Programmatic advertising for Small to Medium Enterprises

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Programmatic advertising for SME’s

In today’s increasingly competitive marketplace, a reliable and consistent method of supply of new customers is truly the golden egg. If you are a small or medium enterprise it is on you to ensure that you are acquiring customers in the most efficient manner both from a time and cost perspective.   Programmatic advertising not only meets both of these standards but also provides greater control over the potential customers viewing your ads online. This last point is crucial. Ultimately the precision of the method used for determining who your ads are shown to correlates directly to the likelihood of that person converting to an actual customer.

What is Programmatic?

Programmatic advertising is ineptly named and is likely to cause confusion for the majority of business owners, and will probably cause a sense of impending doom for those who are less tech savvy. Alas, do not be deterred. Programmatic simply refers to the automated purchase of ad impressions, nothing more nothing less. So for example, if you hire an advertising agent to purchase ad impressions on behalf of your company, based on your requirements the ads will be purchased via automated technology from a website with available space to place your ad. There are two principal forms of programmatic advertising, real-time bidding (RTB) and programmatic direct.

Real Time Bidding (RTB)

Real time bidding essentially involves the automated purchase of ad impressions across numerousplatforms via an open bidding auction. Imagine a person is visiting a website which attracts 30 year old females, with an interest in trainers, who live in Germany, who are single, who work in finance… you get the idea. If the owner of that website is using programmatic software then available ad impressions can be added to an open advertising marketplace in real time. A buying agent also using the appropriate software, will through automated processes have the ability to purchase that ad impression by bidding along side other agents on your behalf. If you are successful in the bidding auction then the relevant real time visitor will be shown your ad. This all occurs in thousandths of a second and allows ads to be purchased in real time across many platforms. It is essentially a type of automated matchmaking between those seeking to buy ad space and those seeking to sell, with the benefit of the immediacy which programmatic delivers. It is also possible to gain access to private marketplaces. This is when high level advertising publishers sell ad impressions within an auction environment on an invitation only basis. This allows publishers to have tight control over the ads placed on its platform, and gives a stronger assurance to the buyer in relation to the environment in which its ads will be displayed.

Programmatic Direct

‘Programmatic Direct’ involves an automatic process which allows the party seeking to place an ad to purchase the impression directly from the seller of the available ad space. There is no auction and is akin to a typical purchasing transaction, in this case the product is the ad impression. An advantage of this method is that it provides a guarantee for those looking to advertise, in terms of both whether and where the ad will be displayed. Typically the cost of impression (CPM) is agreed between both parties and the ongoing tracking of the particular ad campaign is automated. The level of automation can depend on what the publisher chooses.

SO WHAT?

Now you understand what programmatic is all about, you might find yourself asking what does this mean for me?

Simply put it means that you can target your potential customers with increased accuracy. This is due to ever improving algorithms designed to deliver your ads to the person not only most likely to have an interest in what ever it is you are selling, but also to actually convert that person into a customer. The technology also delivers increased transparency which provides for a better understanding of the ad buying process. This gives you greater control in terms of deciding the context or platform on which you want your ad displayed, ensuring your brand identity remains intact. Perhaps the highest value dimension to programmatic is the sheer speed at which the entire process takes place. The miracle of the software allows you to insert your product directly in front of the right person and connect with your potential customer at a crucial moment in time, ensuring your impressions result in the highest possible conversion rate. This point should be carefully considered by all SME’s when engaging in an advertising campaign, as ultimately wasted ad impressions are just that, and not only impact your bottom line but can also effect the pace of growth of your business.

contact us to see how we can generate new revenue streams for your business.

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Why are the top advertisers in Ireland shifting their budgets to mobile?

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‘Mobile adspend in Ireland grows from €9.9m in 2012 to €231m in 2016’ & ‘total digital adspend grows from €148.2m to €445m in the same four year period’.

The development of technology has provided consumers with a device that only Mork and Mindy could only have dreamt of, the mobile phone, aka – the new best friend. This tech change in society has a major influence on how all advertisers are targeting their customers, annual adspend figures showing the shift of marketing budget from traditional media to digital, with focus on mobile. This is where customers can be found and communicated to in an engaging and relevant manner with little or no wastage.

The IAB Ireland, the trade association for digital advertising in conjunction with PwC, conducted the latest research to provide us with the most accurate information when measuring digital ad-spend in Ireland. The produced report includes spend from media agency buyers, brands direct, digital sales houses, and various publishers – local and international in Ireland for the entire year of 2016.

