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Top 7 programmatic facts in Hong Kong

The recent Google ad boycott is a wake-up call to the advertising industry. And that may not be a bad thing after all.

In the past couple of months, programmatic advertising became the hot topic of conversation across brands and agencies. Negative press surrounding programmatic often frightens marketers, but rarely offers a solution or gives credit to the positive aspects of the data and technology driven media planning and buying.

On the upside, automation provides more effective and efficient audience engagement by enabling true data-driven marketing through leveraging first, second and third party data. It offers marketers the possibility of reaching or converting in-market consumers across devices, while empowering brands to provide relevant content to their customers at the right place and time with efficiency and more effectively. In short, it is not all doom and gloom.

Today, marketers are faced with the challenge of connecting with their consumers in a meaningful way online. As the customer journey becomes increasingly fragmented, marketers need and are still learning to capitalise on the micro-moments and to deliver targeted content appropriately across multiple channels. And programmatic marketing can play a role in bridging the gap.

With this, here are my 2017 top seven programmatic facts to address the most common questions that marketers in Hong Kong ask us:

1. Programmatic is here to stay.

The traditional way that media planning and buying is done is no longer relevant in today’s fragmented and complicated market. Consumers have more choices, and can choose to block messages from brands that they are not interested in. There are more sites, diversified channels and touchpoints, so many competitors, countless campaigns running; it’s difficult to manage them all. Automation helps in making those choices more objectively and takes less than 200 milliseconds to do what a human does in several hours and days and does it more effectively.

According to a recent survey of advertisers conducted by Nielsen for Hong Kong Advertisers Association (HK2A), over 60% of marketers said they used digital advertising specifically for targeting and effectiveness of messaging and to expand their reach. This growing number of agencies and marketers investing in digital advertising would benefit from better returns on investment by learning and adapting programmatic advertising into their everyday media strategies.

2. Data is what truly powers programmatic activation.

In a programmatic environment, it is all about targeting the right audiences. Thus, the more data we have about those audiences and their preferences, the better. However, not all data is created equal and while quantity is important, so is quality. Using first and third party data, we can segment by specific audiences, meaning we can serve ads to the most targeted audience available based on their demographics, behaviour, location, interests, and intent. This combination of audience and placement targeting means campaign ads are only served when the best targeting combinations are available. This is a trend likely to continue as brands and agencies embrace the benefits that audience data can bring to their businesses.

3. Programmatic is not about “the cheap stuff” (inventory).

The good and often the best or premium “stuff” is now made available programmatically, and the ability to layer targeted audience data on top of this inventory enables both advertisers and publishers to achieve better results. Today, most leading publishers engage with programmatic activation to some level, and adoption continues to grow. Private Marketplace deals (PMPs) and programmatic guaranteed can be a fantastic addition to both branding and performance campaigns. These are invite-only auctions or negotiated deals where the buyer purchases a specific amount of inventory that they control using their demand-side platform (DSP). Publishers have quickly adopted these methods and have been keen on selling more of their premium inventory in a very efficient way.

For buyers, this brings data and premium inventory right at the top tier, along with complete control and a highly strategic approach to that of a direct insertion order based buy. Also, the introduction and excitement around header bidding is increasingly in demand bringing control back to publishers to an extent as they can now make their entire inventory truly biddable. This gives us the best of both worlds – access to high-exposure, premium content, with the flexibility of an auction and no commitment to spend.

4. Programmatic is not limited to digital formats.

TV, out-of-home (OOH), radio and even print placements can already be bought programmatically; it is only a matter of when all media players will get on board to incorporate programmatic technology. Format wise, we can access not just digital display but video, social, mobile, and native content. At Dentsu Aegis Network, we have already run successful test campaigns on programmatic linear-TV in Thailand, programmatic OOH in Australia, and have also tested programmatic advertising in magazines. The automation of media buying would remove inefficiencies in operations.

5. Programmatic commerce is game changing.

Programmatic commerce is the ability to set pricing based on both the potential and actual value of a customer, rather than a static ‘one-size-fits-all’ approach. It is automated and dynamic; and brings with it a host of opportunities for businesses to win and stay relevant in the digital economy.

6. You can’t have too many KPIs.

Pick the right metric to measure the campaign effectiveness: whether it’s CPA, viewability, cost per completed view (CPCV), and so on. Attempting to measure multiple KPIs across a single campaign is risky as they rarely correlate with each other in the optimisation process, having a negative effect on the overall campaign performance.

7. Programmatic can be brand safe.

We can apply several “safety layers” of brand safety to mitigate the risks of ads appearing next to undesirable content by blacklisting, whitelisting or deploy third party technology partners for pre-bid targeting solutions across viewability, ad fraud, traffic ad quality, and brand safety.

What should be the focus for the rest of 2017 and beyond?

As the great Albert Einstein echoed: “We have to learn the rules of the game. And then you have to play better than anyone else.”

We need to focus more efforts in educating the marketers and industry about how programmatic can help to drive actual business results, rather than just interim media key performance indicators – CPMs (cost per thousand or 1,000 advertisement impressions on one webpage) or CTRs (click through rates).

On the product and technology side, common standards are essential for our ad tech industry; viewability, brand safety, and digital measurement across devices and media have been priorities. To be fair, we have made progress establishing standards in taxonomy, ad formats, and creative guidelines but there is much left to be desired.

On the immediate to-do-list, we need to take a zero-tolerance stance on eliminating fraudulent ad traffic, combating malware, and focus on brand safety and viewability.

Industry leaders such as Google and Facebook are taking proactive efforts to tackle brand safety and content quality on their platforms. Locally, we also see industry bodies like the Hong Kong Digital Marketing Association (HKDMA) play an important role in accelerating education and investing the time and effort to address and share best practices.

Looking ahead, closer collaboration from all parties in our industry is critical to promoting a safe, effective, viable ecosystem.

By Jeremy Lo, general manager for Hong Kong, Amnet.

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