Advertising spend has traditionally been expensive but digital media buyers are able to cut costs by up to ten times the budget by understanding and efficiently using Programmatic Media Buying (PMB). Delivering a targeted message across all devices, the advertisement reaches the right audiences with the right messages at exactly the right time in the customer’s buying journey.
Programmatic marketing is the latest technology solution available to South African marketers. Already a $12 billion market globally, it is expected to reach $33 billion by 2017. With an outsized share of the pie, currently, 85% of US advertisers and 72% of publishers use programmatic strategies and its fast gaining ground in South Africa’s digital and mobile-connected landscape.
Shrewd marketers and media buyers use automation to track and trace a customer’s journey across South Africa’s multiple media channels. By combining all the data into one dashboard, programmatic provides a transparent view into an advertising campaign in real time. It allows for a more targeted analysis of data, dynamic creative adjustments and delivery of a more relevant conversation with the required audience.
So what does it mean for brand marketers? No wastage of brand budgets, more accountability of spend for chief marketing officers (CMO’s), and increased efficiency. Programmatic advertising technology removes the spreadsheets, manual insertion orders and menial tasks and makes the ad buying system more efficient and effective. It empowers brand managers to align organisational workflows to programmatic’s automation technology – capable of working faster than any human capabilities. This means marketers can spend more time planning and interacting with the client and creative departments towards more customised consumer campaigns. It allows creative teams time to focus on formulating more relevant and engaging campaigns for their target audiences.
What does it mean for consumers? Audiences are more likely to engage and respond at the moment of delivery when the message is most relevant to them. It serves direct response and branding because it targets the eyeballs and not the channel. It is a direct path with a relevant message.
What hasn’t changed within the branding landscape is that advertisers don’t want to waste money. The benefit is that they maintain direct control of the budget. Programmatic media buying holds budgets accountable and returns the highest amount of value possible. It exponentially increases and quantifies the chances of an advertisement being viewed by the right audiences to drive the sales return of a message. Back by full reporting, programmatic data delivers transparency of spend.
Programmatic marketing is recognised as a powerful tool for marketers to gain the most leverage from their marketing spend. However there still seems to be confusion in the market that it is merely real-time bidding (RTB).
“Programmatic buying is not the same as real-time bidding. Real time bidding is automated ad buying through real-time auctions,” explains Craig Utermark, CEO of Atmosphere Orange, one of the first digital media management companies to deliver a bespoke programmatic marketing service into the South African market. “Programmatic marketing automates the buying, placement and optimisation of advertising and delivers a higher ROI through digital platform efficiencies across Exchanges, trading desks, and Data Management Platforms (DMPs). It is a more far-reaching platform that performs more complex decision across a variety of systems, including website content management, email, call center enabled chat, mobile apps, and CRM systems.”
This means that media buyers have access to far more data than ever before as they reach wider and better targeted audiences. With the speed of sales generated by click-through and conversion rates, digital marketing allows demographic, behavioural and contextual targeting and remarketing to niche audiences. Constantly refining audience targeting means more metrics. With more metrics comes more measurement of cost per conversion (CPC), effective cost per thousand (CPM) and overall online reach and scaleability to support inbound marketing strategies and calculate the return on investment (ROI) of marketing efforts. Lead nurturing is one of the most powerful aspects of programmatic as it is capable of identifying exactly where people are in the sales journey.
The shift from traditional to digital advertising means delivery of a more responsive cross device advertising campaign. Campaigns run seamlessly over multiple digital platforms and the different screens on which they are being delivered, be it on a phone, tablet, laptop, video or television. Dedicated teams – such as that of Atmosphere Orange – interact with advertisers and brand marketers to integrate and leverage the data, optimising and recalibrating campaigns in real time. Not only does the campaign benefit from an increase in scale and targeting potential, it ensures operational speed and efficiency. This is backed up by transparent tracking and reporting and an opportunity to optimise and recalibrate campaigns continuously.
Programmatic marketing is without a doubt the future of online advertising. South African brand advertisers will need to embrace this new technology within the marketing process if they want to increase business revenue and achieve true omni-channel, customer-centric reach.
