LINKS – Media Buying White Paper
Over the last several years, the media buying landscape has undergone a dramatic shift. With advances in technology being developed and adopted by marketers at an increasingly rapid rate, discussions surrounding these innovative marketing technologies have recently been at the center of the advertising industry. At LINKS WorldGroup, we recognize that digital media is a vital part of any modern marketing strategy and we strive to stay on top of cutting-edge technologies in the advertising space in order to supply our clients with the optimal return on their paid media investment.
One particular advance in technology — programmatic media buying — has taken up a lot of the recent conversation and factors prominently into the battle for customer engagement.
According to IAB Europe’s 2015 Programmatic Market Sizing study, programmatic advertising has reached a market value of more than $5 billion. Nearly all of the stakeholders, including strategists, planners, buyers and operational teams across the digital ecosystem are embracing programmatic media buying and are building on its potential for value creation. In fact, the same study revealed that 89 percent of publishers, advertisers and advertising agencies polled believe that programmatic will have a significant impact on digital advertising and 30 percent expect programmatic media buying to be dominant.
There appear to be many obstacles to overcome as the technology itself matures and media buyers and sellers acquire the skills necessary to take advantage of it. Make no mistake though, programmatic media buying is now a sizable part of the digital advertising ecosystem and all indications point toward the notion that it is set to become even more important in the coming years.
So, just what exactly is programmatic media buying? The majority of marketers believe their understanding of programmatic could be better. Perhaps overly simplified, it is the use of new technology tools to automate and optimize the process that purchases ad space.
Marketing success is hitting consumers with the right message in the right place at the right time and for the right price. Programmatic media buying does not alter this thinking, but it makes the delivery more effective than ever before by removing the boring and repetitive tasks that are involved in the buying process, which frees up additional time for strategy and insight by advertising professionals.
When buying media, marketers are still setting objectives and understanding client expectations. Effective media buying campaigns utilize research and analysis in order to accurately measure the campaign’s impact and provide valuable insight.
Programmatic media buying provides the ability to drive marketing efforts with data. Utilizing the proper data on current or prospective customers enables better audience targeting that can lead to higher rates of conversion. In the data-driven world of programmatic media buying, research and analysis becomes even more important to delivering an effective marketing strategy.
Additionally, the ability to conduct business on a media buy within fractions of a second allows real-time advertising to occur. This increases the campaign’s chances of hitting the right customer at the right time with the right message.
With programmatic media buying, buyers are now able to automate some of the functions, if they have the right technology and people in place, but they must continually test and optimize the campaigns in order to secure optimal results for their paid media strategy.
Programmatic media buying, when executed properly can be much more cost-effective than traditional media buying practices, but the fragmented media landscape brings increased complexity to the oftentimes complicated media buying process.
The technology behind programmatic media buying will continue to evolve, as the move from buying media to buying audience is a sizable conceptual shift and the ways in which buyers can employ programmatic technologies are becoming easier than ever before — but a problem exists.
The Programmatic Problem
Unfortunately, programmatic media buying remains rather high-level and can be a convoluted process. There appear to be myriad potential solutions as well as this sense of impending fear that programmatic is going to put media buyers and sellers out of jobs in the not too distant future.
The most prevalent issue surrounding programmatic media buying is the lack of transparency involved throughout the complicated media buying process. A 2016 study by K2 Intelligence found non-transparent business practices to be pervasive throughout the U.S. advertising industry. Some of these practices include rebates, principal transactions that enabled potentially problematic practices and discounts offered by media suppliers to buy certain media. One reason for these problematic practices the study found was a fundamental disconnect regarding the advertiser-agency relationship.
More than one business model exists when buying media programmatically, and they differ from each other greatly. The first model — programmatic products — allows buyers to pay for results but possess less control. In this model, the buyer sends an order, paying for a defined outcome, whether that is re-targeting, audience buying or delivering leads. The main benefit of the programmatic products model is the ease of buying them and the low-risk but rewarding results they provide. The disadvantage is that some advertisers see is the lack of control. The media vendor usually does not disclose which media they bought for which price and how they optimize the purchase.
The second model — programmatic services — allows buyers to pay for all the disparate parts of the setup and have complete control over the process. In this model, the advertiser pays separately for everything — the media inventory bought, the technology and the third-party data — giving the marketer control and accountability on the technology choice as well as access to all of the reporting and performance data. Obviously, the advantage of the disclosed services model is full transparency and control. But, there are some disadvantages, as well. It can take significant time and effort to manage programmatic media buying campaigns, as the vast amount of data produced requires both technology and humans to analyze and optimize. Additionally, with ownership comes full accountability. The advertiser needs to understand which technologies are being used, which media buying strategies are deployed and how the campaigns are executed.
At LINKS WorldGroup, we believe the programmatic services model is the preferred solution to the transparency problem, as costs pass through the model transparently allowing for full disclosure. It is the method that our agency utilizes, because as our clients’ agency, we are obligated to act in their best interests and optimize the return on our their investments.
Our team has the expertise and an intimate knowledge of the demand-side platform we utilize, which media buying strategies have worked in the past and the ability to adapt and optimize the campaign in real time through testing. This expertise allows for the ability to leverage the quality data generated to efficiently reach and engage the target audience. LINKS WorldGroup’s programmatic media buying strategy affords our clients the right set of circumstances to overcome the fragmented digital media landscape as there are now more opportunities to segment and target a consumer audience.
Furthermore, our expertise in programmatic media buying allows us to foster collaboration between our agency and vendors by moving the focus from cost of media to the value of the audience.
On top of our proven expertise in the programmatic media buying sphere, choosing LINKS as your marketing and public relations agency will bring efficiency and financial savings to your company. LINKS possesses the negotiation skills, professional relationships, media clout and responsibility to act in our clients’ best interests in order to transform their marketing efforts and optimize the return on their investment.
In the end, the constantly changing and increasingly fractured media landscape has changed the way media is purchased. Despite the notion that programmatic media buying is inherently complex and that it allows non-transparent business practices to occur, by fully disclosing all of the fixed costs in the process and being transparent in our media buying strategy, we have developed a mutually-beneficial advertiser-agency relationship with all of our clients.
Our agency brings expertise, efficiency and financial savings to the programmatic media buying landscape and we are able to unlock the hidden value in data held by advertisers and vendors alike. By moving the focus from the cost of media to the value of the audience, LINKS is able to provide the most optimal ROI for our clients.