Editor’s note: Eric Paquette is chief operating officer of Copernicus Marketing, Boston.
Programmatic buying and real-time bidding are powerful new tools that provide the promise of reaching the right audience with the right message at the right time. By leveraging data, marketers are able to define the audience that their ads will reach, deliver appropriate creative to those audiences, dictate what they are willing to spend for those audiences and measure the ROI of these efforts.
Given this, it is not surprising that marketers are increasingly embracing these tools. Programmatic ad spending is expected to top $15 billion this year and, by year’s end, it will make up over half of non-search digital ad spend in the U.S.
Programmatic is clearly a powerful tool for marketers. But, as Voltaire, Spiderman and a host of others have said, “With great power comes great responsibility.”
While it is easy to focus on the short-term response and return of a programmatic campaign, it is also critically important for marketers to remain focused on the overall brand strategy. The optimal short-term strategy is often not an optimal long-term brand strategy and in some cases can actually work to the detriment of the brand overall.
Given these dynamics, it is incumbent on marketers to clearly understand and consider the overall brand strategy when executing a programmatic campaign, including:
- who your brand’s target segments are and how they interact with your programmatic audiences;
- how various creative executions resonate with those target segments;
- how and why those segments respond (or don’t) to your programmatic advertising; and
- the short-term response, and the long-term brand effects of programmatic efforts.
Sometimes your best brand targets are not those that are most immediately responsive to digital advertising, and in these cases, you need to take great care in how you optimize programmatic efforts.
We work with a well-known restaurant chain that experiences exactly this phenomenon. They have an overall brand target that has a high propensity to fall in love with the brand and eat there frequently. There is tremendous value from a customer acquisition perspective in attracting members of this segment but because these current customers already frequent the establishment, there typically isn’t a frequency lift in response to a digital campaign.
They also have a secondary segment that uses the restaurant much more opportunistically, for very different reasons and with far less enthusiasm. This group is quite responsive to digital advertising. Digital ads serve as an effective reminder and clearly (and measurably) drive increased frequency for this segment.
The frequency lift is easily measured in the brand’s CRM system but customer acquisition is less obvious – a new customer needs to try the brand, subscribe to the loyalty program, then create enough data to be accurately categorized into the primary target. A narrowly focused optimized programmatic campaign might mistakenly focus exclusively on the secondary target.
Successful programmatic targeting efforts would focus on audiences that efficiently find these secondary targets, and creative would be optimized to drive response for this same secondary target. Unfortunately, the creative and messages that drive behavior of this secondary target are not the defining elements of the brand promise. And they are not the benefits that are most resonant with the brand’s best targets.
Followed blindly and taken to the extreme, the brand would run the risk of optimizing their campaigns away from their best customers and the fundamentals of their best brand positioning. They would drive short-term return at the significant expense of the overall brand positioning and equity.
So, how does a brand take advantage of programmatic and addressable advertising without putting the identity of the brand at risk?
- Develop a clear understanding of the market and the segments that are the brand’s best targets. Understand their wants and needs and how they currently buy and use your products. Use this knowledge in the creative development of your advertising.
- Connect the market segments, particularly your targets with the tools used to buy programmatic and addressable advertising. You can link the segments to third party marketing data that can be used to define programmatic audiences for advertising. By making this connection, you allow aim your programmatic buy more accurately toward the brand target as opposed to any potential random user or buyer.
- If your company has a robust source of first party big data like transaction data or loyalty data, be sure to connect the segments to that database. Doing so allows you to monitor the segment-specific response to different marketing activities. You can better understand which targets are more or less responsive to help refine your programmatic strategies and tactics.
- If you don’t have access to transaction or loyalty data, you can do the same (albeit on a smaller scale) with your MROC or traditional brand tracking.
- Finally, test the impact of your programmatic creative using brand-related measures. While the behavioral metrics from programmatic advertising are great, you also need to understand the impacts of that advertising from a brand perspective. Does the advertising enhance the brand image? Does it help to strengthen core elements of the positioning? Is it consistent with the brand essence and personality? Gone are the days when TV was used to build the brand and digital was used exclusively for conversion. Digital advertising plays a much larger role with consumers today and needs to be evaluated more broadly than simply using conversion metrics.
Fortunately, our earlier restaurant story has a happy ending. The brand’s marketing management has a clear understanding of their consumer segments, the behaviors of their best targets and other secondary targets and how this interacts with their programmatic advertising. Even more importantly, they have a clear brand strategy to guide their decisions. They are able to carefully balance the short- and long-term objectives, targeting audiences and using creative that effectively balances long-term brand building with short term response. Without that brand guide post, they easily could have optimized their way into marketing dead-end.