What is Programmatic Advertising

Taken from digiday.com 's article
WTF is programmatic advertising?

Klasmaya additional figure

Source: BI Intelligence estimates, Magna Global, IDC

Programmatic ad buying has changed the face of online advertising, but there’s still confusion around what it actually is. Here’s a primer, in plain English:

What is programmatic ad buying?

“Programmatic” ad buying typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically.

Why does programmatic advertising matter?

Efficiency. Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, which are expensive and unreliable. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. Humans get sick, need to sleep and come to work hungover. Machines do not.

So robots are replacing people? Great.

Yes and no. Technology is being used to replace some of the more menial tasks that humans have historically had to deal with, like sending insertion orders to publishers and dealing with ad tags, but they’re still required to optimize campaigns and to plan strategies. Programmatic technology will probably mean there are fewer ad buyers in the world, but it could also allow both marketers and sellers to spend more of their time planning sophisticated, customized campaigns instead of getting bogged down in bureaucracy.

Is programmatic buying is the same as real-time bidding, then?

No, it’s not. Real-time bidding is a type of programmatic ad buying, but it isn’t the only one. RTB refers to the purchase of ads through real-time auctions, but programmatic software also allows advertisers to buy guaranteed ad impressions in advance from specific publisher sites. This method of buying is often referred to as “programmatic direct.”

Is programmatic “the future of ad buying”?

Probably, yes. It’s impossible to tell what portion of advertising is now traded programatically, but it’s definitely on the rise. Some agencies now say they’re eager to buy as much media as possible through programmatic channels, and some major brands have even built out in-house teams to handle their programmatic ad buying as they spend more of their marketing budgets that way. At the moment, it’s mainly online ads that are traded programatically, but increasingly media companies and agencies are exploring ways to sell “traditional” media this way, including TV spots and out-of-home ads.

Personalized Digital Channel Marketing

Taken from emarketer.com

Offline Personalization Matters Just as Much
Marketers who personalize offline most likely to see lift in conversions
January 14, 2015

There’s been plenty of talk about personalizing online communications, such as email, but recent research suggests it’s equally important to tailor offline customer experiences as well.

According to September 2014 research by Econsultancy in association with RedEye, 95% client-side marketers worldwide who had implemented personalization via offline channels had seen an uplift in conversion rates. This was more than any digital channel studied, and led email—the most popular personalization channel—by 5 percentage points. Among digital channels, websites and search engine marketing (SEM) were most likely to have seen lifts in conversion due to personalization, with the latter tops across all channels for driving “major” uplift.

However, those polled weren’t exactly focusing on the most successful channels. Just 23% of client-side marketers worldwide personalized offline channels, compared with 88% who used email personalization and 44% who did so for websites. Agency professionals were even less likely to tailor offline efforts, at just 17%. One-fifth of respondents personalized SEM—the second-lowest response for both marketers and agencies.

Econsultancy’s findings are another reminder of the need for retailers to provide an omnichannel experience. While digital and mobile are no doubt part of the purchase path, most final buying decisions still happen in-store. Retailers who can tie all of the data collected on a customer stand a better chance at closing the deal.

But many face a long road ahead in doing this. In a study by Retail Systems Research for SPS Commerce, released in September 2014, just 5% of US companies believed they had made advanced progress in executing an omnichannel strategy, compared with 37% who said they were lagging.

Digital Advertising

Taken from Investopedia article:
How The Internet Web Ad Industry Works
By Trevir Nath

Over the past 10 years, advertising strategies have evolved as a result of technological development. Commercials and print advertisements, which dominated advertising in the 20th century, have lost importance as the internet has provided new channels for advertisers to reach a larger audience. Gannett Company estimated in 2013 that the newspaper industry lost more than $1 billion in advertising, a 5.3 percent decrease from the prior year. The advertising industry has moved largely away from print advertising in favor of digital and web based advertisements.

Online marketing has grown and expanding containing a number of tools to reach consumers via the Internet. Areas of online marketing include, search engine optimization, social media marketing, and mobile advertising to name a few. While various forms of internet advertising exist to optimize sales, it is imperative for companies and advertisers to reach the highest rank on search queries within Google. Google (GOOG) has created Google AdWords and AdSense for advertisers to utilize in conjunction with other marketing strategies.

GOOGLE ADWORDS AND ADSENSE
A majority of Google’s revenue is generated from advertising. Google’s online advertising programs, AdWords and AdSense, generated $50 billion of Google’s $57 billion in revenue in 2013. Google AdWords is a marketing strategy for companies and advertisers to reach a larger audience. Appearing higher on a Google search query ultimately bodes well for new and established firms.

AdWords provides companies an opportunity to bid on the placement of an advertisement and keywords within Google’s website. Searches in relation to the business will result in the company’s advertisement and website appearing as a result of a search query. Google only generates revenue when advertisements are clicked. This is defined as cost per click and is a marketing strategy to direct traffic to a company website.

Likewise Google AdSense enhances a company’s opportunities to reach larger audiences through advertisements. Google places the advertisements within other websites to produce clicks rates and website traffic. Largely recognized for its search engine, Google generates a majority of revenue through advertising services for companies in search of enhancing website traffic.

