STATE OF THE INDUSTRY: RISE OF THE (BRANDING) MACHINES

Transcription

1 STATE OF THE INDUSTRY: RISE OF THE (BRANDING) MACHINES

2 L+57 L+90 L+85 METHODOLOGY To help paint a detailed picture of this ever-evolving marketplace, we conducted an extensive online survey, completed by a diverse group of over 250 digital marketers at brands and agencies during a two-week period in May We supplemented this survey with in-depth, one-on-one conversations to help give color to the broad-based trends we saw in our qualitative data. Overall, our survey base was predominantly senior and savvy about programmatic: Over 70 of respondents are VPs/Directors/ Managers or above and 18 work in senior management roles at their respective companies VP/Director/Manager Other Founder/Owner/Partner C-level (CEO, CMO, CTO, etc.) SVP/EVP/General manager Nearly half of all respondents are experienced industry veterans with over a decade of digital experience. More than half have used programmatic advertising for 18 months or more More than 24 months 18 to 24 months 12 to 18 months I am a Veteran (15+ years in digital) 14 I m experienced (10+years in digital) 34 I m still learning (5+years in digital) 36 I m a newbie (1 year in digital) 16

3 2-MINUTE SUMMARY Marketers embrace programmatic branding The state of the programmatic industry is strong. Programmatic use among marketers is growing, and their increased focus on programmatic branding illustrates further acceptance of programmatic technology as a tool for achieving their campaign goals. The findings throughout this report show that programmatic has come far beyond the fringe when it comes to the world of advertising technology, projecting a strong and growing presence. As more and more marketers harness programmatic processes to reach their goals, they are increasingly interested in pushing automation to its limits, no longer content with waiting passively to see what happens. No time for a detailed report? Then hold onto your mouse as we take you through a whirlwind tour of the key findings. 1 Marketers are getting 2 Programmatic s slice of the budget pie will their hands dirty with programmatic. get bigger. Nearly half of the respondents have had hands-on experience executing programmatic campaigns and consider themselves active practitioners. On top of that, over half of the respondents have used programmatic for 18 months or more. In distinction to Chango s Programmatic Pulse study from just a few months ago, these findings show that more and more marketers are using programmatic and getting comfortable with the technology and its applications. 3 All channels and platforms 4 are important. Traditionally, display has been the place for your ads to appear. Our study shows that display is still the format most heavily employed by marketers, with 68 percent of respondents ranking it as somewhat to very important. However, video (58 percent), mobile (58 percent) and social (55 percent) have also grown in importance. Even programmatic native advertising is growing, with 49 percent categorizing it as important. Display is no longer the only digital game in town. Time to start diversifying. Whether the respondents were programmatic-savvy or not, they all believed their programmatic budgets would increase significantly next year. Almost 90 of those surveyed anticipate that any digital budget increase would apply to programmatic branding. Programmatic branding will be a growth area. The executives we surveyed saw branding as the leading objective in the use of programmatic: 68 percent identified it as important. In a marketplace that has typically focused on direct response, marketing executives are seeing programmatic branding as a new growth area. This indicates that there s more trust in what programmatic campaigns are capable of doing. 5 Barriers to the use of programmatic remain. 6 Programmatic is growing and thriving, but a few things are still holding it back. Most marketers like programmatic s cost efficiency and its ability to improve campaign performance. However, there are still concerns over fraud, the quality of ad placements on sites and viewability. Less-experienced programmatic users cited a lack of education and technical complexity as inhibiting the use of programmatic. Programmatic is the future, but difficulties persist. Four out of five respondents agree or strongly agree that the majority of digital media buying will occur programmatically in the future. However, there are still concerns about the availability of premium inventory in the marketplace. But on the bright side, respondents also believe that automation won t signal the end of human labor.

