3. 3
INDEX
Introduction...................................................................................................................................................5
1. And Then, There Was Programmatic!....................................................................................................6
A. The Struggles of Mobile Advertising a guest post by Paul Francis of the BHW Group.................7
B. But, What Exactly Is Programmatic?! By Diksha Sahni ...............................................................8
C. Why Programmatic Advertising Is A Game Changer For Mobile Advertising....................................9
D. The Programmatic Ecosystem....................................................................................................10
2. Types Of Programmatic Media Buying................................................................................................12
A. Real Time Bidding Open Auction: Process And Pricing by Diksha Sahni...................................13
B. Private Marketplaces: Welcome To The VIP Club by Diksha Sahni............................................16
C. Programmatic Direct: The Handshake Goes Automated by Diksha Sahni.........................................18
3. Data: The Oxygen For Programmatic Success...................................................................................22
A. How To Leverage First, Second And Third-Party Data In Mobile................................................23
B. Deterministic Vs. Probabilistic Data Tracking..............................................................................24
4. Programmatic For Advertisers: Tips You Can Use...............................................................................26
A. Insider Tips to Optimize The Performance Of Mobile RTB Campaigns by Ermanna Maiuri.......27
B. 3 AdTech Horror Stories And What You Can Learn From Them by Kanika Upadhyay...............29
C. Why Future Mobile Programmatic Needs To Combine Art With Science by Tim Koschella............31
Conclusion..................................................................................................................................................35
5. 5
Introduction
The digital advertising industry, and especially mobile advertising, has evolved at a rapid pace in the last
couple of years, and much of that evolution has been towards programmatic. Programmatic advertising, i.e.
the automated buy of media placements, has gone mainstream in the last few years, replacing traditional
ad-space sells for mobile websites and mobile apps. Jimmy Kimmel once famously called programmatic
as the “gluten” of advertising: much like gluten became a buzzword for the food industry, programmatic has
been a buzzword for mobile ad tech.
All studies confirm the trend that programmatic media buying, in mobile in particular, is soaring. Advertisers,
increasingly, are buying ad spots via automated technology or programmatic, without depending on
humans to carry out the campaigns. Mobile is already there and we are looking at an all-encompassing
programmatic future that even includes TV ads.
However, despite all the buzz around programmatic, there is still confusion around what the term means
and implies. Few know what it stands for, and even fewer know how to use it for media buying.
This eBook aims to provide a comprehensive understanding of what programmatic is and how advertisers
can use it to make the most of their campaigns. After covering the basics of programmatic, we’ll look at the
various ways mobile media can be bought through automated solutions. We’ll then dive into ways data, and
advertiser data in particular, can be leveraged for improved campaign performance. Finally, we’ll hand out
some tips and best practices on programmatic media buying, including three real-life adtech horror stories
all programmatic media buyers can relate to!
6. 6
“And Then, There
Was Programmatic!”
Let’s start by exploring why mobile advertising is different from other traditional forms of advertising: what is
programmatic media buying and why does it hold promise for mobile advertisers over traditional ads? Let’s
also take a quick look over the programmatic ecosystem and who its various players are.
7. 7
A.The Struggles
of Mobile
Advertising
Many websites, including mobile websites and apps, rely on ad revenue
to stay afloat. These publishers range from big players, like Google and
Facebook, to many smaller single-developer passion-project websites.
Prior to mobile, these sites had an easier time generating views and
clicks for their advertisements. They had more screen space to play
with and there were established best-practices for ad placement. Now
mobile traffic has eclipsed desktop/laptop traffic.
Traditional web advertising is very similar to TV advertising. When
placing a “spot”, you consider how many viewers the show has and what
their demographics are. You then buy an ad that runs during that show
and it gets beamed out to all of its viewers. This approach is limited in
that it always has waste. Traditional web and mobile advertising did the
same thing. They would look at a website and see how much traffic it
had and what a typical visitor looked like. If it was a decent match, they
would buy an ad. Same approach, same amount of waste. All of these
issues are compounded by the fact that mobile traffic is now greater
than desktop traffic.
There are several things that make advertising on mobile significantly
more difficult than on full-size websites. Here are a few things to consider:
Screen space - Mobile websites tend to be very vertical and have one
sections on top of another for an entire page. Alternatively, some mobile
sites and mobile apps have a floating ad at the top or bottom. Users have
grown quite accustomed to ignoring this portion of the screen entirely.
Fewer ads - Smaller screens means fewer ads per page. Having more
ads is not always the smart approach, but if you are forced to have
fewer, you really need to optimize your click-through rates.
Newer platform - Web advertisers have had years to improve their
approaches. Mobile is a newer platform and we are still learning how
to best leverage it. Simply taking the web approach and applying it to
mobile is a recipe for failure.
Programmatic advertising is an approach that attempts to eliminate this
waste. Rather than tailoring an ad for a site or a show, it is tailored for an
individual. Have you ever wondered why you see ad for hotels in the city
right after you just searched a flight for that place? Or when you shop for
a product and keep seeing the ad for it in other apps or websites? That’s
all programmatic at work.
