Automation: Your Media Buying...

1RUBICON PROJECT | AUTOMATION: YOUR MEDIA BUYING COMPASS

Automation:

Your MediaBuyingCompass

”I don’t understandwhy more people aren’tspending more money ina programmatic fashion.

It’s the future.” – Digital Lead, Leading Consumer Packaged Goods Company


TABLE OF CONTENTS

Introduction

Lost in the Sea of Digital Media Buying Options

Charting the Course

Stormy Seas

Land Ahead

How Rubicon Project Can Help

3

4

5

8

10

11


Introduction

Let’s find out how...

Long gone are the days of negotiating big dollar media buys with networks over cocktails at the

Oyster Bar. While the holy grail of advertising is still to reach consumers in the right place at

the right time with the right message, advertisers today have a harder job of engaging with

consumers. Brands are spending countless hours and billions of dollars every year trying to

optimize reach, and navigating the ever-evolving media landscape can feel complex, confusing

and, oftentimes, inefficient.

THERE IS NO DENYING IT… the media industry has been

turned on its head. One of the more notable areas

of change in the media environment is the growth of

automated buying, which includes both programmat-

ic buying but more broadly applies to any method of

buying, selling or fulfi l l ing ad placements that is automat-

ed and technology-driven. In Digiday’s most recent State

of the Industry report , “findings show that programmatic is

no longer just a fr inge player in the world of a d v e r t i s i n g

t e c h n o l o g y b u t a s t r o n g a n d g r o w i n g presence.” 1

Estimated to exceed $15 bill ion dollars in spend-

ing by the end of 2015, programmatic buying will

account for fifty-five percent of the U.S. digital

display advertising market2. It is evident that many

advertisers are embracing the transition and are experienc-

ing huge success, but there are still many lagging behind.

Despite the rapid growth of automated buying, and increased interest in it, many

advertisers are still unclear or uncertain of when and how to take advantage of

automated buying and how to leverage it.

The main explanat ion we can provide for this lag is a gap in education. In 2014, the Associat ion of Nat ional

Advert isers surveyed 153 marketers and found that only 26% said they knew what programmatic buying was

and had actual ly used i t . The other 74% ranged from either being completely unaware, somewhat knowl-

edgeable but unclear, or in need of education 3. Even those who use programmatic tools to buy media may be

rely ing solely on their media partners to execute i t and may not have a comprehensive understanding of what

automated buying can do for them.

In an effort to close this educational gap, Rubicon Project has led new research to understand the current

att i tudes, bel iefs , and experiences of advert isers with regards to automated buying. We spoke to a cross-

sect ion of companies that included onl ine retai lers , consumer packaged goods, f inancial services, televis ion

providers, and media agencies. Whi le each part ic ipant v iewed automated buying through dif ferent lenses,

they al l reported that i t is changing the way advert isers reach consumers, and is empowering them with new

knowledge and a chart for navigat ing the vast sea of media.

1 IDC Worldwide Digital Advertising Market Model, 1Q 2015 (Includes Display, Mobile, and Digital Video)

2 eMarketer, Programmatic Advertising 2015 Outlook, February 12, 2015

3 eMarketer, Programmatic Advertising 2015 Outlook, February 12, 2015


Lost in the Sea ofDigital Media Buying Options

DO THESE SOUND FAMILIAR TO YOU?

As brands try to navigate the media buying process

(of which automation is just one facet), there are

several complicating factors they regularly en-

counter. During the course of our research, we

found these to be universally acknowledged

regardless of how connected the advertiser was

with their media agency or the level of experience

the advertiser had with digital media buying.

LACK OF TRANSPARENCY & CONTROL Advertisers feel buying digital media is a “black box”:

they’re not quite sure who they’re reaching, and they

lack visibility into the sites their ads are appearing on.

INEFFICIENCY Buying digital media can be wasteful in terms of targeting, spending, and time.

COMPLEXITYThe volume of digital media options and corresponding data feels overwhelming.

“Simply put, the lack of transparency is around where my ads are landing and

the breakdown of all the costs.”

– Digital Manager, Leading Consumer Packaged Goods Company

”We had all of this data and I knew there was something more we could be doing

with it, but we were limited in our resources. I was frustrated for years because

we were constantly re-learning the same things around campaign performance.”

– Senior Media Director, Leading Consumer Packaged Goods Company

INACCESSIBLE DATA Advertisers are often unable to leverage or capitalize on available data.


Charting the Course:Success with Automation

The advertisers we spoke to told us that automated buying is addressing many of the functional issuesthey experienced with traditional buying, and ischanging the way they connect with their consumers.

