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ADVANCING MARKETING EXCELLENCE

ISSUE 8 :: 2014

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SHEDDING LIGHT ON SOME COMMON MISCONCEPTIONS

WHY MARKETERS SHOULD EMBRACE PMB

DIGITAL EXCLUSIVE

HOW PMB IS FUELING THE AUDIENCE ENGINE

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PROGRAMMATIC IS SCARY GOOD

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The 5 Myths

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B uzz has been building around programmatic media buying (PMB) for several years now —

and its advent has triggered almost as much confusion as it has hype. There’s even some debate over what actually constitutes PMB. For the most part, however, there’s general agreement that programmatic buying uses software layered over data to automate the ad buying process in order to ensure the right message is delivered to the right target consumer in the most cost effective way possible.

The one thing that has become clear over the past 12 to 18 months is that the use of programmatic software and algorithms to guide media buying

decisions is gaining momentum in the advertising community. According to the ANA/Forrester Survey Report “Media Buying’s Evolution Challenges Marketers,” released earlier this year, 54 percent of the client-side marketers surveyed said they have used PMB, with an additional 18 percent planning to add programmatic buying in the next year.Perhaps just as important is that 25 percent of the marketers in the survey said they had expanded their in-house capabilities to manage and implement programmatic buying, with another 13 percent considering such a move.

Brands large and small have figured out that by embracing programmatic strategies and combining them with

big data and big analytics, they have a potent combination that not only cuts costs and drives ROI but can provide better ways to deliver precise messaging at the perfect moment.

“Programmatic, for us, is about leveraging the tools that are available today and putting them together in interesting ways,” explains Thomas Hoehn, senior director of digital market-ing and social media at Walmart. “The customer is at the center of everything that we do and their shopping choice is important to us. Our programmatic efforts help us provide relevant messaging to our customers at scale.”

While a few companies like Walmart appear to have PMB well figured out,

By David Ward

Still in the fog overprogrammatic media buying?

Here’s the reality behind somecommon misconceptions

The 5 Myths

of PMB,DispelledDispelled

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many marketers and agency professionals are still on a learning curve to get a sophisticated understanding of what PMB is all about, and grasp how it can help their branding and messaging efforts.

Here, we dispel five common myths and misconceptions surrounding programmatic media buying.

1Programmatic Doesn’t Work as a Brand Awareness Tool

While not every brand is using program-matic as part of their traditional brand enhancement/awareness efforts, an increasing number of marketers are discovering that PMB presents a valuable

opportunity to do just that, especially as more premium content sites open their ad inventory for PMB.

Ron Amram, senior media director at Heineken USA, notes that, as an alcohol advertiser, he has to be very careful about where he advertises and who interacts with his brand. As a result, Heineken is almost exclusively focused on targeted messaging — but has found that PMB can play a positive role in its marketing.

“From a premium brand or upscale brand, programmatic was initially either not very effective or not an allowable way to spend your dollars,” Amram says. “But now that more inventory from premium content sites have become available on programmatic platforms and

the exchanges, we’re now able to buy regular or even highly desired media space in the programmatic world.”

Amram adds the ability to integrate data analytics into these PMB strategies is giving brands more ways to gauge how they and their messages are being perceived by consumers. “When you layer in data stacks on top of [PMB] — every-thing from brand awareness to intent-to-purchase data, even sales data — you can now measure how media are being effective in very specific KPIs,” he says. “It’s not just clicks or likes anymore.”

The move toward using PMB for brand awareness is already being felt at the agency level, adds David Staas, president of San Francisco–based NinthDecimal,

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which provides audience-targeting tools for traditional mobile and mobile video advertising campaigns. “Until recently programmatic was definitely in the realm of direct response,” he says. “But we’re hearing there’s a lot of pent-up demand on the branding side, not only with the agency trading desks but with the brand teams we work with. Many agencies are begin-ning to have that programmatic expert embedded with their branding teams.”

2 Programmatic Is a Digital Display Phenomenon

This myth may have actually been true as recently as mid-2013. But since that time PMB has migrated quickly to other ad platforms, including mobile, social media, and more traditional ad venues.

Even traditional brands like Walmart are finding creative ways to leverage PMB to build a sophisticated presence on social media and search platforms.

