Programmatic Marketing

Programmatic marketing describes all marketing actions, implementation, control, and execution which are based on algorithms and automated rules. Thus, this form of marketing is not limited to the automated purchasing and distribution of advertising media, but also affects the design of websites and the development of marketing actions through newsletters or emails. A prerequisite for programmatic marketing is a corresponding infrastructure, which makes it possible to process big data.

History and background

Online advertising has developed almost parallel with the beginning of the commercial Internet in the 1990s. As early as 1994, advertising banners were distributed for the first time on the AOL network. A year later, Yahoo started with text ads. The online advertising industry has continued to develop ever since. While many forms of advertising, such as the banner and the text ad remained the same in principle, it is above all the type of the control which has made enormous progress. The first highlight was the launch of real-time bidding in 2009. For the first time, computers instead of people handled the purchasing of advertising space. These computers competed with the best offer for the placement of banners and other web resources on platforms that participated in the auction.

The result of this innovation is automated shopping, called programmatic buying, of advertising space. Finally, in 2012, the term “Programmatic marketing” was introduced for the first time as the overall term for all algorithm-based and machine-driven advertising campaigns by Digiday 2012. The title of the corresponding blog entry was “Why programmatic marketing is the future.”

Since then, data-based advertising has been a major topic at marketing conferences around the world. Numerous companies have now specialized in processing large amounts of data in such a way that software can create meaningful algorithms and rules for the control of advertising media.

Requirements

In order for you to reap all the benefits of programmatic marketing, you need a large data base. The more data that is available to the respective programs, the more precise conclusions for marketing actions or the product promotion can be drawn from the datasets. In addition to this data base, the corresponding software must also be able to process Big Data. Some advertising programs such as Google AdWords or even affiliate programs already provide approaches for programmatic marketing actions. But it is not enough to simply use the data from web analyses. These must also be enriched with additional data profiles in order to develop effective algorithms.

Areas of application

Programmatic marketing is often equated to programmatic advertising, since most of the applications are contained within this field. This mainly includes real-time advertising or the real-time bidding, which is part and parcel of the programmatic marketing. Retargeting should be mentioned in the same context, which is now often controlled by means of algorithms. It is thus possible to tailor advertising offers individually to the respective user. In this case, the advertiser does not have to intervene anymore, but the automated marketing program changes the respective advertising medium itself based on its available data.

In contrast to pure programmatic buying, whereby ads are purchased by a computer, programmatic marketing is also used directly on websites. In the course of increasingly targeted content, this form of marketing makes it possible to deliver web content dynamically and tailored to the needs of the user. An example of this are travel offers, which are based on the search history of a website. Recommendation engines are part of the field of application of programmatic marketing. These programs process customer input and customer purchases in such a way that the buyer receives further suitable purchase proposals. This increases the chance that additional purchases will follow after a purchase. Large shopping portals such as Amazon, Otto, and Ebay makes use of this strategy in particular.

In the area of ​​e-mail and newsletters, Programmatic marketing offers an even more precise target group approach. Programmatic marketing optimizes shipping times, reminds you of open shopping carts or informs users about current offers.

Benefits for online marketing

The benefits of programmatic marketing will be realized by a sensible implementation of the measures, above all in efficiency. Scatter losses can be significantly minimized through the exact calculation of probabilities and potentials in the control of advertisements or recommendations for customers. At the same time, the automatic processing of data and analysis in real time ensure that advertising customers can save a lot of time and can react quickly to changes in buyer behavior. However, the fact that the implementation of the infrastructure usually requires a high level of material and often also financial expenditure has to be taken into account. Large amounts of data are needed to derive meaningful algorithms and rules from buyer and user behavior if you do not want to resort to benchmark data. Thus, the question as to whether programmatic marketing in its full scope is applicable to small online retailers as well remains, if costs and benefits are put in relation. However, programmatic marketing is also applied to a smaller extent, for example, when PPC campaigns are controlled based on previously defined rules.

Web Links

• How far should programmatic marketing go?