(This is a guest post by Paul Francis, a Developer Advocate at The BHW Group.
He works with clients on custom mobile apps and web-based solutions.)
8. 8
Programmatic advertising, in simple terms, is using automated
technology for media buying, as opposed to traditional (often manual and
tedious) methods of digital advertising. The traditional process of digital
advertising is particularly slow and depends a lot on manual processing.
A typical process involves several request for proposals (RFPs), human
negotiations and manual insertions of orders (IOs), making it rather
slow and inefficient when dealing with hundreds of thousands of orders
at a time. With traditional advertising, ads are purchased in bulk and
advertisers have little control over the ad inventory they buy, thereby
also limiting the optimization of the campaign to reach the right audience.
The ads placed as such target a site, rather than an individual.
With the arrival of programmatic technology, the digital ad-space
ecosystem is fundamentally different. Using programmatic, advertisers
can target individuals utilizing data to serve ads that are relevant to them
and speed up the buying and selling process. Using audience insights,
advertisers can reach out to the right person, at the right time, in the
right context and, most importantly, at the right price.
The growth of programmatic has been particularly notable in the U.S.
market, and eMarketer predicts that the spending in programmatic is
expected to reach $20.41 billion or 63% of the total U.S. digital display
ad spending.
B. But, What
Exactly Is
Programmatic?!
9. 9
Marketers are beginning to realize that programmatic buying holds even
more promise for mobile advertisers than it does for traditional ads.
More efficient processes
Programmatic media buying is more efficient than its traditional
cousin on a number of counts. First, it eliminates human error and
delay – you don’t have to wait for somebody to get back from lunch
to place your order! Second, it makes your campaigns more effective
by using an extremely fine level of segmentation to interact with
consumers on a personal level. Finally, it lets marketers manage
campaigns across multiple devices and multiple channels from a
single dashboard.
Optimization of prime media inventory
Marketers have access to a vast amount of media inventory.
Programmatic buying has improved verification and fraud detection,
making campaigns more cost-effective. But the real value of
programmatic marketing when it comes to inventory is that it allows
marketers to buy exactly the right spot, in exactly the right time, on
exactly the right device, for exactly the right customer. Traditional
media buying could never achieve that level of segmentation. Mobile
advertisers can capitalize on it even further with geolocation and
insight into the apps consumers are using at a particular moment in a
particular place.
Ability to buy in real time
One of the most exciting benefits of programmatic buying is immediacy.
Instead of planning media purchases in advance, the automated
processes involved in programmatic buying make it possible to
buy in the moment, depending on what’s happening around any
particular customer and what device they’re on. For example, if you
know your customers watch a particular TV show, and you see that
they’re tweeting about it during the season finale, you can pop up
an ad on the device they’re using to tweet. Nike’s Phenomenal Shot
campaign is another great example. Viewers received ads based
on notable sports moments just seconds after they happened. And
mobile presents the chance to make these hyper-relevant ads even
more engaging. In the Phenomenal Shot campaign, for instance,
mobile viewers could tilt their phones for a 3D view of Neymar Jr.
making a goal and they could do it within 10 seconds of the real event.
Another promising possibility is point-of-sale targeting, reaching out
to customers already immersed in the buying process with coupons,
discounts, or other special offers.
C. Why
Programmatic
Advertising Is
An Absolute
Game Changer
For Mobile
Advertising
10. 10
Social sharing
Programmatic buying extends its reach even further through social
sharing. Customers don’t just interact with a brand; they share that
interaction socially. This works especially well for ads delivered during
real-time events, a key benefit for mobile advertiser.
Cross-platform integration
Before programmatic media buying, your investment in a display ad
would be wasted if the viewer had to get up and leave. Now, however,
advertisers have the opportunity to reengage that viewer on his mobile
device, and that retargeting takes only seconds.
DSP - Demand Side Platform
DSPs enable advertisers to purchase ad inventory via RTB exchanges.
It is a platform for buyers to work with multiple ad exchanges, allowing
them to buy from multiple sources of inventory through one source.
For advertisers, it is the interface which allows them to manage their
bids, create targeting criteria, aggregate all their user siloed data, do
retargeting, optimize their campaigns in real-time, and have access to
the data from DMPs.
SSP - Supply Side Platform
SSPs are equivalent to DSPs, but on the publisher’s side. SSPs enable
publishers to gain access to multiple ad exchanges, ad networks,
and DSPs all at once, increasing the range of potential buyers. This
technology platform has one single mission of enabling publishers to
manage their advertising impression inventory and maximize revenue
from digital media.
D. The
Programmatic
Ecosystem
11. 11
DMP - Data Management Platform
DMPs are platforms that take data from different data providers and
manage it in an organized and meaningful way, so that DSPs can
make the best use of it on behalf of their advertisers.
Ad Exchanges
Marketplaces where advertisers and publishers buy and sell ad
space programmatically. An ad exchange is pretty much a giant pool
of impressions that allows for advertisers to bid on each impression
based on specific targeting criteria in real-time. This allows for the
advertiser to make sure each ad they are serving is being served to
the right person at the right place at the right time.