What is delaying uptake in South Africa is that not enough marketers truly understand the process and how to best navigate their brands through it.
Says Utermark: “For our clients already on-board, we find that once they see the process in action they are better able to understand and see the advantages and opportunities it offers as a powerful channel to market. Experience is the best teacher. With that in mind, we offer South African brand marketers the opportunity to engage with us on a provisional campaign basis so they can see the results for themselves. One of the strongest tools in the programmatic box is its efficiency and transparency. Once they see the results and experience the reach and conversations, we usually end up sitting across the desk from a very happy CMO wanting to know more.”
Imagine you are in a private train thundering along a super monorail twisting its way around the globe. Would you stay seated in your chair in the same carriage, looking out the same window for the entire journey? Or would you look out at the changing landscape from every imaginable perspective?
The train is your brand travelling in a digital world. Brand professionals know they need to understand every different destination’s individual inhabitants, their age, lifestyle, needs and desires as they arise in the moment with continuous touch points with which to revisit and engage with them. With the speed of messaging and a need for display bidding happening in milliseconds – faster than any train could muster – automated media buying does the engine work of converting a brand’s message and call to action into a personalised format for every set of eyeballs – circuiting past them again and again if necessary – until they finally climb on board.
“Brands should consider a broad approach to ad placing,” says Chanel MacKay, MD of digital media agency Atmosphere Orange. “A broad and comprehensive view of the customer journey, from their first engagement to purchase and then to loyal brand advocate across multiple devices and touch points establishes a series of collaborative partnerships with your customer.
“It is an inclusive approach for one brand identity that is served at all points of the customer journey. It’s an integrated cross-channel communications strategy that is customer-centric and can start with a brand’s customer relationship database and reach further than any type of standalone television campaign could ever achieve.”
When did mass messaging become a personalised conversation delivered at breakneck service speeds? Programmatic marketing’s tracking of digital data which delivers a 360 degree view of a brand’s customised marketplace. It creates a fine-grained outline of each individual customer’s appetites.
Blow the whistle, because there is more. You discover the train is not on a monorail after all. It is a virtual reality craft able to travel anywhere it wants through any device the person chooses to be looking through. It can shoot through people’s living rooms, visit stadiums, enter shopping malls, dip into family holiday times and corporate offices burning the midnight oil. Why would you want to stay on a monorail when it can transport you in the very hands of your perfect customer?
With over 7 billion people on the planet today, you might be forgiven for being overwhelmed by trying to manage what makes up the perfect customer. That is why we have super computers chewing up and spitting out data so precise they can collate each individual’s hundreds of interests and activities, gathered from multiple different sources over numerous devices at different times and places in each of those different destinations in their digital journey.
Your audience model just supersized itself and yet at the same time your message just got more direct and specific to the individual. Suddenly you are no longer a train thundering about on a monorail. Your brand messaging is responding to your customer through conversations that understand and speak to their preferences, actions and intentions in the moment they are thinking or doing it. As customer’s increasingly get their needs and desires met, so too do they become loyal brand custodians in pointing others to your brand. And is it word-of-mouth that is always the most powerful form of referral.
So how can a brand leverage a 360 degree view of its customer in order to continue retargeting and providing rich user experiences and cultivating repeat buys?
Step 1 – Start with a marketing strategy formulated from 1st party data. This is owned data collected from past customer purchases, loyalty programmes, customer relationship management (CRM) systems, merchandising, logistics and inventory sources and website publishers about their site visitors or customers online behaviour.
Step 2 – Use insights taken from 3rd party data in order to target new and look-alike audiences with tailored advertising offers. These insights require quantitative analysis of large complex data sets provided by digital media planning and buying agencies such as Atmosphere Orange in Cape Town. This is further influenced by factors such as precedent and intuition as your campaign is guided to grow new tracks on the digital platform.
Step 3 – Formulate an integrated advertising campaign that serves the same brand message across multiple media channels. These are on interchangeable cross platform formats designed specifically for internet, mobile, television and radio. This approach includes customer communication, outbound email, inbound lead nurturing, social, content, website, search engine optimisation (SEO), and pay per click (PPC). This is where creative agents work closely with data analysts to ensure that as further information is gathered about the audience, so the message can be further enhanced for more personal engagement.
