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.

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+.