• by Matthew Greitzer , Op-Ed Contributor, July 27, 2015

The digital advertising industry has been abuzz over the past year due to the adoption and early success of programmatic media.  Simply defined, programmatic media automates and simplifies the digital ad-buying process and generates more effective results by applying Big Data to more accurately target and engage prospects and customers. 

Retailers as a class of marketers have a dramatic opportunity to harness the power of programmatic marketing. They have all the assets at their disposal that can drive programmatic success, such as rich customer data, the raw materials to fuel relevant and impactful ad creative; clear ROI goals; and a digital-first marketing mentality. A comprehensive programmatic strategy should be central to any retailer’s digital mix. 

Yet most retailers take a tactical approach to the opportunity: isolating retargeting with a point-solution, outsourcing prospecting efforts to disparate ad networks, and evaluating each of these initiatives in a silo, without consideration of how one impacts another. 

Moreover, many retailers work with providers whose incentives are not completely aligned with their own. Retargeters, for example, arbitrage retailers’ customer data and focus on click volume over quality of user experience and revenue. This approach may solve the immediate need but will lower lifetime consumer value. Ad networks often co-op retailers’ data for the benefit of their competitors, undercutting a brand’s competitive advantage in the marketplace.  

Retailers that want to harness the full value of programmatic should cast away the point-solution approach and work to develop a comprehensive programmatic strategy. Here are 5 guidelines to help with that process: 

1. Take control of your remarketing investment. Do so first by insisting on remarketing transparency; don’t get arbitraged on your own data. In addition, work to understand the incremental impact of remarketing. Many of your remarketing dollars are being spent on customers who would have bought anyway thereby, lowering the return of that investment. Seek to understand the lift that remarketing drives across customer segments, and invest in that lift. Where lift is flat, save that investment for other initiatives such as CRM or prospecting.
2. Use your data to find other prospects. Your current customer base is the best indicator of future customers. Harness that data for prospecting efforts through lookalike modeling. Also, make sure to get feedback on what specific customer signals are driving responsiveness. Lastly, use data from your remarketing campaigns to identify Web properties that drive an outsized return. These can be good opportunities for sponsorships or direct buys to build your awareness base.
3. Extend your CRM efforts through programmatic. CRM through email is a time-tested and highly effective revenue driver. These efforts should be augmented through programmatic media across display, mobile, and even video. Doing so increases email responsiveness, and also enables reach against those customers who don’t respond to email at all. 
4. Evaluate cross-channel success. Media drives activity in other channels such as search. Marketers should understand the impact and incorporate that success into their ROI and attribution models.
5. Use mobile to drive in-store (or e-store) activation. Augmenting your existing efforts using mobile will grow your revenue. Using programmatic to implement your mobile campaigns is essential to ensure the insights from those interactions are feeding into your overall display, video and other channel optimizations. 

Retailers that follow the guidelines above will manifest several major benefits beyond just greater efficiency in their investments.  They will also accrue more responsiveness to their campaigns; better user experiences; and deeper insights into campaign dynamics, which are the real drivers of revenue.  A forward-thinking, data-driven, digitally savvy approach to marketing is an opportunity that all retailers are well positioned to embrace.