4 L+91 L+92 L+85 L+32 MARKETERS ARE EMBRACING PROGRAMMATIC Does experience influence attitudes about programmatic? To better understand the influence of experience, we segmented respondents according to their self-reported expertise with programmatic: Practitioners: Respondents who have used programmatic to execute a campaign. Strategists: Respondents who understand how to use programmatic, but who do not execute campaigns directly or as part of a team. Novices & Neophytes: Respondents who still have more to learn about programmatic in order to feel comfortable using it. A subset of marketers is still struggling to get up to speed: have never used programmatic and have no plans to do so in 10 have been buying programmatically for 6 months or less. of respondents are selfdeclared Novices & Neophytes who need to learn more about how programmatic works Programmatic will receive a bigger slice of the digital budget pie Regardless of their programmatic experience, the vast majority of marketers we surveyed believe the percentage of the digital budget devoted to programmatic will increase; over half believe the increase will be significant. Less than 6 percent thought spending would go down and a very small percentage was unsure of how spending would evolve. INCREASE SIGNIFICANTLY INCREASE SOMEWHAT However, a larger proportion is more comfortable with programmatic processes: 68+ More than half of respondents have used programmatic advertising for 18 months or more. PRACTITIONERS NEOPHYTES/NOVICES

5 A MULTI-CHANNEL APPROACH IS THE WAY TO GO While programmatic has extended to diverse objectives and platforms, it has become even more ROI-focused as it has grown more prevalent. When asked to rank the relative importance of various types of programmatic advertising, respondents indicated that a multifaceted, multi-channel approach is most desirable. Desktop retained its position as the most important programmatic channel (68 percent ranked it somewhat to very important), with video (58 percent), mobile (58 percent) and social (55 percent) following close behind. The survey also confirmed the rising importance of native advertising deployed via programmatic means (49 percent) and the heightened interest in moving programmatic practices to traditional channels like TV (36 percent). [Multi-channel is] far more challenging, because in many respects more branding-focused formats have been predicated on interactivity and greater size. In other words, typically branding ads are bigger and have more sight, sound and motion. And all of that, both size and interactivity, become more challenging on mobile. Ari Lewine, co-founder and CSO, TripleLift Not surprisingly, Practitioners lead the way here, over-indexing in their rankings of the importance of all these channels. 70 rank desktop as somewhat to very important and 65 recognize video as important On Destop & Laptop Pcs 49 On Mobile Devices such as Smartphones and Tablets In Video Deeply integrated into content (I.E. Native Advertising) In Social In Search On TV Shiny new modeling tools The future will bring even more sophisticated techniques to track marketing impact. One emerging area we asked our respondents about was multi-touch attribution modeling. This modern approach to modeling marketing impact has been moving to the forefront lately. The method has many uses, from tracking multi-channel spend across platform to understanding conversion paths and adapting creative to the consumer s stage in the purchase funnel. It goes a long way in helping marketers uncover more data about their consumers in their programmatic campaigns L L L L Plan, activate and optimize multi-channel media ad spend effectively, in real-time, across every channel and inventory source L Adapt creative and messaging to a consumer s stage in the purchase funnel We have not done L any Multi-touch attribution modeling to date but have plans to do so in the near future 46 Understand and repeat successful paths to conversion Implement and derive insights from attribution modeling in real time at the individual consumer level We have not done any Multi-touch attribution modeling to date but have no plans to do so in the near future PRACTITIONERS STRATEGISTS NOVICES/NEOPHYTES