Trading Desks
Media buying and reselling tool of major advertising agencies, a
mix of people and technology. Agencies are usually buying media
programmatically and using technology like DSPs and DMPs. Trading
desks are known for their relative intransparency, because buyers
never get to know exactly which price the trading desk paid for the
advertisement placements on the DSPs they’re connected with.
12. 12
“Types Of
Programmatic Media
Buying”
In the upcoming pages, we take you through the different ways in which advertisers can trade media
programmatically - be it through OpenAuction or RTB, within Private Marketplaces or through Programmatic
Direct.
13. 13
A. Real Time
Bidding (RTB)
Or Open
Auction: The
Process And
Pricing
One of the most misunderstood concepts in programmatic is the RTB
process, which is often confused to being synonymous with what
programmatic stands for. RTB is a type of programmatic buying where
the buying and selling of online ad impressions is done in real time for
the transacting of one single impression at a time. This happens in
milliseconds, on average around 200 milliseconds to be precise, before
a page loads.
200 Milliseconds: Life Of A RTB Auction
The life of a RTB auction is approximately under 200 milliseconds, that
is from the start when a bid request is placed to finally when an ad is
served. Now compare that with the average time it takes for an human
eye to blink (300 milliseconds) and you will realize all that complex
mechanism is happening even before a blink of an eye!
Let us start with a user X who visits a publisher’s mobile web page or app.
As soon as X visits this web page or app, a bid request is triggered, and
unique information about the user such as the device type, IP address,
operating system etc. is made available when the latter accesses
a publisher’s app or web page. Publishers make their impressions
available through an ad exchange, which then pings all the participating
ad vendors for bids on the ad impressions that are about to be served.
The advertisers use DSPs to acquire information about the visiting user
and to look at the bid request. First- and third-party data help advertisers
evaluate whether the user is part of their target audience, based on
which the DSPs bid to buy ad impressions in real time.
Depending on the information about the user, the advertisers can
manage their campaigns and decide the value of bid -- they may choose
to set a higher bid value if they think that user is highly relevant to their
ad. Once a bid value is determined, the DSPs look into all the campaigns
14. 14
the advertisers are running to see which one best matches the user. The
DSPs, on behalf of the bidders, place sealed bids against other bidders,
and the highest bidder wins the auction, getting to place their ad on the
publisher’s mobile web page or app. This process starts each time a
user opens a new mobile page or an app.
The RTB Price Mechanism: First versus Second Price
Unlike the traditional model of media buying, which works on bulk
buying ad impressions, in RTB, an open auction defines the inventory
prices for every single impression, in real time. Typically, there are two
types of price mechanisms -- the first-price auction and the second-price
auction. However, Open RTB auctions generally work on the second-
price model.
15. 15
In a first-price auction, the winner is the bidder offering the highest price
and auction is cleared based on the highest price offered. For instance,
advertiserAbids $1, advertiser B bids $1.50 and advertiser C bids $2.00.
The highest bid not only determines the winner (in this case advertiser
C), but also the price at which the auction is cleared - $2.00. While a
first price auction mechanism gives publishers the highest CPMs for
impressions won, in an open auction environment it can create a price
inflation, forcing bidders to guesstimate if the competition will bid and
what they will bid. Hence, it is suitable for a low demand environment,
more commonly used for a private auction.
In case of second price auctions, the winner is the bidder offering the
highest price, but the auction is cleared on the basis of the highest
bidder paying fractionally more than the second-highest price offered,
the exact value of which depends on the platform. To explain this, again
let us take the example of three advertisers A, B and C and their bids.
Just as above, advertiser C is the winning bidder, but the auction will be
cleared at the second highest bidder price plus a small fee, generally
one cent -- $1.50+fee.
In an Open RTB system, which is a highly competitive environment, a
second price auction model lets buyers bid aggressively and honestly
for what they are willing to give for a particular inventory, knowing they
won’t overpay. It also equips them with a comfort to bid with confidence
without the fear of overshooting the mark or paying double to what the
competition is offering. By only having to pay a few cents over the closest
competitor‘s bid, it helps maintain a pricing efficiency, transparency, and
an efficient marketplace for yield optimization.
However, when the gap between a bid and the second bid is significant,
it may create a gap between potential revenues and actual revenues
for a publisher. Often, to create an equilibrium, publishers may set floor
pricing, known as hard floor price and soft floor price.Ahard floor price is
the minimum price that the publisher will accept, whereas soft floor price
let’s publishers have greater flexibility for their inventory. Bids above the
soft floor price are treated as second price auction, and those below it
are treated as first price auction. The advertisers or DSPs normally do
not know what the floor price is, unless they directly contact the SSPs or
the publishers. It is critical for publishers to be aware of what the value
of their inventory is and setting floor prices as either high or low can
ultimately have an impact on the revenue.
16. 16
Private Marketplaces, or PMPs, are invite-only marketplaces that
allow high-caliber publishers to set aside certain ad inventory
packages and sell them to a select buyer or group of buyers
through a private auction mechanism, transacted through Deal IDs.