“We use programmatic approaches to deliver messages beyond display,” says Walmart’s Hoehn. “We find that it is the most effective way to message at the scale we require. For example, we have more than 4,000 Facebook pages — one for each store — and we augment messaging that comes directly from the store itself with automation. These can drive locally relevant product messaging based on location, weather, inventory levels, and more. Search is another area where we have very sophisticated methods,

developed by our Walmart Labs team, to optimize our spend in real time.”

To show just how creative companies can get with PMB, Hoehn adds that Walmart is doing some very interesting programmatic buying based on weather triggers. “This effort spans media channels that include display but also social, mobile, and cable TV,” he says. “We can be extremely precise in the delivery of messaging based on the analysis of weather patterns combined with our historical sales data.”

To their credit, many of the leading social media sites and search engines have welcomed programmatic, says Heineken’s Amram, citing heavyweights such as Facebook, Google, and Twitter, which are now using PMB as a way to prove their worth as advertising platforms.

“Though they try to control it, they have completely embraced programmatic — and the data stack,” Amram explains. “They’re almost fearless in how they allow advertisers to measure the effectiveness of the advertising on their platforms, where traditional media companies would be scared out of their minds to do what these companies are doing. You can get a report that shows you how your media is doing on their platform and you have the ability to immediately turn it on or off — but more and more advertisers end up spending money on these platforms because they can prove their effectiveness.”

David Jakubowski, the new head of Facebook’s advertising divisions, adtech and Atlas, agrees, noting, “Programmatic

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is leveling the playing field, but most importantly, it drives efficiency and performance regardless of budget size. It lets advertisers iterate much faster, within seconds, ending campaigns that aren’t performing and doubling down on ones that are. With programmatic, measuring ROI is real time and actionable. These are all things that make advertisers’ jobs easier and their marketing more effective.”

And it isn’t just digital. PMB, combined with data, is already pushing its way into traditional ad venues and is expected to affect the advertising landscape in TV, radio, and even print.

“The obvious one is TV,” Amram says. “Because if you have excess supply and you go down the programmatic route you can potentially find a way to benefit and get advertisers on board and potentially measure the effectiveness of your ads and show you’re very valuable. Programmatic does give you a better understanding of where your advertising should go and whether that should be a digital stream or a television stream. So we’ll quickly learn what stream is effective and where we want to spend more of our money.”

3 Programmatic Is Only About Cost Savings

This myth also may have had some truth initially, as marketers found that using PMB cut their media buying expenses, which ended up boosting the ROI of their ad spends and making their bosses happy.

Heineken has used PMB to ensure its messaging hits adult audiences, while Walmart uses programmatic to serve relevant messages on Facebook based on location, weather, store inventory, and more.

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W hen Universal Pictures sought to generate awareness for the home release of ParaNorman, the critically well-received stop-action ani-

mation movie that had generated more than $52 million at the U.S. box office, it turned to London-based Adfonic (which earlier this year changed its name to Byyd) to develop an effective media-buying strategy targeting parents, teens, and fans of horror, comedy, and animation.

“The ParaNorman campaign was a classic example of using program-matic to improve efficiency and therefore boost ROI,” explains Victor Malachard, Byyd’s cofounder and chief executive officer. “Where other models, such as blind ad networks, fail, programmatic can continue to grow because [when plugged into a mobile Demand-side Platform (DSP)] clients gain huge reach instantly by simply plugging into exchanges, at which point they see all requests and can decide which ones to bid on. This transparency means they can be more effective by adapting cam-paigns in real time.”

Malachard stresses that programmatic buying alone wasn’t responsible for the success of the ParaNorman campaign; great creative in the form of rich media video from Universal Pictures was edited both for mobile and to reduce the time from impression to conversion. Each ad page for ParaNorman provided very clear branding and was designed so that users knew exactly what to do next: either watch the video or visit the iTunes store.

The decision to go with mobile content in a rich media format was crucial in helping consumers quickly grasp why ParaNorman was a movie worth renting or downloading, Malachard points out, adding that superb creative combined with PMB proved to be an explosive mix.