SEARCH ENGINE OPTIMIZATION (SEO)
While Google AdWords and AdSense produce higher search results with a Google search result, there are organic means to similar results without spending money. Search engine optimization is a strategy to naturally increase the visibility and traffic of a website in a search engine.

SEO specialists must consider how search engines operate, keywords in a page's URL, and how consumers search. Incorporating a variety of SEO strategies to support a website can generate higher ranks in popular search engines resulting in increased traffic. Due to Google’s robust market share in search engines, advertisers customize their SEO efforts to Google’s search algorithms.

While optimizing a website for SEO isn't easy, companies may outsource their needs to firms that specialize in SEO. Typically, an SEO firm will analyze and audit features of a website such as keywords, Google Analytics reports and links. In order to optimize a website, an overhaul of coding, link building and a website redesign may be needed to create fresh content. As digital advertising and marketing strategies continue to develop, it has been suggested that search engine optimization may not always work in obtaining the highest search results.

SOCIAL MEDIA MARKETING
Success in internet advertising can be easily measured by the amount of website traffic a company generates. Social media encompasses tools which globally connect individuals to create and share information and experiences; not coincidentally, social media can be a huge driver of website traffic.

Though Facebook (FB) is often thought as the preeminent social media platform, there are many social media companies, both public and private, including Twitter (TWTR) and Instagram to name only the next largest two. (Instagram is owned by Facebook.) Due to the nature of social media, consumers are constantly connected with each other, and as a result advertisers can attract a larger audience with a relatively low-cost tweet, Facebook post or Instagram picture.

Social media marketing can be measured by impressions or engagement. Impressions measure the number of times an advertisement is seen even if it is not clicked. Marketers also measure the level of engagement between consumers and businesses. Engagement is a strategy in which consumers post new content and conversations within social media to drive website traffic and noise. As Millennials are deeply immersed in social media, advertisers believe that social media marketing is the most effective digital channel.

MOBILE ADVERTISING
Over the past 10 years, mobile technology has made vast gains in innovation, design and service. It is Pew estimates that 90 percent of American adults own a mobile phone, and 58 percent of them own a smartphone as of 2014. As a result, mobile advertising has rapidly grown to the most effective channel in reaching a large audiences.

Mobile advertising is a form of advertising via smartphones including advertising formats such as display, video, social and search. Display and Video advertisements encompass advertisements located on websites. Display advertisements take the form of banners; whereas video advertisements are pre rolled ads and often reformat TV commercials. It is reported that mobile advertising is growing much faster than all other forms of digital advertisements with search and social media at the forefront of revenue. 

THE BOTTOM LINE
Ubiquitous internet access has enabled new advertising and marketing strategies to reach consumers. Google AdWords and AdSense create opportunities for companies to increase search rank at a cost. In conjunction with Google’s advertising programs, companies can increase web presence through search engine optimization, social media marketing, mobile advertising, and content marketing. Measuring success of internet advertisements can be done through search and web analytics which quantify a number of features including impressions and engagements. The development and sophistication of online marketing has proven to be quite successful with internet ad revenue exceeding $42.8 billion in 2013, marking a 17%  increase over the year prior.

US mobile ad spend profile

Taken from Business Insider's article

Mobile Advertising Is Exploding And Will Grow Much Faster Than All Other Digital Ad Categories
MARK HOELZEL DEC. 22, 2014

Mobile is growing faster than all other digital advertising formats in the US, as advertisers begin allocating dollars to catch the eyes of a growing class of “mobile-first” users.

Historically, there has been a big disparity between the amount of time people actually spend on their smartphones and tablets (significant and growing), and the amount of ad money spent on the medium (still tiny).

But BI Intelligence expects that this gap will narrow substantially, as enthusiasm grows for mobile-optimized ad formats (such as interactive rich media and native ads), as targeting improves, and more and more advertisers learn how to effectively use the platform.

New data from BI Intelligence finds that US mobile ad spend will top nearly $42 billion in 2018, rising by a five-year CAGR of 43% from 2013.

Here are some of the key takeaways:

Display and video will be the fastest-growing mobile ad formats as digital ad dollars quickly shift from desktop to mobile, and ad products improve. US mobile display and mobile video ad revenues will grow at an astonishing CAGR of 96% and 73%, respectively, between 2013 and 2018.

But search and social media will still account for the largest share of  US mobile ad revenue during the forecast period. Search is a strong format on mobile because of its convergence with local-mobile targeting.

Mobile programmatic ad revenues, including ads sold through real-time bidding (RTB), will account for 43% of US mobile display-related ad revenue in 2018, up from only a 6% share in 2013. But programmatic will still be limited by the lack of robust cookie-based targeting on mobile (Red: maybe it could enhance with mobile subscriber profile from operator?).

In-app mobile ads perform much better than mobile web ads, and ad spend will likely follow performance and usage. In-app click-through rates averaged 0.56% globally compared to 0.23% for mobile web ads during the first half of the year, according to Medialets.