Deal IDs can be understood as a unique code that is generated to
represent the negotiated terms of the deal between the buyer and
the seller.
In comparison to open auctions, PMPs give publisher tighter control
on what kind of buyers they allow to display on their web page or
app, without having to negotiate with each advertiser directly. PMPs
have evolved into a format that offers advertisers to test waters in a
controlled marketplace environment, before they dive into an open
auction system. As a middle ground between open auctions and
direct deals, PMPs are also preferred by advertisers who want to gain
access to premium inventories before it is made available for open
auctions.
Although PMPs are relatively new, the spending on such kind of
media buying is expected to reach $3.31 billion by the end of 2016,
according to eMarketer. A reason for this is primarily because it offers
transparency to both advertisers and publishers on the inventory
available and the CPMs. The latter are more competitive because
premium advertisers compete for the highest quality ad inventory on
highly reputable publishers’ platforms, combining it with the efficiencies
of programmatic technology.
For buyers as well as publishers trying to get into a PMP deal, it is
important to understand what they are trying to achieve through such a
model of media buying to ensure ROI. To understand whether it is the
right channel to transact, the Interactive Advertising Bureau (IAB) has
put down the three below mentioned points as a checklist:
1. Consideration: Determine if a PMP is an appropriate approach to
generate ROI by comparing the buyer’s needs and target audience
with the capabilities and audience of the publisher.
2. Activation: Once it has been established that a PMP is the right
way to go, ensure that buyers and sellers agree on terms such as
inventory, finances, parties involved, etc.
3. Troubleshooting: Identify common issues that may arise once the
PMP is set up.
The terms of private marketplaces can vary, allowing buyers to choose
how they want to buy media under a PMP ecosystem. There are mainly
two types of setup:
B. Private
Marketplaces:
Welcome To
The VIP Club
17. 17
Pre-Negotiated or Preferred Deals
Private Marketplaces work with a Deal ID, however, simply having a
Deal ID doesn‘t put you on top of the “waterfall”. In case of PMP deals,
the buyer and seller can choose to strike a “first look” or a “right of first
refusal”.
“First look” means that a publisher can give priority access to the buyers
to buy the inventory, before it is sold off in an open auction. This is a
great opportunity for buyers to first get their hands on premium inventory.
However, for buyers, it is important to understand and have clarity on what
the “first look” entails - is it available on all inventory or only on remnant
impressions? „Right of first refusal“ is a contractual business obligation
under which the advertisers get to have a first say on an inventory when
it becomes available and before it is offered to other parties.
Preferred deals on the above criterion are executed privately with one
buyer and one seller at a fixed, pre-negotiated price (usually a fixed
CPM basis) before the inventory goes in an open auction.
PMP deals executed as such can be beneficial to both publishers
as well as to buyers. For publishers, it means a higher yield for their
inventories, while buyers are able to choose the best placement that
can work in favor of their ROI.
If you do not have the first look, it is important to understand where
you stand in the waterfall and, based on this, discuss the terms of the
deal such as CPM etc, as it will have a great impact on your campaign.
18. 18
Private Invite-Only Auctions
Private auctions are invite-only auctions for specific buyers to
participate in when publishers can open their non-guaranteed
inventory. Private invite-only auctions also call for a Deal ID to be
set up, but are only limited to bidding with a particular bid response
rather than competing in an open auction. However, similar to open
auctions, private invite-only auctions are cleared on a second-price
basis for the winning bidder.
Publishers establish a minimum floor price with the advertisers,
allowing a small set of buyers to participate in a private auction. In
case of private auction PMPs, the floor prices are set higher than
those in open auction. If none of the buyers take the inventory, it goes
to an open auction.
The traditional concept of advertising works as a close relationship
between advertisers and publishers. Many brand advertisers consider
that relationship as sacrosanct. However, as intimate as they may be,
traditional direct deals cannot offer the scale, speed and efficiency of
programmatic, as they rely on raising RFPs, human negotiations and
manually inserting the orders, which makes for a slow and inefficient
process, especially when dealing with hundreds of thousands of
orders at a time.
As the switch to mobile more and more advertisers started replacing
traditional media buying with programmatic. Brand advertisers,
particularly those with big budgets, however, shied away for long
from programmatic (largely open RTB) due to its lack of guarantee of
inventory and premium ad spots. Many also mistakenly believed that
RTB was only used for remnant inventory and kept themselves away
from trying programmatic for fears of brand safety.
With Programmatic Direct, these advertisers can test the waters of
programmatic, without having to let go of their one-to-one relationships
with the publishers. Here’s how Programmatic Direct can convince the
most brand-conscious advertisers to embrace automation.
C. Programmatic
Direct:
Automating
The Handshake
Between
Advertisers And
Publishers
19. 19
Closely mirroring the traditional concept of direct buying, Programmatic
Direct is negotiated directly between buyer and seller, with fixed
inventory and price. However, it is differentiated from the traditional
buys as the RFPs and campaign tracking are done programmatically,
i.e is automated.This route is preferred by companies who want to focus
on their brand safety and wish to get a premium spot on a preferred
publisher’s webpage or app. For example, a medical pharmaceutical
giant would prefer to place ads on a health website because the latter
already has the right audience for it. Or, a premium sports brand would
target a sports web page or app during a peak game season as they
know they can find highly relevant audience for their messaging there.