With such a diversity of population in Africa, digital media buying today is innovative, automated and precise. It is a solution that every brand needs to be embracing in order to stay relevant. The prize is that together with its leverage and efficiency, it saves on budget and delivers more transparent marketing deliverables. As a new medium of advertising – and one that is growing dynamically – it makes sense for a brand to evaluate the power of programmatic marketing’s 360 degree approach.
You wake up one day and everything you thought you knew about marketing is obsolete. Welcome to digital age disruption in media buying and consumer messaging as marketing processes undergo a massive data-driven transformation.
You sit in your office buried under a mountain of data, but what does it mean and how do you analyse it? The biggest challenges advertisers, brand managers and publishers are facing is how to interpret all the data we have access to. Internet technology has made it possible to receive huge amounts of data about customers and expect more to keep coming. According to Forbes.com researchers at Cornell University have developed algorithms that can learn by merely observing human behaviour, these are computers so advanced they can detect and act on patterns in real time without having to understand them.
According to a 2015 CMO.com survey, digital marketing is expected to grow by 14.7% next year compared to a negative growth rate of 1.1% for traditional advertising. Marketing spend will see mobile triple from 3.2% to 9% of marketing budgets over just three years and 126% on social media over the next five years. This will see marketers spending more on marketing analytics. Currently analytics accounts for 6.4% of marketing budgets; this is expected to increase 83% to 11.7% in three years.
Don’t panic. You don’t need to go back to university. If you are stuck in a traditional style of marketing and decision making, you are going to feel challenged by data technology. This is when to call in the experts.
“We find that brand developers and advertising agencies often find themselves with simply too much information to handle. It is the old needle in a haystack conundrum; they know that somewhere there is something of real value but don’t know how to find it in order to manage or manipulate it. This is where programmatic media buying’s automation comes in to save the day with time efficiency, costs and meaningful results,” says Chanel MacKay, MD of digital media agency Atmosphere Orange.
The Pro Shop, which has been in operation for 40 years, had just this marketing challenge. Says Marketing Manager Trevor Rebello: “At one stage, we did dabble with online advertising but found we had to think hard about which websites would work for our products and where our market would be visiting. We were stuck with outdated thought processes which focussed mainly on traditional forms of media and on an older LSM as we felt this was where spend was. Working with Atmosphere Orange changed our approach. We moved away from a static product information focus to new product launch initiatives instead. We now have 30 000 – 40 000 unique visits to our own website each month and are probably one of the biggest golfing websites in South Africa. When customers want to buy golf clubs they come directly to us. As a result, we currently set aside monthly budgets for our online advertising. Atmosphere Orange finds the golfers for us,” says Rebello.
MacKay confirms that much of their role involves an educational factor: “We introduce brand managers, CMO’s, CIO’s and CEO’s to programmatic media buying, we manage the data and audience targeting for the brand and guide the brand’s marketing strategy along an effective online communication strategy that will quickly transform their business model.”
Another leading company on the marketing fast track is Cape-based agency Tag 8. “We currently partner with Atmosphere Orange on the digital aspect for two of our clients, and we have seen a real boost in business for both our clients,” says Belinda Taylor, Media Mind at Tag 8. “Programmatic marketing in the digital space has reach and offers such a defined target market across a variety of sites. It’s affordable and it’s trackable and it delivers on a brand’s campaign objectives. When a client has clearly defined objectives and KPIs they need to meet, we always motivate for RTB if it aligns with the campaigns goals.
As advertising technology continues to develop new marketing processes, the automation of buying and selling advertising online has progressed beyond that of human capabilities. Technology is a useful tool when you know how to use it. If you don’t, hand it over to the experts. Data gathered regarding consumer behaviour must first be translated into technical metrics for programmes and machines to understand it.
It is marketing professionals that drive innovative campaigns that speak to consumer emotions. It is digital media buyers who must still make decisions on where to reserve inventory and how to remarket the message back to consumers, supported by the skills of the brand’s creative teams, to execute a cross channel communication strategy.
