Agencies Warming To Programmatic But Still Work To Do

Programmatic advertising is surging in Australia. Agency spending increased from just $10 million in 2011 to $200 million last year and that figure does not include direct spending by brands.  However it is important to remember these are early days and impediments remain.

Over the last month B&T and sister tech site Which-50 hosted a series of round tables with senior marketing and digital leaders (more on that in the coming weeks) but one of the themes that emerged from these events was an abiding skepticism of the limits of programmatic. Marketers buy the overall story of programmatic, and welcome it. But they remain unconvinced of the froth, and accuse the industry of overreach in some of the claims it makes.

AdRoll president and CMO Adam Berke (pictured below) gave a refreshingly honest account of how well the industry is meeting these concerns.

He acknowledged that algorithms are still on the steep part of the improvement curve, capabilities are still being developed on the ground in many markets including Australia, and on the vexed question of privacy, he said users have the right not to be surprised.

However the overall message was that platforms such as AdRoll’s BidIQ have taken the heavy lifting out of much of the digital advertising decision making and more importantly brought the powerful determination of intent to online display advertising.

People intrinsically understand the link between search and intent. After all, you type what you want into the search bar.

Berke argues that AdRoll now provides as good, and often even better opportunities to determine what the buyer wants to know. “Take the example of a road bike. When someone types that into Google they may be interested in buying a bike or maybe getting ideas for different tours or routes, things of that nature. But when someone visits a brand’s website and looks at a Trek 5000 carbon frame road bike that is an extremely high fidelity intent signal.”

“The reality is that marketers will be asking where is this person in the funnel, how much do we want to bid for a pay for click ad on a search engine results pages, or a display ad, or for something in the Facebook news feed,” he said.

(Image source: IAB Australia)

“The nice thing about BidIQ which is our algorithm is that is does a lot of the heavy lifting behind the scenes. It will automatically factor in whether or not somebody did indeed go to a specific product page along with several other proctor pages. Did they just go to the company web site or maybe read a comparison article, or some check out information about carbon frame bikes. Then it will automatically adjust based on the level of intent and change that bid in real time. Billions of times a day.”

Berke who has a background in statistics and economics, and already has 12 years under his belt in the adtech industry said algorithms are still on the steep part of the improvement curve.

“With each revision of the algorithm we are still seeing 10 to 20 per cent improvements in the click through rates, so we are still improving, and that’s just has to do with the staging of our investment,” he said.

Customer experience, capabilities

According to Berke, “We made a very core investment early on in the usability of the platform. That has been a real differentiator in the adtech space where a lot of our competitors are more manual in their account management practices. With other platforms you have to work with a person. There’s a lot of hands on effort. But we wanted to automate a lot of that and create the sort of experience that made it easy to onboard, manage and optimize campaigns, and get reporting.”

“We did a big upfront investment in the UX but all the while we were also working on the algorithm and bidding side of things.”

Another area where he says AdRoll has put a lot of focus is on helping to develop programmatic capabilities in the industry.

“The capabilities issue is a global problem. Based on some of the research that we have done I don’t think the sophistication or the awareness in the Australian market lags that far behind in the US. There has been pent up demand in the Australian market for these technologies. Marketers know the best practices and the solutions to use, but the premier companies didn’t make the investment in the market. ”

But that is changing. “We were one of the first global Adtech’s to come here and I think we have the largest sales and service company outside Google and Facebook.”

On the issue of privacy, AdRoll’s local managing director Ben Sharp observed at the recent Daze of Disruption conference in Sydney that consumers love relevancy but they hate retargeting. Given these issues are different sides of the same coin Which-50 asked Berke how the company considered the problem.

“When you are making decisions about privacy, really you are talking about the right not be surprised. Nothing should happen that’s surprises a consumer in how their data is being used. So if you use good judgment and respect the service, then as a marketer you are actually very well aligned with delivering a good user experience.”

This article originally appeared on www.which-50.com