Is 2015 the Year of Programmatic Branding?

YourBrandHereWith companies like Kraft and Kellogg’s starting to leverage the programmatic pipes for equity advertising, we are starting to hear a lot of buzz about the potential for “programmatic branding,” or leveraging ad tech pipes to drive upper-funnel consumer engagement. It makes sense. Combine 20 years in online infrastructure investment with rapidly shifting consumer attention from linear to digital channels, and you have the perfect environment to test whether or not digital advertising can create “awareness” and “interest,” the first two pieces of the age old “AIDA” funnel.

The answer, put simply, is yes.

Online reach is considerably less expensive than linear reach, and we are starting to have the ability to reliably measure how that brand engagement is generated. Marketers want an “always-on” stream of equity advertising that comes with measurement—but they also need it. With attention rapidly shifting from traditional channels, investments in linear television are starting to return fewer sales. But most marketers are just starting to gain the digital competency to make programmatic branding a reality.

That competency is called data management—the ability to segment, activate, and analyze consumer audiences in a reliable way at scale. Why is that so?

The most fundamental problem with digital branding is that it is truly a one-to-one marketing exercise. If we dream of the “right message, right person, right time,” then matching a user with her devices is table stakes for programmatic branding. How do I know that Sally Smith on desktop is the same as Sally Smith on tablet? Cross-device identity management (CDIM or, alternatively, CDUI) is the key. Device IDs must be mapped to cookies, other mobile identifiers, and Safari browser signals in order to get a sense of who’s who. Once you unlock user identity, many amazing things become possible.

Global Frequency Capping

One of the reasons programmatic branding has yet to gain serious ground with marketers is because of waste. This is both real (lots of wasted impressions due to invisible ads or robotic traffic) and perceived (how many impressions are ineffective due to frequency issues). The former problem is getting solved by smart technology, and already somewhat mitigated by market pricing. But the latter problem is solvable with data management. Assuming the marketer understands the ideal effective frequency of impressions per channel, or on a global basis, a DMP can manage how many impressions an individual sees by controlling segment membership in various platforms. Let’s say the ideal frequency for cereal advertising aimed at Moms is 30 per day across channels. The advertiser knows less than 30 impressions lessens effectiveness—and over 30 impressions has negligible impact. Advertisers using multiple channels (direct-to-publisher, plus a mobile, video, and display DSPs) are likely over serving impressions in each channel, and maybe underserving in key channels like video. Connecting user identity helps control global frequency, and can save literally millions of dollars, while optimizing the effectiveness of cross-channel advertising.

Sequential Messaging

If “right person” technology is enabled as above, then it makes sense to try and get to “right place and right time.” Data management can enable this Holy Grail of branding, helping marketers create relevance for consumers as they embark on the customer journey. What brand marketers have dreamed of is now possible, and starting to happen. Dad, in the auto-intender bucket, gets exposed to a 15 second pre-roll ad before logging into his newspaper subscription on his tablet in the morning; gets the message reinforced by more equity display ads in the afternoon at work; and, while checking messages on his mobile phone on the way home, gets an offer for $500 off with a qualified test drive. After he hits the dealership and checks in via the CRM system, he receives an e-mail thanking him for his visit and reminding him of the $500 coupon he earned. These tactics are not possible without tying both user identity and systems together. Doing so not only enables sequential messaging, but also the ability to test and measure different approaches (A/B testing).

Cross Channel Attribution

How about attribution? It’s impossible to perform cross-channel attribution without knowing who saw what ad. At the end of the day, it’s really about the insights. Proctor and Gamble is famous for spending millions of dollars every year to understand the “moment of truth,” or why people choose Tide over Surf detergent. Although they know consumer segmentation and behavior better than anyone, even the biggest brand marketers struggle to gain quality insights from digital channels. Data management is starting to make a more reliable view possible. Brand advertising is just another form of investment. Money is the input, and the output is sales and—as important—data on what drove those sales. In the past, brand marketers were reliant upon panel-based measurement to judge campaign effectiveness. Now, data management helps brands understand which channels drove results—and how each contributed. It is early days for truly reliable cross-channel attribution modeling, but we are finally starting to see the death of the “last click” model. Smart marketers are using data to author their own flexible attribution models, making sure all channels involved receive variable credit for driving the final action. In the near future, machine learning will help drive dynamic models, which flex over time as new signals are acquired. We will then start to see just how effective (or not) tactics like standard display advertising are for driving upper funnel engagement.

So, is 2015 the year for programmatic branding? For a select group of marketers that are leveraging data management to enable the best practices outlines above, yes. The more accurately marketers can map online user identity and understand results, the more investment will flow from linear to addressable channels.

An Ad Tech Temperature Check

tenmpcheckClayton Christensen, the father of “disruptive innovation,” would love the ad technology industry.

With more than 2,500 Lumascape companies across various verticals chasing an exit, venture funding drying up for companies that haven’t made an aggressive SAAS revenue case and the rapid convergence of marketing and ad technology, the next few years will see some dramatic shifts.