For this, a direct buy route would offer them their preferred ad spots,
which isn’t possible through an open auction.
20. 20
Programmatic Direct can be accessed in two different ways, depending
on how the inventory is made available.
This flow chart above helps us understand the two different ways in
which Programmatic Direct works. We have understood that under
Programmatic Direct, inventory isn’t auctioned. However, another
important question that advertisers need to ask themselves is whether
the inventory is guaranteed or not, i.e, reserved or unreserved inventory.
Programmatic Guaranteed or Automated Guaranteed refers to a setup
where the inventory is guaranteed or reserved. The advertiser and
publisher fix the terms of the deal and commit to both the CPM price
as well the inventory scale. This way, advertisers are able to book
selected premium inventory to ensure they get the scale as well as the
placement they want for their campaigns. However, this often entails a
higher cost, which may put the advertiser’s ROI at risk.
Conversely, when the inventory price is fixed, but the inventory amount
is not guaranteed, it is referred to as “Unreserved Programmatic
Direct.” Relying on a bid-ask protocol to execute the deal, it functions
in a similar way as a Private Marketplace, with advertisers getting a
“First Look” or a “Right of First Refusal”. A Deal ID is issued to transact
such bid requests at the terms and price that were pre-negotiated
one-to-one between the advertiser and the publisher, and unique to
each buyer.
21. 21
Not Only for Brand Advertisers
As much as Programmatic Direct is suited for brand-conscious
advertisers, it is also a viable option for performance-based advertisers,
who are looking for quality-driven installs beyond the impression. With
Programmatic Direct, they can guarantee a price and volume on a
inventory that is performing for them. However, the challenge remains
how publishers and advertisers can find a balance, as the former
look for higher eCPMs while the latter want to keep prices down. The
success of Programmatic Direct for such advertisers will depend on
how both the parties can work together, keeping their goals in mind.
Looking Ahead
eMarketer predicts an exponential growth in deals made via
Programmatic Direct in the coming years. From 2014, when deals made
via this route only accounted for 8% of the total programmatic spent
in the U.S., it is expected to reach 42% in 2016. Programmatic Direct
is still at a nascent stage and brings a promise to those in the industry
who have been anxious of trying out RTB. For premium advertisers,
Programmatic Direct offers the benefits of programmatic without
compromising on the traditional sacrosanct handshake between the
advertisers and publishers. Until today however, there has been quite
some confusion over a consistent definition of Programmatic Direct,
and an industry standard is needed as we move into the future. It will
be interesting to see how this branch of programmatic evolves as we
move into an all-encompassing programmatic future.
22. 22
“Data: The Oxygen
For Programmatic
Success”
In this section, learn the difference between various types of data and how it can be leveraged for improved
campaign performance.
23. 23
A. How To
Leverage
First, Second
& Third-Party
Data In Mobile
Marketing?
When managing an advertising campaign for the mobile realm, it’s
important to know the differences between types of data and how you
can best leverage them for your needs. Here are just a few insight on
the various kinds of data, and why each is potentially valuable to your
marketing efforts.
First-Party Data: Generally the Most Valuable
First-party data is data which you have collected about your customers
yourself, and it is usually the most desirable type. It can be demographic
data provided by your users themselves, or behavioral data that your
collect. For example, it may come in the form of website visits on a
mobile device or interactions on a Facebook page.
After gathering first-party data, you for instance could tweak an
advertising campaign so it more accurately reflects your customers’
needs and wants. First-party data also enables targeting of returning
customers. By creating calls to action based on things people have
bought in the past, you can deliver a highly customized shopping
experience that suggests what they’re most likely to buy.
Second-Party Data: The Data that Comes Along the Way
You can get second-party data through a direct relationship with another
entity or simply through media buys.
Second-party data is any data that gets relayed along the media buying
activities, such as the user device model, the location of the user, the OS
version they use, or the application or mobile website the ad opportunity
is available on. This data is sometimes the most valuable for a mobile
marketer to use for segmenting audiences into targeting categories.
For example, if you are a mobile marketer offering a product suitable for
tech-savvy, early adopters, second-party data helps you target those
early adopters by targeting your campaigns to the most high end devices
with the most latest OS version, making your marketing campaign more
effective by focusing your message to relevant audiences.
Third-Party Data: Collected by Specialty Companies
Third-party data is purchased on a massive scale from data
management platforms (DMPs) and then sold to marketers and
businesses. BlueKai, eXelate, Peer39, and Nielsen are just a few of
the most prolific companies that collect, store, sort, and sell third-party
data, also known as data aggregators.
24. 24
The key benefit of DMP offerings is the broad and expansive amount of
data that is available. It is also useful for targeting based on consumer
behavior and demographics. Marketers are able to analyze all types of
audience data to get more well-rounded insights into the effectiveness
of their campaigns, and can adjust their plans accordingly. One potential
drawback, however, is that third-party data isn’t provided on an exclusive
basis—other competing marketers can also purchase and access it.
