As the old data-processing adage goes, garbage in, garbage out. This holds true for the programmatic advertising industry: The algorithms automating ad buying and placement are only as good as they data they use, and marketers can only evaluate the success of programmatic campaigns if they have the right data with which to do so.
With programmatic ad spend predicted to hit $84 billion this year, it’s no wonder marketers’ top concerns are largely data related. Below, we explore four recent trends in programmatic advertising that are fueled by data, from changes in how companies handle ad buying to shifting technology preferences.
1. Moving to Performance-Based Metrics
As marketers increasingly take programmatic out of the hands of ad agencies, they are also changing how they measure the success of their campaigns. Cost per impression, click-through rate, and other standard metrics don’t truly demonstrate the success of a programmatic ad buy. Instead, marketers want to know if an ad resulted in a sale or a qualified lead.
This requires better data. Half of all marketers report difficulty proving return on investment as a programmatic ad buying challenge; media mix modeling — in which media spend is linked to business performance — and certain data science techniques can help improve marketers’ understanding of the success of an ad, but they require large datasets from numerous sources.
2. Centralizing Data Management
According to a report from Salesforce, data management platforms (DMPs) are having a bit of a moment. Only 20% of companies have been using one for more than three years, but 21% have plans to implement one or have already. DMPs allow marketers to bring together campaign and audience data from many different sources and make it available to demand-side platforms for targeted ad buying.
As marketers incorporate more and more data sources — an average of 6.2 this year, according to Salesforce — it makes sense that they would want to access them from a central hub. In fact, 48.1% of marketers saw centralized data ownership as integral to deriving value from data in 2017, up from 30.8% the year prior.
3. Exploring New Data Sources Responsibly
Marketers are contending with stricter requirements, such as the EU’s General Data Protection Regulation (GDPR), and explosive changes to established programmatic practices. The most recent--Google's change to its Chrome Browser that blocks third-party cookies, a staple of user-level targeting.
Consequently, marketers might soon have to think differently about how they get ads in front of potential customers. Context will be king: Data related to keywords, time, or location, for instance, will become more important to programmatic ad buying.
Why Programmatic Advertising is Driving the Need for Better Data
Programmatic advertising is the dominant means for placing ads, thanks to its efficiency and reach. But optimizing it is challenging. As marketers look to overcome issues like lack of transparency, ad fraud, and inventory quality problems, access to better data will be key.
Taking control of programmatic ad buying — by incorporating new data sources and focusing on performance — will not only help improve return on investment, it will allow marketers to provide ad experiences that make sense to their audience. And that can only be a good thing.