Why Data is Critical to the Success of Programmatic Marketing

March 24, 2014

Behavioral TargetingOne of the hottest terms in the digital industry right now is “programmatic.” What is it? And what does it mean for the marketing mix?

Programmatic marketing is when data is applied to bidding on an ad placement through an ad exchange in real time to:

  • Deliver one specific ad
  • To one anonymous customer (ideally in the right context, at the right time and on the right device)

This concept of automated, real-time marketing uses sophisticated algorithms, business rules, and incredible computing power to match advertisers and publishers. Within programmatic marketing, each customer interaction automatically informs the next, and artificial intelligence executes automated purchases of targeted ads. This continual learning of what works and what doesn’t gives life to increasingly better campaign results over time.

BT_Cap_AnalyticsThe lay of the land

Looking at the total U.S. digital ad-spend market, it’s clear that programmatic/real-time bidding (RTB) is the fastest-growing method of purchasing media. In fact, the growth of RTB within the display market alone has been astounding, and according to eMarketer now accounts for 73.9 percent of all display media purchased. Drivers of this growth include RTB’s ability to make the entire ad-buying process more efficient and effective. How? By removing the burden of people having to manually negotiate contracts, and by using data and science to give life to smarter, automated media purchasing based on specific customer behavior for greater return on investment.

Channels_Icon2It’s all about the data

Why is data critical to the success of programmatic marketing? Programmatic marketing activates a buying approach that leverages the efficiency of automation. Data is the fuel that feeds the automation to ensure the message is being delivered to the right audience at the right time. Furthermore, it enables marketers to systematically use customer insights (both first- and third-party data) to target the most valuable customers and present them with the right experience at the right time, regardless of where or how they’re interacting with a particular brand.

PerformanceWhat is Signal seeing?

Considering these trends, we decided to survey our own clients to get a pulse on programmatic media buying. Overall, we noticed their marketing strategies are very much in line with the Interactive Adverting Bureau’s market growth figures, which state that 20 percent of all spent media dollars go toward programmatic buying.

Out of all the solutions utilized by Signal clients through our platform, 15 percent of these solutions include some type of programmatic technology. When taking a look at the total amount of data that Signal collects from our entire client base, 25 percent of this data volume is leveraged by these programmatic solutions.

dataxuPartner spotlight: DataXu

DataXu, a Signal Certified Partner, is a leading innovator in the programmatic space. Last year, Inc. magazine ranked DataXu as the No. 1 fastest-growing private company in the advertising and marketing industry, and No. 5 in its 2013 Inc. 500 list. Not only does DataXu’s platform enable programmatic ad buying and campaign execution, it is unique in the fact that it lets marketers control and optimize their campaigns in real time, based on attribution and analytics of how those campaigns are performing.

“By using advanced data science, our cloud-based software helps marketers better understand and better engage customers throughout their buying journeys,” said Chris Lobdell, General Manager, Central Region, DataXu. “We enable them to get the most out of their marketing investments and form more efficient, effective customer-acquisition strategies.”

How does Signal factor into this equation?

Lobdell continued, “Through DataXu’s strategic partnership with Signal, we gain the valuable opportunity to unlock the power of our shared clients’ most valuable first-party customer data, and layer that information with third-party data so that their programmatic campaigns can run most effectively and efficiently as possible. Signal brings us this granular level of customer insights. And thanks to our Server-Direct integration with Signal, we can even tap into offline data sources to make our clients’ marketing initiatives even stronger.”

Carol Jouzaitis

Carol Jouzaitis is VP, Analyst Relations at Signal.