Programmatic Marketing Demystified for Direct Marketers

Programmatic marketing is tailor made for direct marketers. Why? Because direct marketers know the identity of our customers and opt-in prospects and that data can be matched with browser IDs. Matched customer data takes online advertising beyond retargeting. After clearing away the techno-speak, what you discover about programmatic marketing, or real-time bidding (RTB), is a hidden opportunity for direct marketers. With a 35 percent growth rate projected in the next three years, programmatic marketing is an online opportunity every direct marketer

Programmatic marketing is tailor made for direct marketers. Why? Because direct marketers know the identity of our customers and opt-in prospects and that data can be matched with browser IDs. Matched customer data takes online advertising beyond retargeting. After clearing away the techno-speak, what you discover about programmatic marketing, or real-time bidding (RTB), is a hidden opportunity for direct marketers. With a 35 percent growth rate projected in the next three years, programmatic marketing is an online opportunity every direct marketer needs to become versed in.

My hunch is that a lot of direct marketers are lost, either trying to grasp how programmatic marketing can be practically used by them, or if it’s even worth exploring. I’ve recently investigated and researched programmatic marketing for a client to determine if it made sense for them. In the process, I discovered something that suggests direct marketers have a leg up as users of real-time bidding.

I’ll explain how the opportunity for direct marketers works in a moment. But first, let’s review a few fundamentals about programmatic marketing and how real-time bidding enables it to work.

  1. Programmatic marketing is where you establish automated business rules (who is targeted, and with what ad) so you can quickly and efficiently target your most valuable prospects and prospective customers.
  2. This targeting enables you, the marketer, to serve your prospects and customers with digital ads.
  3. Programmatic marketing is a strategy, or a marketing process. Real-time bidding (RTB) is the tactic that enables programmatic marketing methods to work.

Unlike most banner ads that are indiscriminately shown to anyone on a certain website, the goal of programmatic marketing is to eliminate wasted impressions. That is, you only want your ad to be shown to users who have, based on prior online behavior, indicated a likely interest in the category of the product you’re marketing. Through sophisticated tracking systems, in just milliseconds a bid is processed (based on prior web behavior and other attributes) and the ad served in “real time.”

How does RTB enable programmatic marketing?

  1. Ads are served to people based on online surfing. A person using a search engine with the keywords “investment opportunities” or “new mortgage,” is known to be searching for these topics. Those individuals will see ads on certain websites (even those websites that aren’t in the investment or mortgage business) related to the search terms they just used. These are search retargeting ads.
  2. Another powerful feature of RTB is when an individual visits a site and moves on to other places on the web. When that happens, the user sees ads related to a site they just visited. Those are site retargeting ads.

But beyond ads being retargeted to someone based on behavior, programmatic marketing offers a third hidden opportunity for direct marketers. In this case, ads can be served to your customers without them having searched, or even visited, specific types of sites.

Some advertising technology companies will connect you with a third party firm who can match the names and addresses of your customers and known opt-in prospects to their online browsers (e.g. Internet Explorer or Apple’s Safari). The third party firm will a) remove personally identifiable information (called “PII”), and b) append to your customers or known prospects their browser ID. (To emphasize: personally identifiable information is removed from your list during this process. Codes are assigned to your list so that no names can be tracked back and the user’s privacy is maintained).

The result? Your ads can appear online to your customers or known prospects.

“Typically, around 50 percent of a direct mail list can be matched to online browsers,” says Frost Prioleau, CEO at Simpli.fi, an advertising technology firm. “This enables advertisers to communicate with their known prospects through online display advertising across a wide range of web sites, enhancing their brands and driving incremental sales.”

Looking at this another way, it means that whenever your customers or known prospects are on websites that show banner ads, your ad will be shown (or served) so your customers and prospects can click to a landing page with an offer reserved for them. You can even split versions of ads so customers see one ad, linking to a landing page for them, or you can use a different ad for opt-in prospects with a landing page and offer for them.

This is a significant hidden advantage of programmatic marketing for direct marketers. That is, your customers can see your ads without being retargeted based on search or sites they’ve visited.

Ads served to your customers or known prospects can be more powerful than only retargeting for the simple reason that a current (or former) customer will be reminded of your company every time they’re surfing websites that accept ads. If you have been marketing to them by direct mail, email, or other channels, this is one more opportunity for you to be on their radar screen when they may be researching competitors, or have simply reached the tipping point decision to get more information or buy.

Consumers Know They Are Being Tracked

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

Behavioral targeting, which enables marketers to deliver customized experiences and improved marketing
metrics, also runs up against consumer privacy concerns and calls for greater
transparency around emerging tracking and targeting techniques.

Based on
the results of the survey, lack of transparency may factor into privacy
concerns. In fact, 71 percent of online consumers are aware that their browsing
information may be collected by a third party for advertising purposes, but
only 40 percent are familiar with the term “behavioral targeting.” In addition, 57
percent of respondents said they are not comfortable with advertisers using
that browsing history to serve relevant ads, even when that information
cannot be tied to their names or any other personal information.

Meanwhile, a majority (91 percent) of respondents expressed willingness
to take necessary steps to assure increased privacy online when presented
with the tools to control their internet tracking and advertising
experience, and this, accoridng to TRUSTe and TNS, suggests a need for added education, transparency and choices
for behavioral targeting. Nearly two-thirds (64 percent) would choose to
see online ads only from online stores and brands that they know and trust
and 44 percent of respondents would click buttons or icons to make that
happen.

To the contrary, a similar proportion of consumers (42 percent) said they
would sign up for an online registry to ensure that advertisers are not
able to track browsing behaviors, even if it meant that they would receive
more ads that are less relevant to their interests.

What these results boil down to is that consumers say they want more relevant advertising, but don’t want
to be tracked in order to get it.

What is the key takeaway here? Transparency, transparency, transparency. Consumers today are more sophisticated and educated than ever before. They understand advertising, and in many cases, respond to it and even enjoy it. So don’t take chances–be a trustworthy and transparent company.