Taking the Problematic out of Programmatic
“What we are finding is that when it comes to Programmatic use, South Africans are behaving completely differently to international consumer trends” says Ismet Goksen, Director of Programmatic and Growth EMEA & LATAM at Ad Colony. With these opening words, Goksen kicked off our session on how best to utilise Programmatic Advertising within the South African audience.
What exactly is Programmatic?
The programmatic model is based off the stock exchange model. Essentially, it is the relationship between Supply-Side Platform (SSP), Demand-Side Platform (DSP) and Ad Exchange. In order to call media buying “programmatic”, there needs to be RTV as well as auctions.
There are two types of Programmatic Advertising:
- Cookie-based Advertising
Cookies are small text files that are dropped on a user’s web browser by a website that the user was viewing. Each cookie contains a small amount of information (such as a unique identifier) that links a user to a specific website. This allows for a more personalized experience for the user as the browser “remembers” the user. The information stored in a cookie and its ability to track user activity on the web has been used by marketers and advertisers to display more relevant advertisements to users and improve ad effectiveness.
Cookies also exist within apps when a browser is needed to view certain content or display an ad within an app. However, the cookies are completely “sandboxed” in apps. This means that cookies from one app cannot be shared with another app and that they remain private to each app. This is a handicap for mobile marketers as it is extremely difficult to track user activity and behaviour across apps. Being able to track user activity and behaviour is the foundation of ad targeting and thus, the inability to do so makes it extremely challenging for mobile marketers to improve ad effectiveness.
- In-App Advertising
In-app advertising is an effective monetization strategy for mobile publishers in which app developers get paid to serve advertisements within their mobile app. Not only do apps drive mobile usage — they also drive global media consumption. This makes in-app advertising a vital marketing channel for brands and agencies.
“What we are finding is that people are moving away from cookie-based advertising for a variety of reasons,” explains Goksen. Since we continue to move from web to mobile, cookies lose their relevance as they are essentially web-centric. Further reasons that the industry is moving away from cookies include factors such as:
- Tracking Method (one of the main limitation of cookies on mobile browsers is that they reset when the browser is closed or when the phone is shut down/restarted)
- Available user data (cookies in mobile are, at best, unreliable)
- Ad blocking (web-centric advertisements can be automatically blocked)
- Average Daily Usage (mobile app usage accounts for almost 86% of mobile user’s time with 14% on the mobile web)
- Match Ratio (cookie match ratios remain low and so the mobile advertising industry needs a replacement for the cookie that can be used to track user activity across apps)
|Mobile Apps||Features||Mobile Web|
|Device ID||ß Tracking Method à||Cookies|
|GPS Location, device type, OS, gender, age, wireless, carrier||ß Available User Data à||Web activity (e.g. shopping habits, favourite websites)|
|Ad-blocking has not yet advanced to universally block in-ap ads||ß Ad Blocking à||Vulnerable to in-browser ad blockers|
|3 hours 8 mins||ß Average Dailey Usage à||33 Minutes|
|Up to 95% match ratio in some network||ß Match Ratio à||40%-50% match rate|
In order to create true audiences, one needs to make use of all three key targeting options, namely:
- Demographics (the parameters which are used in segmenting the targeted audience into smaller groups).
- Location (Location-based advertising (LBA) is a new form of advertising that integrates mobile advertising with location-based services. The technology is used to pinpoint consumers’ location and provide location-specific advertisements on their mobile devices)
- Dayparting (a pay-per-click (PPC) advertising tactic by which you schedule ads for certain times of day or certain days of the week in order to more effectively target audiences).
When it comes to in-app advertising, a key difference exists between open-exchange versus private-market. “Open-Exchange provides a wide reach, however too wide can often be like catching salmon in the ocean. Private-market is more specific as one is able to buy from a designated area and one has complete control over the ad-format” says Goksen. Internationally, the market is moving away from open-exchange (with unlimited possibilities) towards private-market PNP (which is more specific). South Africans on the other hand are focussing more on open exchange because less targeting often means a cheaper price. “South Africans are buying leftover adverts because one cannot buy first-serve adds if bidding is too low. But cheap is often fraught with reward” Goksen warns.
How to be utilise Programmatic
“In order to get the most out of Programmatic, one needs to focus on the brand’s Key Performance Indicators.
Your CPM (Cost per thousand denoting the price of 1,000 advertisement impressions on one webpage) should therefore be informed by:
- vCPM: Multiply CPM with viewability ratio and paying only viewable impressions.
- eCPM: Convert CPM to eCPM based on your campaign objective.
- CPCV: Pay only completed views and use cost per completed view unit price.
- qCPM: Multiplying CPM with other metrics like viewability ratio, VCR and converting to quality CPM.
A case study from South Africa can be found below:
Understanding how best to utilise CPM through the integration of qCPM, vCPM, eCPM and CPCV, is crucial to make sure your ads are not just surviving, but thriving, through Programmatic. Partner with the leaders in digital marketing with the Black Snow Group.
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