The advertising world revolves around programmatic. Some even speak of an »Advertising Armageddon«. But advertisers shouldn’t rush to throw their marketing lessons overboard in digital advertising, and focus first and foremost on the user. Although data driven concepts make advertising more precise, they also demand that advertisers go the extra mile for better results.
The great promise of programmatic advertising is less wastage and a context-specific approach to reaching individual users. Thanks to data driven models, advertisers can concentrate exclusively on specific target groups and their needs and adjust their campaigns accordingly. The days of the scattergun approach to advertising are finally numbered. At least that’s the theory.
In practice, it appears that many advertisers don’t fully exploit the possibilities of programmatic advertising and merely view it as a tool that can save advertising costs through new technologies and automation. This overlooks the potential of programmatic advertising to implement a concept that marketing programs have been teaching us for years: to use facts and insights to customize advertising for individual user groups.
The Key to Targeting Users is Data, Data, Data
Many advertisers are in the process of wrapping up their experimentation phase in programmatic advertising. The idea of using data and algorithms to target customers more effectively and precisely has become well established among most advertisers. However, an intelligent approach, clear messages and stronger customer segmentation require new skills that many advertisers have to work on first.
Those who’ve conducted their ad campaigns through traditional advertising agencies up to now are used to working with relatively broad target group definitions. But programmatic advertising makes it possible to tailor advertising efforts in a way that is scalable and can be used to send a customized message to individual users through the appropriate channel at a specific time. There’s no way around it: marketers must dig deep into their customer data to gain insights into the behavior of their target audience and incorporate these insights into their campaigns on an ongoing basis.
Algorithms Are Clever Helpers – Nothing More
Once advertisers get a handle on data management, they often experience another “aha” moment: the popular belief that algorithms not only automate advertising but also make it less expensive is a huge misconception. Media outlets that can withstand the current pressure to consolidate will continue to demand high prices for good ad space. Although technology-based advertising strategies render many administrative tasks unnecessary, the general effort required tends to remain the same as new tasks, such as data analysis, offset the decrease in manual tasks.
So overall, advertising isn’t becoming any less involved. But a better approach allows advertisers to focus on their target group with more precision, avoid waste coverage and achieve a higher return on their advertising investment in the long term. While programmatic advertising doesn’t make ads any cheaper, advertisers who do their homework when it comes to data and keep a constant eye on the user experience will achieve significantly better results with their applied advertising budget.
The bottom line: programmatic advertising allows for the precise targeting of individual user groups with clear, customized advertising messages. The key to success lies in the consistent use of data. The new core tasks for advertisers are collecting, analyzing and integrating data into ongoing campaigns. While this doesn’t make advertising less expensive, it will certainly make it better.