Over two thirds of online display advertising across the globe will be traded programmatically within 12 months. In the most advanced markets, that figure will rise to 90%. The growth of precision marketing has largely been couched in the language of efficiency, with many marketers deploying it to reduce wastage, to suppress audiences, and to save money.
- Define a range of audience segments, each of which has some potential for conversion
to active customers.
- Attach a commercial value to each of these segments.
- Allocate investment to targeting each consumer segment to maximise the achievement of brand objectives.
However, the rise of programmatic has gone hand-inhand with two other trends. Firstly, the oversupply of digital inventory has driven down the cost of reach in many markets. Secondly, advances in production technology have driven down the cost of creating content.
Together, these factors should reframe how brands use programmatic away from pure efficiency, and towards top-line growth. The ability to use new data sources in audience creation means that almost any segment can be addressable in some way, at low cost. This means that, once a master creative format is produced, the marginal cost of reaching a new audience segment with the relevant content experience is low.
Reframing programmatic to be about maximising the demand opportunity can create a new role for planning to drive growth.”
Programmatic maximises the demand opportunity for brands, by allowing them to direct relevant communications at their total addressable market.
This gives rise to interesting new questions at the heart of the planning process, and adds a new spirit of creativity into the audience definition process. Are there specific segments of a competitor customer base we want to steal? How might we build a specific, targeted plan to convert them? Can we identify people who are 6-12 months away from entering the category, and nurture a relationship with them? Should we target outright rejecters, systematically addressing known barriers over time?
Reframing programmatic to be about maximising the demand opportunity can create a new role for planning to drive growth. Firstly, brands must attach commercial value to audience segments with known needs, barriers, and drivers. Secondly, they must define, design, and deliver the appropriate experience for each of those segments. Finally, they must treat those audiences as a fund manager treats their portfolio of assets – allocating investment behind audiences to drive short-term cash flow, or long-term value, based on the brand’s objectives.