You’ve likely heard the adage that data is the new oil.

by Ben Plomion
VP, Marketing & Partnerships

Article Highlights:

  • Programmatic marketing is the future of digital advertising.
  • When done right, programmatic marketing helps you serve ads to only those users who are likely to convert.
  • CMOs will find themselves wrestling for control of first-party data—crucial for programmatic marketing—with their CTOs.

In this metaphor, marketers play a crucial role in digging for and collecting data about users—from the pages they visit, to the items they search for, to the social graphs they share with—and refining it to deliver unique and relevant messages. We call this new practice “programmatic marketing,” and it’s the future of digital advertising.

How Programmatic Works
You may already be familiar with one of the most common types of programmatic marketing: retargeting. This marketing tactic allows you to target past visitors to your site with relevant display ads as they browse the Web, and it’s the go-to strategy when you want to extract maximum value from an existing customer.

However, retargeting has evolved during the past few years or so, and there are now more than seven types to retarget users. The most exciting of these is programmatic site retargeting, or PSR. By crunching an array of data points, such as traffic source, some retargeting companies are building a PSR score for each visitor that tells them how much to bid to serve that visitor a display ad.

When you want to attract new customers, another type of programmatic marketing is search retargeting. With search retargeting, you can target people—including people who have never visited your site—with display ads based on the keywords they’ve entered into search engines. The technique is uniquely effective because, as with standard search engine marketing, it leverages the power of intent that’s revealed by online searches.

Media buying, however, is only one application of programmatic marketing. For B2B marketers, it can also be a great way to optimize the content you serve prospects during their first visits to your company’s site. For example, if a potential client lands on a design agency’s site after reading an article the agency’s CEO wrote about HTML 5 vs. mobile apps, then the agency might display information on the home page about its mobile Web expertise, thus increasing its chances of landing the prospect.

This same strategy can also work across multiple company sites. Years ago when I worked at GE Capital, my team was looking for ways to increase conversions on our credit-card page. Our plan was to show our credit-card offer to users on our various company sites who had visited our credit-card section without converting. Frustratingly, the technology wasn’t quite ready at the time, but today savvy companies can easily tailor their offerings to specific customers.

One of the key advantages of programmatic marketing is the ability to eliminate display waste. When done right, programmatic marketing helps you serve ads to only those users who are likely to convert, increasing media efficiency and driving down media costs in the process.

In addition, programmatic marketing allows you to optimize the user experience on your site. As mentioned above, the content on a site can be tailored to a user’s browsing or search history. This is the future of business sites, where every visit is as unique to visitors as their very own Flipboard.

Last, the potential for hypertargeted email marketing is astounding and currently underestimated. When you marry behavior data (the products consumers see on a retailer’s site) with CRM data (previous transactional data), it’s a recipe for a big boost in sales.

Programmatic marketing is an exciting, new technology, but it doesn’t come without challenges for CMOs. At many companies, CMOs will find themselves wrestling for control of first-party data—crucial for programmatic marketing—with their CTOs.

Once you take control of your data, data aggregation becomes the next hurdle. Data management platforms (DMPs) are a good solution for this because they skillfully integrate the first- and third-party data you need to successfully execute your programmatic marketing plan.

Next, you want to avoid hiring multiple retargeting vendors, even though it’s tempting to do so in order to achieve scale. When you have multiple retargeting vendors working off of the same data, they’ll end up bidding against each other and driving up the price of impressions.

Finally, privacy is key. CMOs need to make sure that there’s a strong privacy policy in place so that every customer’s data is anonymous and secure.

Latest Evolution
A few retargeting companies recently partnered with Facebook to allow marketers on FBX, the Facebook ad exchange, to target users based on the keywords they’ve entered into search engines. While the venture is new, the early returns have been very promising. Since Facebook accounts for 25 percent of all U.S. page views, advertisers can expect that FBX will carry search re-targeting into the mainstream.

Programmatic marketing, in other words, can no longer be ignored. CMOs must embrace it, implement it, and become comfortable with it.