Defining the Concept of Programmatic
Programmatic refers to the automated buying/ creation/ distribution of various marketing components within digital marketing. Programmatic was initially adopted for the bidding and buying of ad spaces from publishers based on user data and machine learning algorithms through ad exchanges (a third-party marketplace for automated buying and selling of ad inventory based on specific pre-defined criteria), demand side platforms (a tool used to engage with multiple ad exchanges simultaneously to create targeting criteria, optimize ad campaigns in real time) and trading desks (a platform within the agency which works along with demand side platforms to improve performance and to bid for ad inventories at the lowest possible price).
Recently, the same application of user data and machine learning algorithms for targeting users is being applied for the development of user-specific advertisements using programmatic creative. By definition, programmatic creative enables the content of an advertisement to be programmatically selected from a set of pre-defined creatives based on the user’s navigation history, so that it becomes more relevant and personal to the targeted user. Just as in programmatic media buying, programmatic creative utilizes trading desks and ad exchanges to map ad buys. The success of each ad is then analyzed and the creative revisited.
Programmatic Creative vs. Dynamic Data-Driven Advertising
Programmatic creative varies from dynamic data-driven advertising. Programmatic creative has a set of multiple, pre-defined versions designed for different demographics, behaviors, times, locations and so on, while dynamic data-driven advertising is a display ad technology that automatically optimizes ad creative based on multivariate testing; i.e., using an algorithm to interpret the results in order to serve ads that perform better.
Programmatic creative benefits marketers through mass personalization and enhancing customer engagement by utilizing creative content in a variety of formats, such as rich media, video, and native. With real tangible results, the adoption of programmatic creative is set to skyrocket in the coming years.
What Does This Mean for Marketing Procurement Teams?
With programmatic set to disrupt the creative agency landscape, traditional creative agencies with old skillsets need to be highly technology savvy, superior with data analytics and maintain their creative essence. This has created a new breed of creative agencies specializing in programmatic. Agencies like Thunder, Flite and Spongecell have built their capability from the ground up, hiring and nurturing talent with the right skills, investing in custom technologies and tools, and operating with a market-relevant business model.
For marketing procurement teams, this means re-evaluating digital marketing procurement activities to include this new breed of creative agencies within their agency roster. On the other hand, marketing procurement teams of companies with billion-dollar digital marketing budgets can decide to move programmatic creative in-house. While moving programmatic in-house, factors such as investing in technology platforms (e.g. Celtra) and in hiring highly skilled talent have to be taken into consideration. Whether the marketing procurement team decides to include creative agencies in their current agency roster or to move programmatic creative in-house, care has to be taken to maintain the scalability and agility to provide the best customer experience and high ROI on ad spend.