“When we performed post-campaign analysis, it showed we achieved click-through rates of 40 percent, stronger than average for mobile — and that was independently confirmed,” he says. “And our cost-per- engagement figures were less than a quarter of typical desktop campaigns. These are compelling bottom-line figures that prove programmatic mobile buying works.” — D.W.

Programmatic Is

SCARY GOODHow Universal Pictures used PMB to promote the home release of ParaNorman

But as an added bonus, many market-ers are finding that PMB along with data analytics is helping them better reach the exact target audience they want. As Florian Gmeiner, head of marketing for the Americas at Lufthansa, notes, “Ultimately, programmatic will increase the effectiveness of Lufthansa’s digital efforts because the use of the technology and data allows us to target the audience we want to hit. I see programmatic as an important piece of the mix but feel it needs to earn its way into truly and effectively delivering against actual audiences, not only computer reported ones.”

Hoehn of Walmart agrees that PMB can’t simply be judged by its ability to reduce media buying costs. “As we optimize we may actually spend more, not less, to reach the right audience. It is no longer about large-number impres-sions — it is about the right impressions,” he says. “We are in an age where we can absolutely optimize our spend, but, more importantly, deliver messages that are relevant and helpful to our customers.”

4Programmatic Will Mark the End of the Traditional Ad Agency

Earlier this year reports began circulating that CPG heavyweight Procter & Gamble (P&G) would begin to make upwards of 75 percent of its digital display buying through programmatic channels.

While P&G did not confirm or deny the reports, the rumors alone — combined with news that both Kellogg and Apple would bring more of their advertising in-house — triggered real concern that programmatic would end up reducing the role traditionally played by media buyers and ad execs.

Some of those worries are valid, but most are premature in that they ignore the resiliency of advertising agencies and media buying firms, which have long proven they are capable of adapting to changes in the ad ecosystem.

“The industry is at an interesting juncture,” Hoehn says. “The media landscape is evolving in this age of big

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data and those that don’t change and adapt, well ... let’s just say they won’t be sustainable.”

Hoehn goes on to say there is plenty of room for all kinds of new professionals in this industry and that even with PMB,

brands will continue to need and seek out great marketing insight. “If you aren’t dealing with capable people, processes, agencies, creatives, analysts, etc.,” he says, “‘programmatic’ can also mean that you deliver the wrong message to the wrong people at scale and, before you know it, your campaign budget is gone.”

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Brian Wieser, senior analyst at New York–based Pivotal Research Group, also cautions against reading too much into some of the moves by individual brands. “Agencies are always trying to take on more analytical and strategic roles, but just because marketers can bring programmatic trading in-house does not mean that it ends up being that way — or that the advertisers who have gone through this process will keep things that way,” Wieser says. “There are still many challenges to be managed, and at the same time, there will be bulk deals for inventory between agencies and publish-ers which incorporate programmatic execution at lower prices than many of these marketers could get on their own.”

Lufthansa’s Gmeiner suggests that the advent of PMB could even become a catalyst for a new era of collaboration among the players that make up the advertising world. “The media agencies, creative agencies, and technology providers need to sit at the table much more often,” he says, adding that inside the brands, programmatic and data analytics will bring the sales and marketing departments much closer together. “The

creation of smart, strategic, well-defined campaigns that live off constant optimiza-tion will be every brand’s goal.”

5Programmatic Damages Premium Publishers the Most

Initially grumbling that PMB was putting downward price pressure on their ad inventory, top-tier media companies — including The New York Times Co. and Washington Post Co. — have all now hired programmatic ad executives to guide their sales staffs in how to take advantage of the rise in brands using PMB.

But several of the brand executives and advertising experts we spoke to suggested that PMB will actually separate out what is truly premium content from the also-rans.

The hard reality, Wieser explains, is that, “some ‘premium’ sites aren’t really that important, and their pricing will be constrained. Others, which are perceived to be premium, will be fine.”

Gmeiner notes that with larger premium ad inventories now available programmati-cally, more brands are looking to PMB. But, he stresses, that won’t push market-ers to completely abandon other programs like sponsorships that partner the right brand with the right top-tier content.