What will success look like?
1) A new world of informed decision making.
2) Increasingly more effective creative and brand messaging.
3) The automation of processes that were previously time consuming and repetitive. 4) Swift execution of one brand message across multiple channels.
5) Effective measurement of campaign success.
6) Further optimisation of your brand message as more data is gathered following interaction with individual consumers in real time.
7) More effective use of marketing budgets and better returns on investment.
What will you have gained?
Improvement of your skillsets, efficient marketing processes, and the use of intelligent data to promote your brand. When marrying your marketing and communication strategy, your brand is elevated towards a more interactive customer-centric offering.
“Programmatic marketing takes a brands marketing strategy and transforms it into a cost-efficient communication strategy. Today, it is how you deliver marketing ideas that count. With consistent messaging across all channels of mobile, display and video, programmatic media buying provides the influence required to make the sale,” says Chanel MacKay, MD of Atmosphere Orange. “Our job is to ensure efficiency in the buying and selling of advertising in the digital space. We are able to demystify the newest technologies and show non-technical marketers how to use them to precisely target each message to each individual.”
Whether a brand wants to prospect, brand or convert, a programmatic communication strategy decides on the ‘how’ as well as the ‘where’ of the best medium to apply the marketing plan. “We sit on the execution side of selling,” says MacKay. “We are all about the relationship function. We understand the tactics needed for the technology and time-sensitive value propositions required for potential customers spending time on the digital platform.”
The rules have changed. Online display ads are routinely bought and sold through automated exchanges. Demographic data is just the first step on the programmatic marketing journey in finding and reaching your target audience on a one-to-one and personalised brand communication basis.
If your key focus for your brand is not on the impact technology has on a new way of doing business, you run the risk of lethargy. One of the greatest obstacles to innovations in companies is executives who fear change and remain anxious about their technological limitations. But responds Mackay: “Where in life are you expected to know everything. If you have a toothache, you book an appointment at a dentist. If your car needs repair you go see a mechanic. With big budget campaigns, you want to know that you are receiving high returns on your investment, that your campaign is transparent, that it is reaching exactly who you want to be talking to in any given moment.”
What conversations are you having with your customers on their digital journey? Do they know you even exist?
South Africa, having already embraced this relatively new trend, is experiencing a steep learning curve that is supported by an increasing understanding and uptake of its benefits. However, there is still a lot of confusion around what PMB is exactly. One such misconception is that programmatic marketing is only about real time online bidding.
Programmatic is a term that includes everything from behavioural and intent-based targeting to real-time bidding and exchange-based buying of media inventory. More specifically, it provides a brand manager with the ability to take a specific ad or campaign, set parameters on where, when, how, and who will see it. It measures impressions online and sets the pricing for what the buyer is prepared to pay to an online publisher or SSP (Sales Side Platform) to market the product.
With access to many digital publishers, such as Google, a Demand Side Platform (DSP) uses computer algorithms to maximise access to the different publishers’ space inventory to provide the best pricing, and most accurate audience optimisation for the brand.
Using a variety of data partners, the SSP identifies and buys a custom exchange for the brand, and so Real Time Bidding (RTB) begins. The bidding takes place in milliseconds for every digital ad space on the page, based on the product’s previously set parameters and price limits. The winning bid serves their impression. The important differentiator here is that the brand is ultimately targeting people and not properties. Each impression retains a value.
Digital media management agencies, such as Atmosphere Orange, track and control a campaigns performance through weightings, placement, dynamic creative and positioning in order to get higher impressions, click through or conversion rates. This means that campaigns can be optimised and spend adjusted following consistent, accurate feedback from granular targeting tools.
Craig Utermark, CEO of Atmosphere Orange explains further: “We micro-manage the outcome of a campaign based on the data that we collect on a daily basis. Digital media’s dramatically shortened response time allows us more transparency and the flexibility to quantify campaign successes, or identify what is causing a campaign to fail and rectify the issue within a very short period of time. Working with such organic data the client is given a meaningful view into their target market which then triggers further creative adjustment and refinement. Digital media advertising is accelerating in South Africa, especially with CEO’s and CFO’s demanding more accountability for spend from their CMO’s.”