MANY ADVERTISERS REPORTED IMPROVEMENTS IN:

TARGETING

Improved visibility into who advertisers were targeting and improved likelihood of reaching

strategic targets and/or identifying new targets. Some also noted an increase in subsequent

relevancy with customers.

More importantly, advert isers were pleasantly surpr ised to

discover a number of key functional benefits with automated

buying. These outcomes in turn led to a number of higher

order benefits as advert isers gained control over their

buying experience.

Init ia l ly, users started to observe greater functional eff ic ien-

cies, which translated into transparency and improved media

qual i ty for the brand.

”Using programmatic allows us to more effectively target...so we’re able to reach

customers who are more likely to convert to buyers.”

– Digital Marketing Specialist, Online Retailer

“The thing that marks our approach to programmatic is that we are looking to drive

effectiveness. We feel if we drive the effectiveness of advertising, we can drive

ROI. We’re not looking at buying more cheaply; we’re looking at how we buy more

strategically and increase relevancy with our strategic customer audience.”


”It drives efficiency because we can use data to more accurately and transparently

reach our target consumers.”

– Digital Lead, Leading Consumer Packaged Goods Company


4 The Wall Street Journal, “Morgan Stanley Pegs Media Accounts Under Review at $26 Million,” June 2015

Overall, these improvements gave the advertisers the comfort and confidence to better

manage their media buys and their brands. Through automated buying, advertisers and

agencies are becoming more empowered to manage the destiny of their media buys.

TIME INVESTMENTS

Automated buying saved time for the advertiser, so they could focus on driving business objec-

tives and building strong creative.

”The ease of setting up a buy without having to do all the back and forth we were

traditionally used to has been a huge improvement in efficiency.”

– Online Marketing Manager, Leading Television Provider

QUALITY

While automated buying was previously often associated with real-time bidding and sub-par

inventory, the reality has been quite different.

”With programmatic, we can go to the individual publishers that advertisers want,

we can ensure we get placements that advertisers want, and we have a technology

solution that ensures other advertisers don’t show up next to your ads.”

– Director, Media Agency

RICHER DATA & ANALYSIS

Better data and more rigorous analysis to assess impact gives brands and advertisers more

knowledge and control.

“When I started learning about programmatic and how it unlocks the ability to use

our data as a strategic engine, I got very excited.”


“What you’re seeing is a fundamental shift in not just how media is bought, but how

advertisers can engage with consumers more effectively.”

– Brian Lesser, Global CEO of Xaxis, WPP’s programmatic-buying arm. 4


Automated BuyingBenefit Hierarchy

During our research, respondents frequently cited the functional benefits of

automated buying, like improvements in effective buys and ability to target. With addi-

tional probing, we uncovered that these functional benefits laddered to higher-order

benefits like an improvement in respondents’ sense of control over their campaigns.

These higher-order benefits, in turn, led to emotional benefits like confidence and

empowerment in the buying process. The implications of these positive sentiments asso-

ciated with buying are far-reaching: we believe they influence attitudes about managing

the business as a whole and may even empower advertisers to make bolder and more

creative decisions.

EMOTIONAL BENEFITS Comfort

Confidence

Empowerment

HIGHER-ORDER BENEFITS More Transparency

More Control

Smarter Buying & Brand Building

FUNCTIONAL BENEFITS More value for the money

More effective media buys

Reaching new target customers

More robust data analysts


Stormy Seas: Opportunities forImprovement Still Exists

Despite the fact that automation addresses

so many unmet needs and provides a plethora

of measurable benefits, there are still barriers

to trial and adoption by advertisers.

The advertisers we spoke to cited a variety of

misperceptions, category hurdles, and operational

challenges that are the new realities of the

automated media buying ecosystem.

COMPLEXITYThe abundance of players and complexity of the process can make

advertisers feel overwhelmed. There are too many “middle men” taking

a margin and not adding enough value.

“People are buying prospecting CPMs and then they’re marking them up

significantly to advertisers to take the margin without being clear on how things are

priced. Until there’s more transparency, advertisers will never know just how big of

a mess it really is.”


“There are so many vendors who are buying programmatically and then adding

proprietary data analysis to warrant charging huge markups.”


INCONSISTENCIES ACROSS THE VALUE CHAIN

Different buying partners deliver value in very different ways and use inconsistent terminology

to explain the technology, so advertisers have to be savvy to navigate the language and under-

stand what they get from various partners.

“Programmatic is sort of a loose term that has a lot of different definitions, which

I think can shape perceptions. Right now, it’s a buzz word that’s losing its value

because of the variability in definition and the offers that media partners provide.

