ProcureCon Marketing – More on Programmatic Advertising

PRocureCon marketing sepia 2015We gave a brief overview of last week's ProcureCon Marketing event last week. Here is the first of several more detailed articles about the event we will be featuring on the site in the coming days.

 

The first morning of the event was dedicated in the main to talking about “programmatic.” As we said in our previous article, there is some argument about exactly what that means. Is it simply the automation of media buying, with “computer talking to computer” to achieve the best results for the advertiser and best return for the media owner? Or is it also the whole concept of super-targeted adverts, whether online or even TV, where recipients of advertising eventually will only see the adverts that interest them?

In the future, it is not just digital media that may be approached on a programmatic basis. Television, for instance, may move to an approach where every viewer would see a string of adverts tailored to their needs and interests. That’s a pretty scary thought (so that’s ads for wine, new indie music, restaurants, books and gardening supplies for me ... doesn’t sound too bad actually).

One great example of the new approach at work at ProcureCon referred to dog food. Traditionally, 80% of the audience are not at all interested in your advert or your product – they don’t own a dog. So how do you hit only the 20% who do? A programmatic approach can get close to that, identifying exactly who does own a dog, then hitting only owners with very direct and targeted on-line advertising.

The speaker told one advertiser that they did not need to spend all their budget that month because they had been able to target the real dog-owning audience so well. But, as one procurement person said to me over coffee “that won’t go down well with my brand manager”! Why not? “They want to spend every penny of their budget, or they will lose it next year to the cat food brand manager”!

This all raises some big questions for marketing and procurement. Measuring “savings” is one issue. Sticking to dog food, if I hit 100% of the population at a cost per thousand views of £10, then move to a new scheme where my cost per thousand is £20, that doesn’t seem like a good piece of procurement work. But if in the second case, they are all dog owners, as opposed to just 20% in the first case, then the £20 is much better value. But how will you express that on your savings report?

And indeed, one key question struck me during this session. What exactly is the role of procurement in this new world? If unit cost reduction becomes increasingly irrelevant, the allocation of spend is automated, the data can immediately show the results of every part of that spend, and everything eventually becomes totally transparent, then how does procurement add value?

I think there is something there still, but it will be a somewhat different role. For instance, someone still has to understand the commercial mechanisms and structures. A presentation from Ebiquity, who help marketeers and procurement people get better value and results from their marketing spend, suggested that agencies are making a lot of money from digital, because of the complexity and lack of understanding of the commercial models.

Someone needs to get inside that, and the brand managers probably don’t have the appetite and skills to do that. But procurement will have to go well beyond the “three bids and beat them over the head” approach to demonstrate real added value in the new world of programmatic marketing and advertising.

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