“The proliferation of programmatic offerings from more premium publishers will become a bigger part of the invest-ment strategy, but by no means will this diminish the importance of custom content, high impact executions, and sponsorships,” he says. “So the need for having a brand message in a high-reaching, contextually relevant environ-ment will continue.”

PMB could play an indirect role in improving the content available to consumers or in how that content is presented. “Premium content destina-tions should certainly be able to continue if they pay attention to the choices their audiences are making. If they can deliver an audience that is well defined and accessible, I don’t see an issue,” Hoehn says. “Great content will always be a draw. Marketers will have interest in that and will want to participate.” ■

Lufthansa is one of many brands beginning to use programmatic media buying to boost the returns on its digital marketing efforts.

PMB could play an indirect role in improving the content available to consumers or in how that content is presented.

PROGRAMMATIC FUELS THE AUDIENCE ENGINE

PROGRAMMATIC FUELS THE AUDIENCE ENGINE

How PMB is empowering marketers to connect with the right consumer every time

By Justin Evans

P rogrammatic media buying (PMB) appears extraordinarily fragmented compared to buying

digital media directly from a publisher. That’s because your campaign runs on impressions from publishers across the web, on every device.

The breadth and diversity of this inventory can be quite intimidating. How do you make sense of this fragmen-tation, take control of your buy, and leverage PMB to your best advantage? The answer: through your audience.

Finding the right audience is at the heart of PMB; it’s the element that unifies the buy. When programmatic is executed well, it enables you to precisely reach only your desired audience, minimizing wasted spend. You’ve worked hard and allocated enormous resources to figure out who your consumers are. Buying programmatically simply empowers you to engage them — and only them — with your message.

The Evolution of Audience TargetingTo understand how targeting your audience across content can help drive conversions, let’s go back to its roots. The concept of audience targeting comes from direct marketing, where consumers’ relevant characteristics (like automobile registry data on who owns a luxury car, or aggregated credit information about who is a good risk for a credit card) were linked with their contact information (like postal addresses) to form a database of consum-ers more likely to be interested in a brand’s products. >>

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The result may have been annoying — junk mail in the mailbox — but it was delivered thoughtfully, with metrics like “open rate” that allowed marketers to use the channel effectively and efficiently.

Around 2008, marketers began incor- porating audience targeting — from offline and online sources — into banner ads.

How did they do it? Data companies created match networks that linked their consumer databases to browser cookies. The match networks consisted of web publishers who, for a fee, anonymously linked data attributes such as “owns a luxury car” to browser cookies.

In 2010, after the Interactive Advertis-ing Bureau established video standards for the digital ecosystem, these data-targeting assets could also be deployed for digital video, or broadband, advertis-ing. Extending these capabilities into TV and mobile was more difficult.

In the years between 2008 and 2013, several cable and satellite companies adopted advertising technology that enabled TV targeting at a household level. While the process and technologies have matured, the reach of these technologies

is still limited to some 20 million house-holds, a fraction of the 116 million TV households in the U.S.

Mobile was a notoriously difficult problem for marketers focused on audience. The scramble of web and app ad inventory was further complicated by the different standards of the Apple, Android, and other operating systems. Only since (roughly) 2012 has a targeting technique known as “statistical IDs” allowed marketers to extend their broadband audience targeting capabili-ties into the mobile ecosystem.

In 2014, marketers now enjoy a wide scope of opportunities for audience

targeting across online display and video, television, and mobile. Virtually all these screens and formats are accessible to PMB.

Sources of Targeting DataThe types of information available for targeting are as nuanced as humans themselves. Information can come from several sources:• CRM data, sourced from a brand’s

own databases of offline purchases or e-commerce shopping and browsing.

• Past purchase data, aggregated across sales channels by third-party companies.

• In-market data that either models past purchase behavior (“it’s time for household XYZ to buy another sedan”) or collects signals from digital shopping and product research that indicates an impending purchase.

• Rich demographic data is also avail-able both from offline and online data companies. This information covers more than age and sex, to include factors like ethnicity, income, credit-worthiness, education, etc.

These data sources combine to paint a rich portrait of an audience who, if they had been targeted through multiple publisher buys, might be prohibitively expensive to reach. Yet, purchased programmatically, a brand’s chosen audience may be aggregated into a single buy, and made accessible through technology as if they were the audience for a single publisher or network.

