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Everything You Wanted To Know About Programmatic, But Were Afraid To Ask

Programmatic advertising is about way more than bidding on ads at the lowest price and getting efficiency. Or so I think. I normally avoid the topic like the plague because I get a headache.  

I finally got help with my problem: Larry Shender, director of brand solutions at Turn, a digital marketing hub, became my online video therapist/professor. He gave me the confidence to maybe even hold my end of a conversation on the topic, some day, without drooling on the floor. If his patience and insights were helpful for me, I’m guessing there are a lot of marketers out there who could use some guidance too. If I can (pretend to) understand it, anyone can.

Basic picture is that using data the right way means programmatic can deliver results that would wake Henry Wanamaker from the dead: precise targeting against the right person at the right time and place. Shender has a lot to say about this because he's been around, having spent a decade steeped in online video, starting at Tremor in 2005. 

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He said, for example, that the evolution has been away from content-matched buys on, originally, big portals — which I remember from way back, when the thing to do was own AOL for a day. But I always thought of programmatic media transactions as being principally about efficiency and scale to lower CPMs. But Shender says it’s more about avoiding tossing an expensive net into a pond because someone said 'there are fish in them waters.' It’s buying real estate on what “should” be complementary content. That means, say, buying on an auto vertical if you're selling Sonatas; or buying on a recipe blog if you're slinging macaroni and cheese. The real pot of gold is the prospect, not the content, which should be obvious. “When you think about programmatic, it's about who is my audience and who am I reaching," says Shender. "Not, What content am I adjacent to?”

You can see how data and audience insights can be helpful. Let’s say you're doing ad network buys and hitting an audience of women, 25-to-54, who the publishers say reads their content. That's maybe 60 million people, a pretty huge group. Is that my core audience? Really? Are they all good prospects? From Shender’s perspective, programmatic avoids a video traffic jam, because some publishers are maybe not too scrupulous and don't mind packing ‘em in to get bigger CPMs. “An ad network basically goes and takes on inventory. They'll go to the New York Times and A&E and they'll buy the inventory, then resell it at a big mark-up.”

For its part, Turn, Shender says, makes inventory available to marketers based not just upon where the best inventory is but where the best customers for the brand are found.

Marketing guru Jim Sanfilippo, former EVP and COO at Innocean, points out that digital is, indeed, a great place for tier-one video branding exercises. However, he also said that, “While I love digital, it's too soon to believe the hype about data and whom you’re reaching.” Jim also said there are a lot of mysteries involved in clicks. And then there’s the transparency issue: data owners need to know how their data is being used. He feels this doesn’t happen enough. But he also believes that television isn't there yet, either, for the obvious reason that ads are optional views.   

As for the cost side of programmatic, Shender says the bidding part of it lets a brand avoid paying $30 CPM for an impression if it’s not worth it. “If it's better for me to buy it on Huffington Post at seven dollars, then it's even more affordable and it's more effective for me and I'm saving money by doing that.”

So, if you’re treating the Internet like TV with a keyboard, you are wasting your money. It's about insights and using them in a way you can only do online using both digital data and data from, say Polk, or Experian or Datalogix:  “Here are the personas that we want to reach. Here's all the data we know about their behavior, et cetera,” says Shender. “Find us 10,000 or 100,000 more people just like them.” 

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