6 L+32 L+43 L A BRAND NEW UNIVERSE FOR PROGRAMMATIC What goals are you trying to achieve via programmatic advertising today? Programmatic has traditionally been rooted in direct marketing practices and objectives. However, as programmatically-served ads are able to reach more and more platforms and channels, the tide seems to be turning toward more innovative formats and the objectives that come with them. Branding, a less traditional programmatic objective, now leads as the main goal (68 percent), followed by more traditional tasks like lead generation (57 percent) and increasing online sales (56 percent). Interestingly, customer retention was the least important objective among respondents, with fewer than one in three marketers using programmatic to achieve traditional goals like improving customer retention and wallet share growth Branding increasing awareness, favorability, etc. 57 Lead generation 56 Increase online sales Which of the following brand objectives have you attempted to achive via programmatic means? Programmatic branding has clearly arrived: 64 percent of respondents have used programmatic advertising to support branding objectives (among Practitioners, this figure is closer to 80 percent) and another 23 percent state that they plan to do so in the future. 64+ We have used 23 programmatic buying methods to support campaigns focused on 13 branding objectives We have not used programmatic buying methods to support campaigns focused on branding objectives, but are planning to do so We have not used programmatic buying methods to support campaigns focused on branding objectives, and are not planning to do so Think of the people who are engaging with your brand right now, conducting searches for your brand, keywords, visiting your store: You call those hand raisers. Think of the next layer of people up-funnel from them: They re getting ready to search your keywords, getting ready to visit. Programmatic can hit those people. It can find them and hit them. Adam Heimich, head of programmatic, Horizon Media

7 L+21 L+33 L+61 L+64 WHAT EXACTLY IS PROGRAMMATIC BRANDING? Okay, but what is programmatic branding? Programmatic is an effective tool for meeting goals at all levels of the funnel, including the goal of fostering brand awareness. The programmatic aspect allows marketers to better measure awareness and to employ flexible tactics like behavioral targeting and customized campaigns. There are a number of objectives within the broader branding category. Programmatic marketers are mainly focused on traditional objectives such as building brand awareness (79 percent) and engagement (67 percent). These are far and away the most commonplace. Programmatic is used less frequently for more complex branding work like changing brand perceptions (39 percent) and building brand affinity (36 percent) Build brand awareness via methods such as upper funnel content and formats (e.g. videos). Build brand engagment via methods such as look-alike targeting to find consumer who are going to engage similarly to your best consumers Change brand perception via methods such as retargeting based on brand affinity signals to change perception. Build brand affinity via methods such as CRM retargeting to strengthen the brand relationship between the consumer and the brand.

8 MEASURING THE SUCCESS OF PROGRAMMATIC BRANDING So we can clearly see that branding is a big programmatic priority now and will continue to be in the future. But how well are marketers measuring the success of their efforts? Viewability is the first metric of what I call static engagement. Touching it is too much to ask, but that it be viewable is not too much to ask. So it s a pretty good start to having the sort of metrics that can apply to something at that mass. Adam Heimich, head of programmatic, Horizon Media How are you currently measuring the success of your programmatic branding efforts? On the positive side, the leading metrics seem to be right on target: custom and campaign-specific KPIs (61 percent), video-specific metrics (58 percent) and advertising effectiveness studies (49 percent). This showed a degree of sophistication and specificity in approaches to ROI perhaps unexpected in a nascent practice like programmatic branding. On a less encouraging front, over half of respondents (57 percent) defaulted to more generic metrics like click-throughs. Among those marketers attempting to measure engagement, frequency and viewability are the most-used brand engagement measurements. When it came to accurately measuring ROI, there was a clear answer: Regardless of their expertise, respondents indicated that they valued understanding interactions and real-time optimization most highly L Campaign L specific/custom key performance indicators (KPIs), such as viewability, targeting index and frequency Use of video specifics metrics, such as viewability, percent of video watched, and percent of completed views 2+98+L L Click-through rate L Advertising effectiveness studies L Multi-touch attribution modeling 2 We are not measuring the impact of programmatic branding in any standard way at this point in time Marketers display their tactical prowess Grand strategies are great, but it takes a suite of well-used tactics to win the battle for consumer attention. We asked respondents to rank a number of data and programmatic techniques used to amplify branding goals and to target customers more efficiently. Behavioral targeting (73 percent) and retargeting (60 percent) emerged as the two key choices among a diverse group of options. Over half of respondents also highlighted issues like viewability and the ability to reach audiences at scale as key to making programmatic campaigns work. On the fringes, more complex, esoteric practices like building engagement, customization of campaigns and real-time measurement resonated as well.

