A CMO Show Blog Post
Please explain: What is programmatic advertising anyway?
A CMO Show Blog Post
Please explain: What is programmatic...

These days, marketers need to consolidate and activate what they know about their customers from every data source and interact with them anywhere, across many touchpoints, to drive them to the point of sale and beyond. But what does all the jargon mean? And how can you use programmatic to drive business success? Rocket Fuel’s Managing Director, JJ Eastwood, explains it all…

I think that some marketers hear terms like big data, artificial intelligence and advertising exchanges and simply put programmatic in the too hard basket. Heck, even the word programmatic sounds daunting in itself.

Couple that with the fact that understanding how digital advertising worked, up until recently, was relatively straight forward – advertising deals were handmade to an almost shocking degree. The processes of ad buying and placement were handled by humans, and often conducted over phones and faxes. Records of manual insertion orders, on paper, were stored in endless filing cabinets. The mechanics of it were not pretty or impressive. And they definitely weren’t streamlined. But it was relatively easy to understand what was what.

Fast forward to today. Technology has taken the steering wheel. If you peer under the hood of programmatic advertising, it’s like looking at the engine of a rocket ship. There’s nothing but shiny blinking silicon and metal objects, all of which are executing an astonishing range of complex calculations in less than the blink of an eye. It’s tempting to just slam the hood down and stop trying to understand it.

But understanding the new world of digital advertising isn’t nearly as intimidating as it may seem.

Marketers still matter

There is no doubt that marketers will need to become more familiar with the new marketing technology platforms and their respective capabilities, however to say that marketers need to become data scientists or technology geeks is a bit far fetched.

In fact the technology is there to do the heavy lifting of data analysis and optimisation for marketers, and do it in real-time, providing them with valuable insights. This allows marketers more time to do what they do best, which is understand their products, understand their customers, develop the strategy and express their creativity.

Read more: CMOs struggling with digital business should read this

The nuts and bolts of it

Programmatic advertising is simply the use of technology to connect buyers and sellers – in our case advertisers and publishers. To demonstrate how this works, consider this:

Think about visiting a publishers website, viewing a video on YouTube or even connecting with friends on Facebook, as the content begins to load a flurry of activity happens in milliseconds where advertisers use technology to access what they know about you and how much to bid to place their ad in front of you.

The advertiser’s technology is known as a demand side platform or DSP and it will access things like age, demographics and past behaviour, if they have seen you before, if you have purchased something from them in the past and many, many more data signals.

For example, our platform builds a model for each advertiser off of 11 million data signals and revises and refreshes the model every 15 minutes, learning from every consumer interaction. This detailed understanding of consumers assists with two major business goals – it keeps the CFO happy by providing a much more effective form of performance marketing with a transparent return on ad spend and, for the CMO, it brings them one step closer to the holy grail of marketing ‘one to one communication with their customers at scale’. It also gives them a much better understanding of their customer and their online behaviours.

The three biggest misconceptions when it comes to programmatic advertising, according to JJ:

• It’s complicated and you will need hire a large team of experts

• There is a lack of premium inventory

• It will stifle creativity

JJ Eastwood is the managing director at Rocket Fuel, Australia and New Zealand.

Want more from JJ? Try this: The CMO Show – JJ Eastwood talks all things programmatic marketing

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