Survey responses are one type of third-party data. By reviewing what
people said when answering survey questions about what their ideal
app would include, for example, you could build a mobile app that’s
almost solely driven by user feedback.
Having talked about the different types of data, we now take a look
at a different category split: deterministic and probabilistic data. Both
typologies are independent from each other, so that third-party data can
very well be deterministic or probabilistic.
The Gold Standard: Deterministic Data Tracking
Deterministic data (also called “first party data”) tracking has long
been considered the most accurate way of identifying consumers.
“Deterministic” refers to the analysis of data that is known to be true.
For example, when a customer makes an online purchase and inputs
information such as name, address, zip code, phone number, credit card
number, etc., that’s deterministic data. The next time a consumer logs in
with the user ID and password associated with that identifying information,
the brand can know with a high degree of certainty who that person is.
The New Benchmark: Probabilistic Data Tracking
Probabilistic data tracking, by definition, includes either unknowns,
or such a wide array of knowns that deterministic models lose their
accuracy. Weather forecasting is a common example of probabilistic
analysis. When a meteorologist forecasts a 60% chance of rain, it
means that, in the past, when the same conditions existed, it rained
60% of the time. However, even when the primary factors that determine
weather (things like temperature, cloud cover, wind speed and direction,
humidity, etc.) are the same, secondary factors like the amount of dust
in the air, the presence or strength of an El Niño, and any environmental
factors that have changed during the time the data was collected can
influence what actually happens at any particular time. That’s the real
difference between deterministic and probabilistic analysis.
B. Deterministic
Vs. Probabilistic
Data Tracking:
Which Is More
Effective?
25. 25
With deterministic data, the answer is the same every time: 2 + 2 = 4.
With probabilistic data, the results can be different based on a number
of factors that are either unknown or not included in the calculation: 2 +
x = y. If the value of x changes, the value of y changes. In other words,
probabilistic data is data which needs to be inferred with the help of
statistical analysis.
What Does That Have To Do With Programmatic Buying In
Mobile Advertising?
Programmatic buying programs can now gather non-permanent data
like cookies (on mobile web), device IDs, GPS locations, and operating
systems and use big data algorithms to make predictions about the
identity, and, more importantly, the predicted intent of the user. That’s
important, because it allows brands and advertisers to draw conclusions
about the identity of consumers before they log in to make a purchase. In
other words, if a consumer buys a new computer from his desktop, but
started the search on a mobile device, the brand will be able to capture
that data and use the insight it provides to make future programmatic buys.
What Are The Drawbacks To Probabilistic Data Tracking?
Traditionally, accuracy has been the primary concern. The assumption
has always been that deterministic data like login information provides
more certain identification than the types of data that are used in
probabilistic analysis. However, a recent Nielsen test put the accuracy
of identification using probabilistic data at 90% and up. Therefore,
accuracy is no longer a significant drawback, except in cases where
100% accuracy is truly needed. Affiliate marketing programs are a
good example: 100% accuracy in cross-device tracking is necessary
for properly crediting sales. For programmatic buying, however, the
accuracy is on par with deterministic data analysis and gives advertisers
the flexibility to include data from consumers who are too early in the
buying process to have logged in – which is the only way to capture truly
deterministic data.
How Important Is Cross-Device Tracking?
Very – and it’s only going to get more important as more traffic shifts
to mobile. Consider Facebook, an undisputed leader in cross-device
tracking: the social network currently tracks one billion users who log in
through multiple devices. Google and Twitter add hundreds of millions
of additional users who switch between different devices. In fact, as the
trend toward using multiple devices grows, the effectiveness of single-
device tracking will continue to decline.
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“Programmatic For
Advertisers: Tips You
Can Use“
Learn the tips and best practices on programmatic media buying, including lessons from three real-life
adtech horror stories that will sound very familiar to all programmatic media buyers!
27. 27
A. Insider
Tips To
Optimize The
Performance
Of Mobile RTB
Campaigns
So far, in this eBook, we have talked about the many benefits that
programmatic media buying offers over traditional ad sells for
mobile website and apps. But how can programmatic campaigns be
optimized to expand and improve the performance of your mobile RTB
campaigns?
Here are seven tips and levers you can act on when optimizing the
performance of mobile RTB campaigns.
Inventory Type
Needlesstosay,thefirstlevertoactonwhenoptimizingRTBcampaigns
is the the selection of the inventory type you bid on. For instance, apps
tend to perform better than mobile web as they offer a more engaging
environment for users. However, make sure to select the publishers
and formats to ensure that the ad sizes are adequate. By whitelisting,
you can minimize the learning curve by quickly discovering the best-
performing inventory placements and focus on buying efforts on those
publishers. The opposite goes for blacklisting: weed out the worst-
performing placements from the inventory you’re targeting.
Audience Targeting
Make the most of your programmatic campaigns by finding the
right audience, which in turn can help you avoid wasting undesired
impressions. While first-party data, i.e the data that you own about the
users, can provide you the information about the users, you can enrich
this by efficiently analyzing the second-party data (device type, OS etc)
and third-party data (coming from third-party providers, typically data
management platforms). By effectively making use of the information
about your users, you can make informed bidding decisions that will
define the potency of your campaigns.