Challenges of Audience BuyingWhile this process has evolved greatly in the past six years, there are still challenges. First, the data you use is only as strong as its source, and virtually any source will have flaws: data may be stale or outdated; it may be modeled and hence contain a margin of error; and through the many handoffs between the data source, match partner, and media platform, it may be matched improperly.

Second, data may lack scale, which will inhibit reach. Database matches are prone to match rates of 30 percent on the

low side and 75 percent on the very high side, so that erosion will take place.

Managing Audience DataBrands should employ certain strategies to manage the challenges and capture the opportunities of audience buying through programmatic:• Validation. To manage the risk of

inaccuracy, brands should test their data providers using a market research company or panel, and compare the results of different providers.

• Modeling for Scale. Brands should choose technology partners who have the capability to build machine-learning models to expand the reach of the data they use outside the foot-print of the standard match partners.

• Consistency Across Screens. Now that an element of consistency is possible across television, desktop, and mobile, brands should seek out partners who can provide the reach and coordination afforded by new technology.

Employing these tactics, your PMB should enable your ad to run in diverse types of content, platforms, and devices, so you can find the luxury auto owner while he’s researching his next car on his tablet, the stay-at-home mom who is searching for the perfect vacation destination on her laptop, and the millennial looking at different lipsticks on Sephora.com on her iPhone. This is how you programmatically reach the right audience at the right moment — anywhere and everywhere they are. ■

Justin Evans is the chief strategy officer at Collective. Email him at JustinPMB@collective.com.

Finding the right audience is at the heart of PMB; it’s the element that unifies the buy.

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P rogrammatic media buying (PMB) can make ad purchasing, targeting, and delivery simultaneously more

granular, efficient, and scalable, removing vendor-by-vendor negotiations and cum- bersome ad operations. But this power and flexibility come at a price. If you’re not careful, you could be clicking ad dollars into the void without really knowing what you’re buying. In short, programmatic buying can be problematic buying.

The truth is, to realize its promised ROI, programmatic requires at least the same level of attention and commitment of resources as traditional media buying. Your team will need to work diligently and strategically to ensure that you’re actually receiving the quality of impressions that you’re paying for, and not pouring money into a black hole of click bots and fraudulent impressions.

The Cost of EfficiencyDue to the lack of policing in an open exchange (i.e., when buying program-matically), you’re exponentially more likely to log impressions that aren’t viewable and/or are based on fraudulent traffic.

According to Incapsula’s “Bot Traffic Report 2013,” non-human traffic makes up more than 61 percent of all website activity. Clearly the resulting fraud is

incredibly damaging to advertisers and the ecosystem as a whole. While large ad buys can be initiated easily and instantly, so can large-scale manipulation.

Clarity Is CrucialHow can you combat the dangers inherent in PMB? You must be on your game and pay attention to exactly what is being promised versus what is being delivered.

Demand that third parties provide detailed insight and reporting regarding impression delivery. Are your ads reaching their intended target in a fully viewable context? Or are there suspicious geographic, chronologic, or behavior patterns that indicate potential abuse?

You can employ a specialized verifica-tion vendor, such as Integral Ad Science for display ads or Vindico for video ads, to help ensure that you’re getting impres-sions with quality that matches the cost. Even when relying on verification vendors, your team must still diligently analyze data at the log and impression level to ensure that your ads are running on the correct domains and that you’re truly hitting your goals.

Follow the MoneyProgrammatic buyers also need to be more aware of the economics of the

transaction. Part of what makes program-matic appear “automatic” are the many middlemen involved. In every transac-tion, there are between three and 10 of them (e.g., exchanges, demand-side platforms, ad servers, verification vendors, data vendors, etc.). Each takes a cut of every programmatic dollar and they get paid before the publisher. The percentage that eventually reaches the publisher will give you a clue about the quality of the impression. If one publisher receives 30 cents on the dollar and another receives 50 cents on the dollar, all other things being equal, the first publisher’s impressions are likely lower quality — even though you might be paying exactly the same amount.

