Why advertisers shouldn’t be afraid to pay more for programmatic ads | Econsultancy.
Author: Roy Eosemarin is Head of Analytics and Data Science at Infectious Media and a contributor to Econsultancy.
The biggest misunderstanding about programmatic advertising is it’s a way to buy ads at a lower price, when it’s really about using data to determine the value of ads and pay accordingly.
Recently there have been a number of large brands shifting digital budgets to programmatic advertising.
However, some of these brands seem to be approaching programmatic in a similar way as offline, by focusing on buying at the lowest price.
Advertisers need to be looking at programmatic differently because by using direct buying tactics they are missing an essential opportunity.
Programmatic advertising allows advertisers to use data to target ads more effectively, reducing wastage and increasing impact. When delivered expertly advertisers can achieve much more value even by paying a higher price per impression.
To show this we looked at two separate campaigns for a client, one with direct response objectives and the other brand objectives, and charted the price paid for media.
Although using fundamentally the same technology, these two campaigns have been set up very differently in terms of data used, algorithms and optimisation strategy.
The direct response campaign was designed to maximise conversions, the number of people who see the ads who go through and buy online. Whereas the branding campaign was set up to maximise impact with the client’s target audience.
Conversion vs cost
Looking at the ‘Conversions vs Cost’ chart from the direct response campaign the first trend you can see is programmatic inventory varies dramatically in cost.
This underlines how premium publisher inventory is becoming more available programmatically, with premium prices to match.
The general trend here is of an increasing rate of converting users from an increasing cost. This targeting is achievable through programmatic because of the ability to predict the value of single impressions with the intelligent use of data and buy accordingly.
So for the advertiser even though some of the media costs are tens of times greater than the lowest price, the value of the ad is similarly higher, translating into the same (or less) cost per sale.
For those familiar with programmatic, this is to be expected. There is more of a question when it comes to valuing brand campaigns as there is no easily tracked conversion.
The measurement of brand advertising depends on the advertiser’s objectives and is often many layered. It can be based on anything from audience demographic and reputation of the publisher, to contextual relevance.
However, as out-of-view ads have no value, a measure of viewability is fundamental to the impact of all brand campaigns.
Viewability vs cost
Looking at the ‘Viewability vs Cost’ chart from the branding campaign it’s again evident that with premium publishers now selling programmatically there is a large variance in the cost of media.
Also there an equally large spread in viewability, from a fleeting glimpse to view-times of multiple seconds. However, there is a definite trend here of paying more for impressions with longer view-times.
Paying more for ads of higher value seems quite intuitive. Two years ago we were the first specialist to use viewability technology to improve client campaigns, but it is still not standard in most programmatic advertising.
We’ve recently integrated viewability into our bidding technology so we actively predict the viewablity of ads before we buy.
Programmatic advertising is different to offline and direct digital buying, as it allows advertisers to better understand their audience.
Through a mixture of insight, technology, testing and learning advertisers can find out what their audience responds to and shape their advertising accordingly, for both performance or branding objectives.
So whether you are looking to increase conversions or increase the impact of your advertising don’t prioritise price over value as sometimes the most expensive buys are the most one effective ones.