Dayparting
Have you noticed why you see more food delivery ads during the
evening or on weekends as opposed to other times of the day or
week? That’s because consumer patterns suggest that people are
more likely to order food in evening after coming back from work, or
on weekends.
Selecting which time of the day and which day of the week your ad is
shown on mobile to follow usage patterns can pay off, especially on
mobile. By identifying key user behaviour, advertisers can serve them
the impressions at the time they are most keen to engage with the ad.
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Frequency capping
Frequency capping is a valuable tool to ensure that you avoid user
fatigue. By setting the frequency cap for the campaigns, i.e the number
of times the same ad can be shown to the user within a specific period of
time, you can ensure your content remains “fresh” for the audience. You
don’t want to annoy and push the user away by over pushing your ad.
The level of frequency capping depends on the stage your campaign is
at: Brand new campaigns with fresh creatives and broad targeting can
have frequency cap set to low, and as the campaign matures, those
caps can be increased. However, for retargeting campaigns, remember
to account for user fatigue right from the start of the campaign.
Geo Targeting and Geo-Fencing
The beauty of programmatic is in the way it allows advertisers to expand
the reach of their campaigns through many targeting capabilities.Agreat
way to optimize RTB campaigns is by leveraging mobile capacities such
as geo-targeting and geo-fencing. For instance, for a travel app it could
mean different creatives depending on where they advertise.
By efficiently learning to optimize campaigns, not only can advertisers
allow for greater targeting precision, but also eliminates inefficiency and
waste. Programmatic is changing the way mobile advertising functions,
and as the mobile ecosystem becomes more complex, only those who
understand the tricks of the trade can stay ahead in the game.
29. 29
AdTech has been evolving at an unbelievable pace and the innovations
around its various dimensions have been incredible. Yet there have
been some struggles and many AdTech horror stories! Our Head
of Ad Quality had her share of horror stories from her six years of
experience. Here, she tells it all!
Lesson #1 – Big Budget Is Not Always Might Or Right
Some time before AppLift, at the beginning of my stint in ad quality,
I was ecstatic each time my friends from the Sales teams got a big
budget campaign. I clearly recall a heavy budget campaign from a
known agency from somewhere around West Europe: the bells on
the floor rang, beer mugs clicked and plans were made for how the
big sales commission would be spent. It was a flashy JavaScript ad,
which had all the right notes, great images, sparks and blinks. After the
initial euphoria, the campaigns were set up and since it was our star
advertiser, we quickly approved the ads.
After the initial two days of basking in the glory of how happy our supply
partners were and how well we were spending, the horror began….
The third day started with multiple emails from all channels sending
us screenshots and clippings from various users, media, publishers
and, last but not least, my manager. Amidst the whole frenzy, it took
me a while to realize that our ‘star’ advertiser was a shady agency
redirecting their JS ads onto a pornographic website. The placements
of these ads were on our premium inventory and hence the damage
was huge. One of the key placements where these ads were served
was a military website of a South Asian country; I can only resort to
my imagination to understand what a high ranking military official went
through: claims to the best and brights and pleas to the nation’s youth
to join the forces, followed by a pole dancer in skimpy clothes towards
the end of the page. Horrendous.
My first lesson learnt: big budget does not always mean ‘star’advertiser.
Lesson #2 – Check, Check and Re-Check Until You Are
Sure
During one of my previous startup experiences, we suddenly realized
the need to scale up our team. Work was pouring in from everywhere
and approvals for new human resources became a priority. I scheduled
quick interviews and we soon hired a small battery of people. Their
trainings and induction was completed like a breeze and we were a
sizable number in the Ad Operations team.
B. 3 AdTech
Horror Stories
And What You
Can Learn From
Them: Lessons
From A Quality
Operations
Manager
30. 30
Work resumed and soon the new joiners started approving and
reviewing ads independently. In the rush to prove ourselves, we also
promoted senior ad quality resources to other teams. The review
process was trimmed and we eliminated the sample checks and
reduced the frequency of audits of campaigns. Unexpectedly, a giant
e-Commerce advertiser acted up, as their campaign to promote a
specific ‘new year sale’ did not serve at all. The deal had been made
much in advance and everyone had great hopes for this campaign.
At ungodly hours, we had to backtrack and understand what could
possibly have gone wrong. Every team was shaken up in the middle of
the night, ad serving and technical teams checked everything on their
end, from servers to traffic sources, etc.
We finally discovered that the ads were incorrectly tagged with an
irrelevant category by a newly hired ad quality executive. They were
supposed to be tagged as ‘Commerce’ but were mistakenly tagged
as ‘Contraceptive’ (in the huge list of categories in the drop down,
the latter was just below the former, hence the error). This resulted in
the ads being blocked on relevant sites and therefore the campaigns
failed to deliver. Since the whole concept was to promote the sale on
a particular day, there was nothing we could do.