By now, you’re probably beginning to realize that PMB isn’t as hands-free as it might seem. None of this is meant to scare advertisers away from embracing the opportunity that PMB offers, but only to serve as a reminder that with power comes a responsibility to engage proactively and strategically with third parties, or risk wasting your time and money. ■

Travis Lusk is vice president, head of video at Collective. Email him at TravisPMB@collective.com.

PMB may involve automation, but diligence and hard work are still required to get it rightBy Travis Lusk

How to Stop Programmatic from Being Problematic

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In its short life, programmatic media buying (PMB) has attracted more attention than almost any form of

advertising this century. Programmatic spend this year is

projected to reach $7.4 billion, accord-ing to Magna Global. Just three years from now it will jump to $17 billion and, by that time, is expected to drive the vast majority of display, video, and mobile ad buys.

Why has digital programmatic buying commanded such popularity — and money? Through the use of the technol-ogy that is at the heart of programmatic, advertisers have unprecedented power to efficiently purchase the audiences most likely to become consumers.

The Digital EcosystemTo fully leverage the PMB trend, you have to understand the three different ways to buy digital media:1. Publisher Direct. You pick up the

phone and call your rep at a publisher, like ESPN.com, and

negotiate a price for a set number of impressions. This method of buying is completely based on content. In other words, you’re determining where to buy ad space based on which content the ad will run adjacent to, or within, and you pay a premium for the placement. One reason that brands may be content-focused is to capitalize on the halo effect, when consumers have a positive bias toward products because they’re advertised within highly regarded content. And content can serve as a proxy for an audience, meaning that the brand aims to find a concentration of people within a certain demographic who go to a particular site or watch a specific piece of content. For example, if you’re a sneaker manufacturer, you might want your brand to be associated with sports content and buy space on ESPN.com. Another reason you might buy space on ESPN.com is because there’s a

high concentration of your target demographic, say, men ages 20–34, on the site.

2. Ad Network. You can buy impres-sions from an ad network that aggregates content across different publishers. You still buy based on a set price per thousand impressions (e.g., CPM) but the ad network might not fully disclose all the sites that wind up on the buy. On an ad network you can target your buy based on either content or type of person. The sneaker brand, for instance, might buy impressions in sports-related content across the network or it might buy impressions that are viewed by men ages 20–34.

3. Programmatic. You can use programmatic technology to buy the right audience at a more efficient price. Again, you can target by individual or content, but the process is very different from buying through an ad network and has distinct advantages for advertisers. TH

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By Adam Harris

ProgrammaticAD BUYING FOR THE DIGITAL AGE101

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Programmatic RevealedProgrammatic buying operates on an exchange that’s similar to a stock market. Ad impressions (stocks) are available to be bought and sold and the price is negotiated between the advertiser (buyer) and publisher (seller) on the exchange.

The buying process is called real-time bidding. Advertisers bid against each other in real time, in an attempt to purchase — at the lowest possible price — impressions viewed by their desired audience or within their desired content. (See “A Step-by-Step Breakdown of Real-Time Bidding,” below). The real-time bidding process happens billions of times per day across any number of public and private exchanges. Public exchanges encom-pass many publishers across the web and are open to all advertisers. This would include Google Ad Exchange, Yahoo Ad Exchange, and Adap.tv Exchange, for example. In contrast, in a private exchange a limited number of advertisers are included in the auction and bid for only one publisher. That publisher is either a single brand like NYTimes.com or an umbrella media company like Time Inc. that encom-passes many different web properties.

Price, Precision, and Cross-Screen PowerBuying programmatically exponentially increases the efficiency of your ad buy. How? Price, precision, and cross-screen power. First, the price of each impres-sion is driven down by exposure to the open market. You only pay what the market is willing to support versus what the seller charges. Second, because you can target based on complex audience

characteristics and behavioral data, you connect with more of the people most likely to convert. Last but not least, you can buy programmatically across all digital screens — from desktop to mobile — and reach your audience wherever they are.

The Business OpportunityBrands that embrace programmatic should expect to get more value from their digital budgets as they enhance their publisher and network spend with even more targeted and price-efficient use of funds. This should please the chief financial officer. To capture the full value, however, a thoughtful strategy should precede investment.

