• by Joe Mandese  @mp_joemandese, July 2, 2012

KOHLER, WISC. – Programmatic-buying of online display ad inventory has developed a reputation for being a way for performance or direct response oriented advertisers to buy cheap, “remnant” inventory that might otherwise go unsold, but the practice increasingly is being embraced by big brand marketers who believe it is a fast and efficient way to procure so-called “premium” ad impressions. The latter sentiment was championed Friday by Bob Arnold, associate director of global digital strategy for Kellogg’s during a keynote at MediaPost’s Brand Marketers Summit here.

“It’s a pretty safe prediction to say that programmatic buying is going to take over the media-buying space,” Arnold asserted, implying that as more marketers and agencies discover the premium branding benefits of the practice it will ultimately expand to include more forms of online advertising, and other media as well.

Kellogg’s Arnold is not alone. Ford Motor Co. and it’s agency Team Detroit recently teamed up with online analytics firm DataXu for a test of a so-called “programmatic premium” platform that enabled Ford to generate “double-digit” improvements in its online campaign performance. The Ford campaign utilized data from DataXu to make impression-level decisions for 15 different online display and video campaign buys on automotive sites the companies claim are not normally available via online advertising exchanges.

Kellogg’s Arnold, meanwhile, painted a similar picture Friday for summit attendees In a presentation entitled “How To Have Your Cake And Eat It Too,” he said that with the exception of certain high-touch sponsorships that require dealing with publishers’ direct sales organizations, Kellogg’s rarely makes online display ad buys that aren’t based on programmatic purchases.

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.