Buying In To Programatic Buying (How Kellogg's Did It, And Why Other Consumer Brands Ultimately Will)

by , Jun 29, 2012, 11:27 AM
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It’s no surprise that direct response, performance and commerce marketers have embraced programmatic-buying of online media, because it’s pretty easy to correlate the return on media spending via clicks, conversions, etc., but Kellogg’s Associate Director-Global Digital Strategy Bob Arnold just made a great case for brand marketers too.

In fact, he labeled his opening keynote presentation at the Brand Marketers Summit, “How To Have Your Cake And Eat It Too.”

Having your cake, Arnold said, meaning “maximizing your cost efficiency.” Eating it, he added, means that it is “as effective as other buys.”

Based on Kellogg’s experience to date, programmatic buying has been “very successful for us.”

Arnold would not disclose specific numbers, but he more or less implied that the bulk of Kellogg’s online display ads – with the exception of sponsorships and high-touch buys – are now purchased through programmatic platforms, including DSPs (display side platforms) and exchanges.

Arnold said Kellogg’s could make the shift for several reasons, including the fact that there now is abundant inventory available through the programmatic buying marketplace. He estimated 4 trillion impressions currently are traded that way each month.

Supply side aside, he said Kellogg’s also developed crucial elements for evaluating the impact of programmatic buys. Specifically, he said they developed KPIs (key performance indicators) that are proxies for things like clicks and conversions, but based on brand perceptions. His tools have mainly been regression analyses such as marketing mix models and attribution analysis, but he bottom line is that Kellogg’s has become quite confident that when it shifts budgets into programmatic buys, it generates incremental sales.

“For one brand, the ROI went up over five times. Another brand went up six times,” he said, adding, “These are huge brands for Kellogg’s and we have been able to demonstrate very strong ROIs there.”

The results have been so positive for Kellogg’s that he said its brands and agencies rarely do business with online suppliers unless they offer some programmatic buying.

Going forward, he said, he expects “more and more” inventory will be coming into the programmatic marketplace.

“It’s a pretty safe prediction to say that programmatic buying is going to take over the media-buying space,” he said, implying that over time it will begin to affect other forms of media as well.

2 comments on "Buying In To Programatic Buying (How Kellogg's Did It, And Why Other Consumer Brands Ultimately Will)".

  1. doug render from spotxchange
    commented on: June 29, 2012 at 4:26 p.m.
    DSP = Demand Side Partner, not "display" Side Partner. DSPs are not limited to display advertising, they are very active in video, too. Here's a Forrester webinar on the video RTB space. http://www.spotxchange.com/spotxchange-video-rtb-webinar.html
  2. Joe Lyons from Beanstock Media
    commented on: July 1, 2012 at 12:04 a.m.
    Totally agree, the industry is embracing programmatic buying and brand dollars are following. At Beanstock, we're in the process of making branded, high impact ad units available for programmatic buyers as well. The numbers get bigger every month!

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