Lesson learnt, the hard way: check, confirm and audit. It‘s worth
following the processes, have elaborate training and assessment
sessions, whatever effort it takes…
Lesson #3 – Technology Is the Means to an End, not the
End Itself
During yet another AdTech startup experience, as we received
additional work and had shorter turnaround time, I was keen to
incorporate newer tools and devices to automate and reduce our
efforts. Soon, we began a trial-and-error method of testing our
processes until we reached a combination of a few services and
tools which greatly helped in reducing our SLAs (Service Level
Agreement, here the minimum time we needed to approve an ad).
While some tools worked wonderfully, others failed miserably. Our
luck ran out when we could not judge which ones belonged to which
basket. We then bought a fancy software to help us flag a particular
format of unapproved ads, in this case ‘auto download’ ads. As the
name implies, these ads directly download a file on the user’s device
without their consent. At this time, these ads were all the rage in
China and South Korea, and many leading game developers swore
by their good conversion rates. In other regions, these ads were
less accepted and brand publishers completely disapproved their
autonomous behavior.
31. 31
We started using the new tool immediately after a botched due
diligence, as we discontinued our older way of testing these ads
manually. As you must have guessed by now, we soon got blocked
by our branded supply partner, in this case a leading news app from
the US. Their policy clearly mentioned that they did not accept auto
downloads, considered them very bad for the user experience, and
held them as a threat to user’s device (there were random cases
reported earlier where a malware was auto downloaded corrupting the
mobile device due to such ads). We found out that our new tool came
with limited bandwidth. Once we reached the threshold, we could
enter the URLs of the tags but they would not be tested and hence
not be flagged. This was a huge bug in the tool and we raised it with
the vendors in parallel. The terms of violation were clear and we paid
a huge penalty for the damage to our partner (much more than we had
anticipated to have spent with them).
Lesson learnt, the harder way again…
The way some tell it, performance marketing is well on its way to
a completely automated and algorithm driven state, with no room
(or necessity) for humans at all. This doomsayer approach to the
advertising professional’s role in the future may be a contributing
factor in the slow growth of programmatic. After all, who wants to
support the technology that may eventually put them out of a job?
However, there is an alternative and far more likely scenario: a near
future in which scientific and artistic elements come into balance
not across teams or entire companies, but within the advertising
professionals themselves.
There are three key reasons why systems and algorithms will not
entirely take over the advertising world replacing human labor. The
first is increased automation in ad delivery, which is driving efficiencies
that have largely negated human labor in ad tech. However, we can
expect demand for differentiation and creativity in storytelling to
grow. Companies are generating ads and content to appear across
websites, social media networks, email and other channels and quite
often, that messaging is not the same. As ad tech further enables
precise, targeted ad delivery at scale, the need for human creativity
to feed those messages will grow, as creating ads for a variety of
audiences across multiple channels is more challenging and time
consuming.
Secondly, many have mischaracterized ads as a commodity, largely
C. Why Mobile
Programmatic
Needs to
Combine Art
with Science
32. 32
due to the fact that the mechanisms of RTB are quite similar to those
of a stock exchange. Add to that the trend of finance personnel
moving into ad tech and it’s easy to see how the waters were
muddied. However, more are realizing now that we can’t compare
finance markets with programmatic advertising, because despite the
similarities between ad buys and stock trades (and how prices are
set), each ad impression is unique. The context of the ad, time it’s
seen, brand recognition, audience traits and more all play into one
advertiser’s desire for that time slot over another’s. Ad tech has been
confused with a commodity-type market, but savvy advertisers are
moving beyond this misconception.
Finally, although we need machines to sort and parse and process the
massive volume of data we have at our disposal, the interpretation
of that data cannot be handed over to algorithms. The underlying
reasoning driving decisions and feeding parameters to the machines
must be human-driven, because machines simply don’t understand
how people think; they can’t interpret the content of ads, or user
reactions to them. The only entity that can create a valid link between
the people the ads are made for and the machines that deliver the ads
are other human beings.
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Conclusion
Programmatic is here, and it is here to stay. Programmatic media buying has moved beyond being just
an industry buzzword, and digital marketers as well as publishers are beginning to fully understand the
potential of programmatic campaigns, which are changing the way the ecosystem evolves.
For advertisers and publishers alike, programmatic holds more promise than traditional ads, as they begin
to see highly efficient campaigns resulting in a higher ROI. The industry has come a long way from 2008
when it took more than 30 steps just to get ad campaigns to go live on Yahoo!, and has moved to an era of
automation that allows buyers and sellers to engage in transactions in real time, and even optimize campaign
performance as they go along. Today, seeing the benefits of programmatic, even traditional corporations
are moving towards it. As the technology advances, more marketers are thinking of automating their media
buys, leveraging the power of programmatic to place ads across geographical locations and audiences.
2016 will be a year when we see programmatic being integrated across multiple platforms. We are already
increasingly seeing it being applied to video, especially on YouTube and Facebook, and a future that
includes programmatic TV doesn’t seem too far.
Programmatic is changing the way mobile advertising functions, and as the mobile ecosystem becomes
more complex, only those who understand the tricks of the trade can stay ahead in the game!
