I recently wrote about the fate of media buying agencies in the wake of a move towards in-house Marketing activity. In that article, I cite programmatic buying as one of the drivers behind this shift.

I largely glossed over the term at the time, focusing instead on its impact on the market. However, I want to take a step back and dig into what programmatic buying really means – and how Procurement can help maximize the impact of every dollar pumped into their organization's Marketing machine.

Programmatic Buying: A brief synopsis

When we think about media buying in the traditional sense, we likely think first about media planning. Not all platforms are created equal, and media buyers spent plenty of time digging through media kits to identify which platforms best attracted their audience. Compare these outlets on their ability to draw eyes to your ad, and you can start to gain an understanding of how much bang for the buck you could likely get from each. The act of determining this worth and, ultimately, buying media may have come down to either conducting RFP initiatives in the market or conducting direct negotiations with the platforms.

This all takes time. Anyone who has ever been part of executing a marketing campaign can tell you – time is often a scarce resource.

Enter programmatic media buying. Programmatic buying means removing some of the manual elements of each step above and handing over control to an automated process. Programmatic software is used to automatically by ad inventory in real-time. This software uses algorithms to take parameters decided on by buyers and identify the best platforms for getting Marketing’s message out to the masses.

The benefit is pretty clear. The process takes little time to set up, buys are instant, and tweaks to a campaign’s parameters are lightning fast – allowing buyers to adjust purchases to maximize value at any given point during the campaign. This translates into faster implementations that can better maximize ROI while reducing Marketing spend by cutting out the media buying middle man.

So – how can Procurement help Marketing bring media buying in-house to achieve these results?

Selecting a Programmatic Media Buying Platform

There’s a range of programmatic media buying platforms out there to choose from. I’m almost hesitant to list some of the players in the market just because the information will be dated the moment I hit the “publish” button.

That said, the process of selecting the platform best suited to your organization remains constant.
First, there are some internal questions to answer. Evaluate the following to establish how well a move to programmatic buying would serve your organization.

  • Goals. First and foremost, understand Marketing’s goals. What is the target audience? More to the point, has Marketing determined what platforms best reach this audience? For teams interested in digital media, programmatic offers plenty of benefits. Beyond digital, programmatic is being used across a wider array of platforms every day – but it still isn’t appropriate for all. Consider placement to confirm if programmatic would be viable.
  • Granularity. One of the main draws to programmatic is the ability to get granular. Can Marketing’s creative make use of this granularity? Have they developed creative and calls to action to cover specific segments? Does this content vary by day of the week? Time of day? Programmatic will give them the ability to leverage such content.
  • Resources. A lot will hinge on Marketing’s ability to manage these tools. Are resources available to pick up programmatic and run with it? Are other resources going to be required?

Once you’re ready to go to market, there are several ways to evaluate different platforms.

  • Costs. Historically, media agencies often operate on a commission of around 15%, which could land somewhere at or below 5% of total media production and billing costs. Although the pricing structure may vary, any given structure would represent a per-campaign cost. Programmatic, as a software-based process, introduces some additional costs as well. In addition to markups on media spend, you could be looking at minimums, training costs, and setup costs. All of these costs should be fully detailed, compared, and negotiated.
  • Effectiveness. The value of programmatic lies in the ability to quickly, easily, and effectively segment and target your customers. Take a deep look at the capabilities of the tools you’re evaluating – do they meet your needs? Can the providers you are researching speak to how well their platform can reach your market, specifically?
  • Reporting capabilities. In the age of digital advertising, Marketing has more data than ever to use in decision making. Considering how pivotal this data is, and how easy digital marketing makes collecting it, your chosen platform should make metric tracking easier and more impactful.
  • Integration. There’s a lot of software integration concerns when it comes to modern day marketing. How well the platforms you evaluate “play” with other technologies in your organization are critical. You may need to enlist the help of some IT pros to fully evaluate this piece of the puzzle.

Moving Forward with Programmatic

As I mentioned in my original article, the curtain isn’t closing on traditional media buying agencies. There’s plenty of strategic value these agencies provide.

However, for Marketing teams seeking to gain more control and cut costs at the same time, programmatic is a viable technology to investigate. Procurement would do well to learn more about these platforms in order to best assist in choosing the right one for your organization.

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Brian Seipel

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