What is Programmatic and Why is Everyone Talking About It?

Nourah Al Fayez / April 2016

Want to know more about what everyone is calling “the future of digital advertising?” At a glance, programmatic may seem full of acronyms and complex concepts, but its foundation is simple. Here’s how to describe it in a way that even your parents could understand.

Programmatic is the marriage of two words: programme and automatic. Programmatic means using programmes or software to automate the ad management, buying and measurement process. Phrases and acronyms like “integrated stack” and “DMP” may have made you say: ‘no thank you, I’ll stick to what’s familiar.’ After all, you just got the hang of CPC and CTR, right?

You could shy away from this unfamiliar space, but then you’ll blink and suddenly 80% of digital ad buys are done programmatically and you will feel even more out of the loop.

Break It Down

Let’s not think about programmatic or even digital marketing. Let’s say you’re an artist. You’re sitting in your studio surrounded by all your paint bottles and dirty brushes, scanning over a completed work. You hire an art dealer who makes informed decisions about which galleries should show your work. In the meantime you keep your artwork in storage for safekeeping, while your art dealer helps you select the ideal art galleries and the perfect wall space for your art.

Art collectors will visit these galleries as they search for the perfect piece to add to their collection. Each art collector has their preferences and different art galleries cater to different tastes. The more information you have on these art collectors, the more easily you can zero in on your key audience. Information can be used to determine how to reach various types of art collectors who would be interested in your art.

When your work finally sells, you go through a process to determine the cost of the sale in the hope that your second painting may sell more quickly and more cost effectively. This could take months, if not years.

Back to the Future

Now let’s go through it again, but let’s make it programmatic this time. Your studio is a software where you have all your painting tools stored, including templates you can reuse. Here, you create your work of art - your ad. You do it in minutes, not months.

Your ad is then ready for the world to see, so you place it on an ad server (i.e. an art storage unit). Your art dealer is the demand side platform or search ad tool trying to find you the best ad spot (or wall in an art gallery) for the best price, but also equipped with key information on the audience you could reach in each gallery, the best way to safeguard your brand against unwanted brand associations, and the probability that your art (or ad) will be viewed. Information on your audience can come from multiple sources such as your own data from site tagging or CRM data (1st party data), or data on, for example, women 18-35 or auto enthusiasts purchased from 3rd party providers, audiences based on their search activities etc. Reaching your key audience at scale and cost effectively is the cornerstone of programmatic buying.

All the information the art dealer provides you with post-sales is like the data you can pull during and after running your ad campaign to get a better understanding of how it performed and how to improve it’s performance. What was your reach? Did it reach the right audience segments and how can you leverage these segments in future? You can then enhance your strategies and get even better performance.

Automatically Easier

Automating the process ensures cost effectiveness, greater efficiency and creative relevance. The programmes that automate ad management, buying and measurement process are already yielding strong results for the companies that have embraced programmatic. For example, programmatic helped Ooredoo reach their key audience segments while reducing their cost per acquisition by 88% when compared to traditional channels.

Programmatic also allowed OSN and its media agency Vivaki to tap into multiple data sources to enhance campaign performance. OSN was able to outperform all other channels and achieve 96% lower CPAs compared with other channels used in the past. The largest share of conversion volume was driven by their search data and audience lists based on user’s clicks on ads from relevant keywords. This highlights the importance of implementing programmatic to allow advertisers to cultivate and leverage their data seamlessly.

As we’ve seen across all industries in MENA, shifting to programmatic solutions across all phases of the ad campaign from ad creation to ad serving will increase efficiency, improve performance and allow capitalize on your data. Stay tuned for the next piece in our series on programmatic to learn more about how the digital ad market is evolving. 

The Lantern Award Winner and Top 10 Finalists