format.

The bad news is that choosing a DMP isn’t any easier than it was three years ago. It’s a lot more complex, and you really need to dig in deeply to understand the very small nuances between platforms that appear, on the surface, to be very much the same. The good news is that there is a great deal of selection available, and some very high quality vendors to choose from. Take your time, put your vendors through a very rigorous process that includes asking the questions outlined above, and choose wisely!

[This post originally appeared in the EConsultancy blog on 5.11.15]