It is necessary that South African brand managers wanting to stay ahead of their game, start taking advantage of PMB’s efficiencies, targeted reach and accuracy of data across all media channels.
Guidelines for brand managers eager to get on board will require a shift from the traditional negotiation skills of a media buying professional towards more analytical and technical skills, which is where digital agencies like Atmosphere Orange come in. Their industry knowhow ensures that via reporting, brand managers pay attention to quality by constantly refining, targeting and optimising advertising media. In this way brand managers are assured of not making a poor purchase or paying for un-viewable advertisements.
Atmosphere Orange offers an induction process where brand marketers are given a customised insight into the power of programmatic marketing for their brand, which includes training, strategy, reporting and delivery of dedicated digital buyers.
The technological advancements, control, and cost efficiency gained through programmatic marketing is shaping the future of digital marketing. Use of programmatic advertising has grown 20% in the last six months and as much as 65% of global publishers now sell their ad space through networks, with the rest coming online fast.
For those still resisting the age of digital disruption, there is always the comfort of the bottom line to refer back to, with brands such as Kellogg’s, experiencing digital media ROIs of as much as six times. It’s clear why South African media strategists are making calculated decisions and embracing the shift to digital media advertising.
One of the most basic principles of economics – opportunity cost – according to the Economist’s definition, is ‘the true cost of what you have to give up to get it.
Brad was shopping for his first hi fi stereo and had spent an hour debating between a R6 600 Pioneer and a R5 000 Sony. Fearing Brad’s indecision might cost him a sale, the salesman interjected saying “Think of it this way – would you rather have the Pioneer, or the Sony and R1 600 worth of CDs?”
Brad’s face lit up. The decision was clear, the Sony – and by a large margin. Fifteen new CDs were too great a sacrifice for the slightly more attractive Pioneer. Although Brad was quite capable of doing the math, he hadn’t considered that until the salesman pointed it out.
One constant in all our lives is that we must make choices. You make choices from the time you get out of bed in the morning until you go to sleep at night. All decisions involve opportunity costs, no matter the size of the decision.
Opportunity cost is your next best alternative – your second choice – and something you value. A brilliant ad by De Beers depicted two large diamond earrings with the tagline “Redo the kitchen next year.” Implying the cost of the diamonds was merely a slight delay in a renovation.
Why is opportunity cost important? Opportunity cost is what you give up when you make a decision. When you ask yourself what you are giving up when you make a certain choice, it forces you to think more critically about all of the other options that you are not choosing. It also forces you to think about the follow-up question connected to your decision – is it worth it? You may find that when you think clearly about all of your options and identify the opportunity costs of your choices, perhaps your choice is not worth what you will choose to give up.
How much is your time worth?
Your time is valuable, but how much is it really worth? When your flight is delayed by two hours, you might say ‘what a waste of time’ but do you ever say ‘that’s R1 000 of my time down the drain? It’s whatever your salary works out to per hour.
The opportunity-cost equation simply tells you what the cost of your time is, not how you should spend it or how you want to spend it. If you would prefer to read a book than work another hour, that says that you value the time relaxing more than your salary rate. All this calculation gives you is a benchmark against which to consider what you are doing with your time. The crucial application is in thinking about how you want to spend your time
Consider stationery shopping. You can order through your stationer and have the supplies delivered in a day or two. Or you can go to a wholesaler and spend two hours out the office. There’s no delivery fee for the former, but maybe there are higher priced items and a markup. Which is the better way to shop? This opportunity-cost idea makes the decision easy: Is the markup or higher prices smaller than the value of two hours of your time? If yes, delivery. If no, head to the car.
Applying opportunity-cost theory won’t always change your behaviour but can simply be a useful tool to understand why things are the way they are.
In South Africa, digital advertising on smartphones and computers will generate 52% of the total increase in ad spending during the next five years, with over half of South Africa’s internet traffic on mobile phones, making it the greatest opportunity for growth in the immediate future, according to digital media buying agency Atmosphere Orange’s Media Director, Chanel MacKay.