The findings may surprise some, the exponential growth of mobile consumption, with social media and video on demand evident drivers, and advertising spend following digital consumption with significant year on year growth figures.

The IAB Ireland PwC Online Adspend Study for 2016 (Jan to Dec) reports ad revenues of €445m compared to €340m in 2015, a significant growth of 31%.

Core Media estimates that in 2016 Google, across all its platforms, will generate around €175m on the island of Ireland alone. “Some 16pc of all advertising money spent on media in Ireland is spent on Google,” notes Alan Cox, CEO of Core Media.

 

Key findings:

  • Mobile Adspend in Ireland is up 63% from 2015, representing €231m, 52% of total digital adspend – the breakdown is 55% across search and 44% on display
  • Display advertising holds a 44% share with a spend of €197m – an increase of 44% on 2015
  • Paid for Search Advertising has grown 25% YOY with a 49% share of total online adspend at €219m in 2016
  • Social Media across Desktop & Mobile is up 133% on 2015, a total spend of €114m, 25% of total digital adspend
  • Video on Demand (VOD) saw an increase of 91% on year, a total of €47m
  • Native advertising total spend in 2016 was €82m – representing a growth of 82% on 2015
  • Classified Advertising represents 6% of spend at €29m in 2016.

 

Advertisers follow consumption, so what is driving digital growth in 2016?

  • 80% Irish adults use smartphones, an increase of 75% on 2015
  • Irish marketers planned to spend 21 – 50% of total marketing budget on digital in 2016
  • VOD: 61% of Irish adults spend over four hours per week watching video streaming content
  • 59% of 15 – 24 year olds watch more VOD than TV
  • 24% of adults visit a brands site after watching a video compared to 20% who search online for the brand.

 

Top 5 spenders on desktop & mobile devices by advertising category & contribution to total digital spend:

  1. Finance = 18%
  2. Retail = 14%
  3. FMCG = 12%
  4. Telecomms + Utilities = 11%
  5. Auto = 10%

 

 

 

Source: IAB Ireland, Independent.ie

 

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Video: An essential tool for advertisers, agencies and media companies

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Once upon a time, the internet was an ocean of text. Companies’ websites consisted of text content and, if you were lucky, the occasional stock image.

Whether you’ve adapted or not, we are now in the video age. And it’s fair to say that competition for consumers’ attention has never been fiercer.

This is an opportunity, though, not a crisis. Video communicates ideas with greater efficiency and – if done right – panache than text. The right video content – creative, distinctive, audience-appropriate – produces higher engagement rates, profile, SEO results and dwell time than text.

Video is steadily overtaking text on mobile devices; and as a consequence, it is becoming the most ubiquitous and valuable communication tool for your company.

Is video becoming the most powerful online marketing channel?

Statistics say so…

 

According to the latest report from Cisco Visual Networking Index which was published on 27th May 2015:

“Globally, consumer internet video traffic will be 80% of all consumer Internet traffic in 2019, up from 64% in 2014. This percentage does not include video exchanged through peer-to-peer (P2P) file sharing. The sum of all forms of video (TV, video on demand [VoD], internet, and P2P) will be in the range of 80 to 90% of global consumer traffic by 2019.

Internet video to TV doubled in 2014. Internet video to TV will continue to grow at a rapid pace, increasing fourfold by 2019. Internet video to TV traffic will be 17% of consumer internet video traffic by 2019, up from 16% in 2014.

Consumer VoD traffic will double by 2019. HD will be 70% of IP VOD traffic in 2019, up from 59% in 2014.

Content delivery network traffic will deliver over half of all internet video traffic by 2019. By 2019, 72% of all Internet video traffic will cross content delivery networks, up from 57% in 2014”.

 

How do I target these potential customers online while they watch video content?

 

When it comes to video advertising there are certain challenges that ad agencies, advertisers directly and media companies face.

 

The scarcity of premium or quality content seems to be the key indicator for advertising agencies not allocating a greater budget to video marketing. Ad agencies find it challenging to purchase media across video due to the lack of supply of quality content.

 

Publishers that provide rich media and long tail video content benefit from this and can charge accordingly.

 

Ad agencies and advertisers are resorting to use “outstream” video formats that overcome the obstacle of poor quality content. Outstream ad formats allow advertisers deliver video advertising without requiring premium video content to appear against. This video ad type generally appears within the body of the published content, as a user scrolls down the page.

