The big promise of digital marketing was supposed to be unification: many channels, one message. Programmatic ad buys—executed automatically, like stock trades—were supposed to be the lynchpin that would free marketers to do smaller, faster, more niche campaigns.
But as attendees to Adobe Summit in Las Vegas, the company’s annual digital marketing conference, learned today, automated ad buys have created chaos inside some marketing organizations. For one thing, the decision to buy media is only as good as the data you feed into the system.
"The programmatic ad space has changed so much since a few years ago," Gary Tsang, the CMO of Chegg, said during one of the Summit’s morning sessions. "You used to go to an ad network and just buy media—it was totally spray and pray."
But the real risk (beyond randomness) lies in the reporting quagmires and redundancy that can result from undisciplined programmatic ad buys. As marketing teams segment into smaller and smaller groups, their automated bids run the risk of driving up costs for other teams in the same company who happen to have overlapping segments and may be unknowingly bidding on the same media. Duplication is a risk, too, throwing off insights on top of adding cost.
Still, programmatic buys are booming: This year, 55 percent of all display ads will be programmatically acquired, and that’s projected to grow to 63 percent next year, according to a Forrester survey taken last year. But while the overall industry direction is clear, only 23 percent of marketers in the same survey said they understood and used programmatic buying; incredibly, 40 percent said they didn’t know anything about the practice.
In fact, reach has become a commodity; today, it’s all about return on ad spend. Customers are used to seeing ads for the same brand across different networks, leading to a blurred experience—the exact opposite of the channel-specific approach.
The challenge is delivering the right message to the right customer at the right time. With more careful, automated segmentation, marketers can begin to hone in on exactly the group they want to message at any given moment.
For Chegg, which runs an e-commerce business aimed at college students, customers progress through a predictable multi-year period of their lives.
"When I first started at Chegg, we were doing less than five percent programmatic. Today it’s closer to 15," Tsang said.
Why? Because it takes up to six years for someone to graduate from college, but colleges have new batches of students being added to the pool each year.
New customers are perfect for display advertising, but existing customers are better engaged in other ways.
"We’re reaching out to people who haven’t even thought of us yet," Tsang said. "So if we want to grow, that means spending more on programmatic display."
This article was created for and commissioned by Adobe, and the views expressed are their own.