Things to ConsiderUnlike publisher spend, programmatic media is all about the numbers. There is no homepage takeover to look at or microsite to visit. Brands embracing programmatic should have quantifiable success metrics, preferably based on past experience. What is your historical average CPM paid by ad format? What is

your historical cost per conversion, or cost per thousand in-target impressions? Brands need to set benchmarks and track them relentlessly.

Advertisers using programmatic trade control over their money for the invest-ment required to maintain control. Does your company want to license program-matic media technology directly? Would you prefer a managed service where a vendor acts as your general contractor? Or will you outsource the work to your agency? With each level of control, you add fixed costs in hiring experts, but you gain transparency and, in many instances, more efficiency in media pricing.

Mastering the basics of programmatic means that you can tap into its power to streamline your ad buy and reduce wasted spend. You can focus your efforts more and more efficiently on those who are most likely to be interested in your products. That’s the pragmatic power of programmatic. ■

Adam Harris is vice president of product strategy at Collective. Email him at AdamPMB@collective.com.

A Step-by-Step Breakdown of Real-Time Bidding

1. You go to an exchange and bid on inventory that is available from publishers.

2. All advertisers are bidding at the same time.

3. The advertiser willing to pay most for an impression wins that impression.

4. The winning advertiser typically pays the second-highest price, meaning that if you’re the highest bidder at $100 and the second highest bid was $2.50, you win and only pay $2.50.

— A.H.

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Digital Exclusive

When Best Buy wanted to highlight its back-to-college offers, the brand looked to PayPal Media Network, a company that focuses on leveraging location technology and data, to create a nation-wide campaign. Using PayPal’s network to reach an audience of more than 100 million U.S. consumers, they directly targeted parents and students.

Working with a $210,000 budget, the companies set to work on a 16-week campaign that created a unique and seamless shopping experience through real-time inventory feeds, mobile express checkout, and geo-fencing to target potential customers.

How It WorkedThe use of geo-fencing, a location-based service that allows marketers to target consumers within virtual barriers around a physical space as specific as a store or as broad as a neighborhood, allowed Best Buy to specify and engage with its

target audience. Best Buy and PayPal applied this technique to both the brand’s stores and those of Best Buy’s competitors and were subsequently able to reach nearby consumers in order to grab consumers’ attention and usher them into the product aisles.

ResultsConsumers saw this information in banner ads that were supplemented with real-time inventory feeds, selected based on Best Buy’s specifications, which showed available products and pricing for the stores closest to them. Those who clicked on the ads were automatically directed to a landing page and given the option of making a purchase through PayPal Mobile Express Checkout, a service that simplifies the checkout process for mobile consumers.

The success of the campaign was determined by three metrics: Click-through rates were used to measure ad effectiveness, landing page engagement measured post-click user experience, and sales were measured against the actual purchases related to the campaign made using the express checkout feature. While total sales weren’t made available, the campaign garnered 41 million impressions across PayPal’s network, with one percent of users who saw the banner ads clicking on them and three percent of those who clicked making a purchase. ■

Good Fences Make Good Offers

Geo-fencing, one of the most popular geo-targeting techniques, is a location-based service that uses global positioning systems (GPS) or radio frequency identification (RFI) to define geographical boundaries. By determining the exact location of consumers when they enter a geo-fenced area, marketers can send targeted and time-sensitive offers. Here are six tips on geo-fencing, adapted from PayPal Media Network, that marketers should consider:

1. When creating a geo-fence, setperimeters within five minutesof travel time from the targetlocation to keep local messagingrelevant.

2. Create campaigns first aroundyour primary location, and thentarget other points of interestrelevant to your potentialconsumers (where theconsumers are).

3. Consumers have to opt-in toreceive alerts, so be transparentand useful.

4. Create brief, location-relevantmessages with a clearcall-to-action.

5. Use location data and leverageother parameters (like a localevent or the weather) andfeatures (such as inventory feeds)to increase the relevancy ofmessages and enhance targeting.

6. Determine the metrics you wantto use to measure your successand track them to ensure you aregetting the desired results.

— U.O.

How Best Buy became a back-to-college destinationBy Urey Onuoha

Psst, Over Here

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EDITORIAL DIRECTORKen Beaulieu

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ASSISTANT EDITORUrey Onuoha

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