 

A study conducted by Forrester Consulting on behalf of Teads, May 2015 surveyed over 500 ad agencies and advertisers with over 100 publishers. The results provided some interesting insights.

 

Advertising agency

“What increase will your clients’ spend on digital video advertising change in the next two years?”

 

Significantly increase   31%

Moderately increase    39%

Stay the same             12%

Moderately decrease   8%

Significantly decrease  0%

 

Premium inventory isn’t enough, advertisers and agencies want better targeting and measurement of their video ads’ impact.

 

 Advertiser

“Will your spend on digital video advertising will change in the next two years?”

 

Significantly increase   25%

Moderately increase    52%

Stay the same             15%

Moderately decrease   7%

Significantly decrease  1%

 
‘70% of agencies and 77% of advertisers expect video budgets to increase in the next few years’ ‘Media companies are driven by the unique enticing features’
Media companies

“What is the main benefit of video

advertising for your brand?”

Premium means higher CPMs    44%

To provide more engaging advertising content to our customers         29%

Allocation for budget from traditional

media budgets      19%

Reaching online audience that tv cannot reach    7%

 

 Media brands face barriers:

 

➔     Costs of producing quality long form content puts pressure on the return on investment.

➔     Having video for specific content is resource and cost draining

➔     The lack of quality inventory in the market place

 

 

 

How can advertisers increase ad engagement levels? Is it choosing the right content or is it about having compelling creative?

It is certainly a combination of both. The advertising creative needs to be strong enough to capture the user’s attention, in their time.

With an industry that has become saturated with advertising and cluttered with competition, it is imperative that the creative is of quality content, served to the user at the right time within the relevant environment.

Advertisers must not forget that media consumption favours the customer; people have full control over what content they watch, when they watch it, and where. Technology facilitates that in every way.

We are at an era of multi-device watching, engaging on Twitter while watching TV is a perfect example. So the main challenge is getting the attention of a potential customer and retaining their attention long enough for them to get your message.

Video is an effective way of achieving high engagement levels with measurable performance measures; it is the most powerful advertising medium. Video needs to work hand in hand with technology and targeting to effectively deliver. The consumption levels of video have increased dramatically over the last few years, and the marketing industry is changing to reflect. The full potential of video has yet to be realised.

 

 

 

 

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Key industry facts and figures for 2015

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The only constant, they say, is change. And that’s especially true when it comes to ad spend, online content and consumer habits.

So how is the digital landscape looking for the future? We have trawled the web in search of the latest findings on digital consumption, the growth of video, the influence of social media and the impact of advancing technology.

Let’s start with the Irish market…

 

IRISH DIGITAL MARKET 

Ad spend is one of the most affected areas in the past year or so, with seismic shifts in digital ad spend, mobile ads, native advertising and especially video advertising. 

Key Findings:

  • Digital Ad spend grew by 25% in the first half of 2015 to a landmark high of €162m.
  • Mobile ad spend is now 40% of total digital spend with growth year-on-year of 72%.
  • Native advertising (sponsored content) has been broken out for the first time with a spend of €16m in H1 2015 (Jan to June 2015).
  • Spend on digital video advertising grew by 57% from €7m H1 2014 to €11m H1 2015 reflecting brand advertisers’ strong commitment to this format.

This move towards video ad spend is a reaction to consumer habits. As you’ll see below, Irish consumers are flocking to online video, which is having a knock-on effect on traditional TV and social networking.

  • 54% of Irish users consume video via smartphone on a daily basis. 61% of all users consume short form video via smartphones.
  • 43% of 26-34 year olds in Ireland consume the majority of their TV content online.
  • Speaking of social networking, the Irish are fond of Facebook and video channel YouTube as a means of communication, with rising star Twitter making a bigger impact in recent years.
  • 35% of Irish people use YouTube as a social network, behind Facebook at 52%, ahead of Twitter at 23%.
  • 640,000 users in Ireland have active YouTube accounts.
  • Almost 70% of Irish Social Media users follow brands and businesses on Social Media.
  • The average Irish user on Facebook displays more than 300 friends, which provides viral opportunities.
  • Retailers are experiencing up to a 35% conversion lift when using online video to present their products (according to research from marketing professionals in April 2015).