9 MEASURING THE SUCCESS OF PROGRAMMATIC BRANDING What s driving, and inhibiting, growth The future of programmatic A complex dance is taking place between factors encouraging programmatic usage and factors retarding adoption. Our survey revealed several things: To better understand their attitudes and opinions regarding certain long-term programmatic trends, we asked respondents to agree or disagree with a series of statements. Here is what they had to say: Drivers: Overall, cost efficiency is the key factor driving programmatic use. Complete sets of data, real-time buying and better targeting complete the square. Experienced users also cite programmatic s ability to improve campaign performance as an asset. Four in five respondents agree or strongly agree that a majority of digital media buying will take place programmatically in the near future and that more and more branding dollars will be spent via programmatic means L Cost L Having a more complete set of data and insights about L Real-time buying Efficiencies & placement L Improved performance our target market On the cautionary side, the same amount (80 percent) of respondents agree that there is a lack of premium inventory in the market. This segment also dismissed the notion that programmatic buying methods would eliminate the need for human interactions any time soon. Looking into the future, a majority of digital media buying will be done programmatically More and more branding dollars will be spent via programmatic means over the next 12 to 24 months 52 1 Inhibitors: When asked to select from a long list of possible programmatic inhibitors, the majority of marketers selected fraud and site quality as top issues, followed by viewability and waste L L Fraud Viewability L 58 Site quality/ Brand safety concerns L 46 Waste (ads that end up targeted to the wrong demographics) 27 There needs to be more premium inventory available in the market Strongly agree Agree Neutral Disagree Strongly disagree One day, media buying will be done without any human interaction 20

10 CONCLUSION A lot has changed in the several months since we last surveyed marketers about their use of programmatic advertising. These changes have by-and-large been positive, trending toward increased growth and indicating an increase in adopters enthusiastic about programmatic technology. When asked to use one word to describe programmatic advertising today, the response was deafeningly supportive of automation: efficient, exciting, evolving and optimistic. A year ago, the tone of marketers was quite different; words like promising, hopeful and uncertain were among top responses. By far the most promising finding has been the use of programmatic to achieve branding objectives. In fact, programmatic branding is already the most popular type of programmatic advertising currently being deployed. With four in five respondents saying that a majority of digital media buying will take place programmatically in the near future, more and more branding dollars are set to be spent via programmatic means. But it s always difficult to hit a moving target, and as the evolution continues, there s an intricate give and take taking place between factors that encourage usage and factors that delay adoption. Marketers are willing to spend programmatically, but concerns remain over what happens to those ads post-sale: Where do they go? Who sees (or doesn t see) them? How well-targeted are they, really? Even though marketers are still wrestling with how to measure everything from overall ROI to campaignspecific impact, there s abundant reason to be optimistic. Experienced users have embraced the capabilities of programmatic, and the continuing project of educating novices will only accelerate our ascent into a programmatic world. Even now, there are no signs of a slow-down. About Chango and Digiday Chango Chango is a programmatic advertising company purpose-built for the marketer. The company uses exclusive intent data and technology to create relevant, timely advertising campaigns and to produce rich customer insights. The company s unique live-profile technology makes intent data available faster than anyone else to help clients efficiently build brand awareness, acquire new customers and retarget site visitors. Chango works with more than 60 Fortune 500 marketers and companies, such as ebay, Sears, Clorox, Sprint and Toyota. Chango was recently acquired by Rubicon Project, a global technology company leading the automation of advertising. The acquisition allows Rubicon Project to expand its premium advertising marketplace to include intent marketing capabilities at scale. Digiday Digiday is a media company and community for professionals who work in the digital media, marketing and advertising industry. Digiday s mission is to connect industry players with insightful analysis and perspective, as well as each other. Digiday provides key insights and information through our online publications and conferences that cover changes and trends - and why they matter. The focus is on quality, not quantity, and on honesty instead of spin. Digiday is driven to produce the highest quality publications, conferences and resources for our industry.