The coming tsunami of powerful megatrends is driving ad technology relentlessly forward at a time when data is king and the companies that best package and integrate it into multichannel inventory procurement will be the rulers.

In a world where scale matters most, the big are getter bigger and smaller players are getting forced out, which is not necessarily good for innovation.

Data: Powering The Next Decade Of Ad Tech

Data, especially as it relates to “people data,” is and will be the dominant theme for ad technology going forward.

Monolithic companies with access to a people-based identity graph are leaning in heavily to identity management, trying to own the phone book of the connected device era. Facebook’s connection to Atlas leverages powerful and deeply personal deterministic data, continually volunteered on a daily basis by its users, to drive targeting. Google is attaching its massive PII data set garnered through Gmail, search and other platforms to its execution platforms with its new DMP, DoubleClick Audience Manager.

Both platforms prefer to keep information on audience reach safely within their domains, leaving marketers wondering how smart it really to tie the keys of user identity in a “walled garden” with media execution.

Will large marketers embrace these platforms for their consumer identity management needs, or will they continue to leverage them for media and keep their data eggs in another basket?

While some run into the arms of powerful cloud solutions that combine data management with media execution, many are choosing to take a “church and state” approach to data and media, keeping them separate. Marketers have to decide whether the risk of tying first-party data together with someone’s media business is worth having an all-in-one approach.

Agencies Must Adapt Or Die As Consultancies Edge Into Programmatic

Media agencies have also been challenged to provide more transparency around the way they procure inventory, the various incentive schemes they have with publishers and their overall methodology for finding audiences. With cross-device proliferation, agencies must be able to identify users to achieve one-to-one marketing programs, and they need novel ways to reach those users at scale.

That means a commitment to automation, albeit one that may come at the expense of revenue models derived through percentage of spend and arbitrage. Agencies will need new ways to add value in a world where demand-side players are finding closer connections to the supply side.

As media margins collapse, agencies need to act as data-driven marketing consultants to lift margins and stay relevant. They face increasing competition from large consultancies whose bread and butter has been technology integration. It’s a tough spot but opportunities abound for smart agencies that can differentiate themselves.

Zombie Companies Die Off But Edge-Case Innovation Continues

We’ve been talking about “zombie ad tech” for years now, but we are finally starting to see the end of the road for many point solution companies that have yet to be integrated into larger mar tech “stacks.”

Data-management platforms with native tag-management capabilities are displacing standalone tag-management companies. Retargeting is a tactic, not a standalone business, which is now a status quo part of many execution platforms. Fraud detection systems are slowly being dragged into existing platforms as add-on functionality. Individual data providers are being sucked into distribution platforms and data exchanges that offer customer exposure at scale. The list goes on and on.

This is an incredibly positive thing for marketers and publishers, but it is also a challenge. Cutting-edge technologies that give a competitive advantage are rarely so advantageous after they’ve moved into a larger “cloud.” Smart tech buyers must strike a balance between finding the next shiny objects that confer differentiating value, while building a stable “stack” that can scale as they grow.

That said, the big marketing technology “clouds” offered by Adobe, Oracle and Salesforce continue to grow, as they gobble up interesting pieces of the digital marketing “stack.”

Will marketers go all-in on someone’s cloud, build their own “cloud” or leverage services offerings that bring a unified capability together through outsourcing?

Right now, the jury is out, mostly because licensing your own cloud takes more than just money, but also the right personnel and company resources to make it work. Yet, marketers are starting to understand that the capability to build automated efficiency is no longer just a function of marketing, but a way to leverage people data to drive value across the entire company.

Today’s media targeting will quickly give way to tomorrow’s data-driven enterprise strategy. It’s happening now, and quickly

New Procurement Models Explode Exchanges, Drive Direct Deals

I think the most exciting things happening in ad technology are happening in inventory procurement.

Programmatic direct technologies are evolving, adding real audience enablement. Version 1.0 of programmatic direct was the ability to access a futures marketplace of premium blocks of inventory. Most buyers, used to transacting on audience, not inventory, rejected the idea.

Version 2.0 brings an audience layer to premium, well-lit inventory, while changing the procurement methodology. I think most private marketplaces within ad exchanges are placeholders for a while, as big marketers and publishers start connecting real people data pipes together and start to buy directly. It’s happening now – quickly.

I also can see really innovative companies leaning into creating a whole new API-driven way of media planning and buying across channels that makes sense. In the near future, the future-driven approaches of companies like MassExchange will bring to cross-channel inventory procurement a methodology that is more regulated, transparent and reminiscent of financial markets. It’s a fun space to watch.

Who will begin adding algorithmic, data-science driven automation and proficiency to the planning process, not just execution and optimization in the programmatic space?

Many of those in the ad technology and media game are here for the challenge, the rapid pace of innovation and the opportunity to change the status quo. We are all getting way more than we imagined lately, in a fun, exciting and fast-moving environment that punishes failure harshly, but rewards true market innovation. Stay safe out there.

[This post was originally published in AdExchanger on 6.16.15]