Arguably the biggest change in the last two years in Ireland has been the rise of Video on Demand (of VoD). For instance…

  • Video on Demand – stats based on the last six months of people who have watched video on demand:
    • 87% of Irish adults aged between 18-34 years old.
    • 85% 25-44 years old.
    • 84% of Housekeepers with kids.
    • 66% of All adults.
    • 47% of adults age 45+.
  • Platforms used to access Video On Demand – free platforms have the highest reach
    • 51% use free services.
    • 25% paid subscriptions.
    • 9% pay per view.
    • 66% of all viewing is spent watching free content.

This, of course, has a knock-on effect on marketing trends. Here is where you can see the real power of viral campaigns and word of mouth.

  • Video marketing trends:
    • 23% of people searched for a brand after watching a video ad.
    • 19% amplified it through word of mouth.
    • 9% bought a product based on viewing the video.
    • 16% clicked the ad to find more information.
    • 23% visited the brands website.
  • Video consumption trends
    • Within 1 hour of VOD consumption a typical person watches:
      • 36 mins of On-demand content.
      • 24 mins of Live-broadcasts / streams.
    • The last 6 months people who watch 1hr or more video has increased from 72% to 91%.
    • 54% of 16-24year olds watch more VOD than TV.
    • 33% of all Irish adults watch more VOD than TV.
    • VOD viewing rises sharply during the evening hours of 6pm to midnight.
    • And accounts for 60% viewing time.
    • Weekdays and weekends have similar viewing trends.

Consumers tend to be most receptive on mobile devices, particularly smartphones:

  • Influence of Device on Attention index*
    • Smartphone 109
    • Tablet 99
    • PC 93
  • Receptivity index:
    • Smartphone 101
    • Tablet 95
    • PC 91
  • Consumers usage by browsing device:
  • Facebook mobile: A screen first a phone second –
    • Facebook IQ: Study showed 3 key insights when measuring the motivators and behaviours of 25-35 year old adults
      • Online is the new Offline.
      • Mobile is the first ‘screen’.
      • ‘Fear of being Offline’ is the new ‘Fear of missing out’.

 

These figures are mostly consistent with UK trends. Let’s take a look…

UK DIGITAL MARKET

 

Key Findings:

  •  Consumers in the UK are increasingly watching more video ads, with start rates rising from 41% in 2013 to 63% in 2015.
  • 40% are watching more video on their smartphones in 2015 than 2014, 26% are watching less TV because of this.
  • 80% watch mobile video at home and 50% watch it outdoors, 25% would watch more video on their smartphones if it didn’t use up their data.
  • Mobile video isn’t just short video clips – 37% watch long video formats such as full length movies or TV shows at least once a day.

 

So how does that apply to ads? You’d be surprised how much consumers embrace ads, if they’re done the right way…

 

  • 70% are happy to have ads to get free content, but would prefer ads that appear in mobile videos to be related to the video they are watching or have recently watched.
  • 25% often watch video on their mobile whilst watching TV, offering a pathway to creating more engaging and innovative multi-media campaigns.
  • Comscore reports a website visitor is 64% more likely to buy a product after watching a video and will stay an extra 2 mins longer on your website.
  • 80% of smartphone users use mobile phones for shopping research, and 80% of those shoppers do their mobile research in store.
  • Video is worth 1.8m words, according to Dr. James McQuivey of Forrester Research.

 

Here’s how the UK were spending their ad budgets…

 

  • Digital advertising in the UK was worth £3.975 billion in H1 2015, up 13.4% from £3.507 billion in H1 2014 representing a market share of over 40%. 
  • Digital advertising spend in 2014 was £7.2bn, a 40% market share and a growth of 800% since 2004 when share was 4%.
  • Digital video advertising grew from £12m in 2008 to £442m in 2014. 
  • Mobile ad spend represented £29m in 2008 (1% of digital advertising) – In 2014 it has 23% market share worth £1.6bn.
  • Mobile video advertising is the fastest growing digital ad format = 142% growth from 2013 – 2014.
  • Social media advertising has shown a growth of 530% since 2010, from £146m to £922m.
  • 2014 Twitter’s broadcasting feature Periscope had 10m accounts, 4 months after launching.
  • Future looks bright, in 2020 digital will represent 50% market share reaching the £10bn. 

And finally, here’s a tantalising statistic about the broader international market:

  • EMEA has seen the biggest growth in video advertising, growth of 160% since 2013, North America has seen the biggest growth in 2015, + 52%, followed by APAC, growth of 42%.

 

 

 

 

Source: Google, IAB Ireland & UK, Entrepreneur, Nov 2015

 

 

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