She points out that, ”Ninety-five percent of South Africa’s major brands use Twitter and 92% use Facebook to advertise. With 53% more YouTube users and 65% more Instagram users over the past year alone, marketers are increasing their social media budgets as they grasp the potential for market share growth on their doorstep”. According to the Chief Marketing Officer Council digital ad spending across the Middle East and Africa is ripe for expansion and will skyrocket to $1.35 billion in 2015, more than four times the global average.
The Pro Shop is just one example of South African businesses forging ahead. Says Marketing Manager, Trevor Rebello: “Online spend now makes up about 8% of our total budget and we realise that even this is a low figure. We were very clearly shown that for less money we can target more golfers across all age groups. Our budget spend has to continue to increase in this direction. We are also putting more focus on our social media profiles and all have grown as a result, in just one year. We realise digital is the way forward, we definitely see the results.”
Media is consumed over tablets, mobile smart phones and desktop with the average South African spending five hours online. Digital advertising is bought and sold on automated and superior targeting tactics with as many as 80 differentiating measures, including age, geography, and gender, far more than traditional advertising. This allows advertisers to sharply focus their campaigns and reach and communicate on a one-to-one basis with their market wherever they are and at whatever time of day they are online.
PwC South Africa entertainment and media industries leader, Vicki Myburgh says, “By embracing digital as the engine of their business‚ companies can position themselves to meet consumers’ changing demands through any channel and format – and more effectively and more profitably than ever before.”
Atmosphere Orange identifies three major trends. MacKay says, “media consumption is moving to mobile, outbound marketing has shifted to inbound and content marketing, and there is an increasing understanding of the advantages of programmatic media buying’ and with that comes remarketing and cross-device targeting.”
Clear advantages are gained with the automation of the media buying process. Not only does it streamline the inventory process on the buy and sell side, it can compose new audiences on the fly, across different content properties. Marketers can access millions of data points as to who saw their campaign, who engaged with it, what message they were attracted to, and how they converted.
A host of new insights about their consumers offers the best value for marketers, says MacKay, improving a campaign’s effectiveness and answering strategic questions . “Psychographic, behavioural and lifestyle data adds dimension to marketing communications. For example, a retailer may see that while they are getting a high click-through rate, their sales remains low. We can understand why. Looking at criteria such as geographical areas and specific times of day we might find consumers are visiting the site while at work but waiting to get home to order the product or service; or that there is high demand for the product but no retail site within reach of that location. Using this information the brand can then decide on where to build a bricks and mortar store within reach of new markets; or plan for a digital retail store to reach and service the geographic area.
“Brandwatch highlighted Hyundai integration of digital into their traditional marketing campaign by changing their website for five minutes whenever one of their TV ads was aired. They built a new landing page related to the model advertised on screen at the time, with a call to action. Testing was done by alternating the old site with the new site whenever the ad was run. Conversion rates for a brochure download or to book a test drive went from 0.7%of visitors to the regular site, to 3.3% on the new site, showing a 480% increase.
“Brands must now be super agile and ultra-relevant across all digital mediums and on a minute-by-minute basis,” advises MacKay. “Digital has put the marketing channel on an upward trajectory. Its influence is everywhere and it is creating and cementing relationships with the core focus of any marketer, their customers.”
Digital advertising maximises the return on investment for brands, by giving brands greater control with reduced display advertising costs. The advantages of programmatic marketing’s fine-grain tactics, dynamic creative and optimisation, also allows the consumer to benefit as they are less likely to be served ads that are not relevant to them. With increased relevancy comes an upsurge in quality conversions for the advertiser.
“Programmatic digital advertising requires less budget as there are lower costs per ad and wider, more targeted reach. Using the campaign’s key performance indicators (KPIs) the campaign might start off small and grow according to which channels deliver the most high-quality leads. Working 24/7, data is analysed, optimised and reported on regarding traffic, pricing, impressions, clicks, conversations and the time between every action, allowing the brand to react dynamically to market changes and keeping the brand marketer front and centre of the campaign’s performance,” MacKay said.