Top 5 Programmatic Advertising Challenges and Solutions

May 27, 2020

Marketing leaders aim to control spendings more precisely now than ever before. Regardless of whether a brand partners with a digital agency or has an in-house team, increased marketing efficiency and effectiveness are vital objectives marketers want to achieve with programmatic advertising.

Despite the economic crisis related to COVID-19, programmatic marketing continues to grow. Brands are either seeking ways to adopt programmatic media buying to their marketing strategies or are working to improve their advertising efficiency and effectiveness.

Why Is Programmatic Buying Worth The Media Investment?

Automation, personalization, scalability, and accurate measurement are the qualities that define programmatic advertising. With programmatic media buying, marketers can access a vast number of cross-device global inventory, significantly expand audience reach, control budget wisely, and effectively optimize strategy in real-time. As a result, media resources can be streamlined and focused on optimizing business goals to maximize return.

With the superior targeting, optimization, and reporting capabilities available in programmatic platforms, brands can build meaningful conversations with consumers across all channels at any stage of the sales cycle; from prospecting to the final purchase and beyond for repeat, valuable lifetime customers. 

As the industry continues to evolve, marketers need to overcome several challenges to achieve greater results. They might be looking for a decent partner or have the intention to move programmatic media management in-house. Either way, to drive better ROI, marketers need to know how to solve for their top programmatic marketing pain points and to make informed decisions. 

Based on our extensive experience working with large brands, our team outlined the top five critical pain points and solutions of programmatic ad buying.

Evaluate Ad Success With Incrementality

With incrementality measurement, brands can understand if their programmatic ad buying efforts have increased conversions, and if the achieved outcome was worth the investment. For example, incrementality helps marketers discover if a particular ad convinced the user to convert or if the user was going to convert anyway, and not worth the budget spend.

Evaluating the incrementality is vital in each stage of the marketing funnel. In prospecting campaigns, there might be a high audience overlap if ads from different campaigns are reaching the same users. In such a case, advertisers may divide targeting by channels among vendors to minimize the possibility of audience overlap. This way, when measuring campaign ROI, marketers can evaluate vendor performance and make budget adjustments to the highest performing campaigns to drive more conversions.

For retargeting campaigns, ads might continually reach the users that will convert anyway. To measure the incrementality for retargeting strategies, marketers can run incremental tests against defined KPIs to show the impact of various advertising tactics on performance.

As a result, marketers can assess campaign performance from different perspectives. They can reallocate the marketing budget to campaigns with high incrementality by reducing wasted ad spend on the ones that have low incrementality while simultaneously optimizing overall performance. The higher incrementality, the more effectively the budget is invested, and the greater the return.

Ensure Brand Safety

Brands need to be careful when executing global media buys. They need to assure that their ads appear alongside the appropriate and relevant content to their product or services. 

Programmatic platforms either have dedicated quality teams that eliminate the unsafe inventory or partner with digital ad verification companies. These companies provide brand safety solutions across channels and formats to maximize the preservation of the media buys. 

This way, brands can assure the protection of their reputation. A good reputation ensures increased brand loyalty and trust that drives more net new consumers, more sales, and, ultimately, better ROI.

Increase Efficiency With Frequency Capping

Frequency capping issues are common in programmatic advertising, especially for businesses that collaborate with multiple demand-side platform (DSP) partners and/or run campaigns through different channels and devices. So, it’s critical to set up a proper campaign frequency cap for all initiatives to control how many times an ad appears in front of the user on any given day.

Why does this matter? On the one hand, marketers aim to spend budget wisely and don’t want to annoy users with too many ads across devices and environments. Users have separate identifiers assigned to each device. This may lead to a poor customer experience and harm overall campaign performance. On the other hand, marketers still want ads to appear often enough throughout the cross-device customer journey to maintain strong awareness. There is no right or wrong solution; the balance between overexposure and not showing enough is a tactic that will boost the desired business outcome.

When frequency capping sets up optimally, brands can reach their consumers at the right time in the right place. This will have a positive impact on consumer purchase decisions and convince them to complete the transaction faster. The more sales your business drives, the better your ROAS.

Accurate Attribution Measurement 

When running programmatic campaigns, last-click attribution doesn’t provide brands with a full view of the advertising activities that, ultimately, impact their bottom line. Last-click attribution assigns the full conversion credit to the last channel interaction which blinds marketers from the real value of programmatic media and its true efficiency.

The customer journey includes multiple user interactions through different channels and each interaction has its own value and impact on conversion rates. 

When conversion credit is accurately attributed to each advertising channel, marketers can get insights into their programmatic media performance. They can discover how it affects conversions in the various stages of the sales cycle. 

As a result, marketers can assess the true value of programmatic buying within the customer journey and understand where they can reduce wasted budget and reallocate it to drive better business outcomes.

Get Ready For A Post Third-Party Cookie World

Programmatic ad buying is dependent on third-party cookies as it enables tracking a user’s digital identity across the web. A cookie is a piece of data saved in the web browser that allows websites to track user activity across domains. First-party cookies include users’ login details, preferred location, and language while third-party cookies undertake behavioral targeting, ad tracking, measurement, and in-depth analytics.

Programmatic advertisers target consumers throughout their buyers’ journies using third-party data. They also personalize the ad experience, execute campaign optimization, and measure campaign results based on third-party data. Safari and Firefox browsers have already blocked third-party cookie tracking, with Google Chrome soon to follow suit. In January 2020, Google announced the complete blocking of cookies by 2022. Disabling cookies will limit user tracking across domains and may potentially impact audience-based buying. 

Advertisers need to adapt to the new changes, following the privacy rules, and find transparent workarounds to reach desired audiences. There are some alternative approaches they can consider, like device fingerprinting, using alternative identifiers, or leveraging contextual targeting (keywords or topics).

Either way, user identification is an essential part of programmatic advertising. Cookie blocking may limit targeting options or affect attribution measurement and CPMs, which may eventually cause businesses a loss in revenue. 

Bottom Line

The COVID-19 pandemic makes business less confident about the future. In this regard, marketers intend to manage their spendings more carefully than ever before, aiming to achieve better results and with less. 

Programmatic media buying helps brands achieve automation, personalization, scalability, and accurate measurement. By understanding the pain points, and solutions, of programmatic buying, marketers can choose the right programmatic platform or partner. They can evaluate the quality of their actual media buys and ensure it is successful. So, this might be the right time for your businesses to reconsider its marketing strategy in preparation for post-pandemic recovery.

Ready to take your ads to the next level?  

DELVE is your strategic partner for site-side analytics, campaign management, and advanced marketing science. As experts in the Google Marketing Platform and Google Cloud Platform, DELVE drives client growth through a data-driven mindset that converts digital inefficiency into hard ROI.

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