There needs to be a more formalized definition of programmatic so that we can set

expectations of our media partners and get consistent outcomes.”



BIASED PARTIESSome parties were cited for having biased agendas. These comments were particularly perva-

sive when made in reference to media agencies.

SUSPICIOUS ACTIVITYSome players engender distrust among advertisers

by using questionable tactics to distort non-human

traffic, which skews performance and can hurt brands.

DATA OVERLOADNavigating, understanding, and extracting insights from the data can be too demanding without

the right support.

”There’s just so many ways to cut the data and so many things we need to under-

stand given our strategic goals that we are literally deconstructing data and learning

new things every day. There’s no way we could do this without our media partners

managing this effort.”


QUALITY Some perceptions still exist that only remnant inventory can be bought through automated

advertising.

”There’s a perception among some advertisers – primarily those who work at luxury

brands - that the inventory is ‘cheap’ and that it won’t align with the equities of

the brand.”

– Media Agency

“Some of the bad perceptions of automated are caused by bad behaviors in the

industry. When you have people out there who are cookie bombing or leveraging

black box tactics in order to hide extremely high prospecting CPMs – these are all

things that hide what’s really happening from the marketers.”


“We were buying on a fixed CPM model and the agency

was taking a margin on those programmatic buys,

unbeknownst to us.”



BE CURIOUS AND BRAVE:ASK LOTS OF QUESTIONSReach out to peers and experts you trust

to get smart. Education about automated

buying is the key that unlocks everything.

SHARE YOUR KNOWLEDGEHelp your brand teams understand the

business benefits of automated buying.

DEMAND TRANSPARENCY FROMMEDIA PARTNERSEmpower yourself with digital advertis-

ing knowledge and demand transparency

around buys, placement, and targeting from

your agency. Know exactly what you’ll be

getting in terms of reporting and data

analysis up front. This leads to better

collaboration and partnerships in

the long-term.

TEST AND LEARN Remember, you don’t have to invest 100%

of your budget right away. Do things on a

small scale, to learn as you go, and scale

what works.

ANCHOR IN STRATEGY Use your strategic objectives to guide

how you measure success. For example,

using CPM as a measure of success may not

tell the whole story. Instead, think about

how you’re reaching and engaging target

customers to drive results and evaluate

response rates.

Land Ahead: How advertisers canovercome these challengesTo varying extents, the advertisers we spoke with all use automated buying

to optimize their media investments, and they share with us some lessons

learned. Whether you’re just getting started with automation or well along

the path, here are a few tips from the pros:


How Rubicon Project can help

SPECIFICALLY, RUBICON PROJECT IS EXCITED TO ANNOUNCE THAT…

Automation is going to continue to grow at a significant rate

But for automation to be effective, advertisers will need to become engaged and under-

stand the world of automated buying. More importantly, we believe there is a need to

empower advertisers and we are committed to being your partner in that journey.

We will help younavigate the world

of automation through thought leadership and the

provision of norms andbest practices.

We can introduce you to current users so you

can start to establish bestpractices and lessons

learned with your peers.

We will remaindedicated to doing research

on automation and to sharing those results

publicly to optimizeadvertisers’ experiences.

We can help you prepare yourself and your brand teams

for the shift to automation through our training and

education tools.

“With more than 20 media agencies in review totaling $26 billion5,

brands are retaking the reins of their media budgets and strategies.”

– Jay Sears, SVP Marketplace Development, Rubicon Project

5 The Wall Street Journal, “Morgan Stanley Pegs Media Accounts Under Review at $26 Million,” June 2015


Conclusions

A Black Box Inefficient Complex

Automated advertising is delivering proven benefits to users that address

the shortfalls of traditional buying and give advertisers:

While automated advertising has delivered

proven benefits to users, there are still some

barriers in place to adoption and trial.

Rubicon Project is here to help address

the outstanding need for:

• Better Education

• Peer-to-peer Collaboration

• Category Thought Leadership

RUBICON PROJECT IS HERE TO HELP

IN SUMMARY, MEDIA BUYING HAS HISTORICALLY BEEN CATEGORIZED AS:

The qualitative research was conducted

by Contexct, LLC. during May and June

of 2015 through in depth interviews. All

findings were blinded and aggregated, but

any quotes were approved for use by the

participant.

There were a total of seven participants in the

United States and the United Kingdom who

represented the following industries:

• Online retailers

• Consumer packaged goods

• Television providers

• Financial services

• Media agencies

METHODOLOGY & SAMPLE

GreaterTransparency

GreaterGlobal Reach

GreaterAccess toPremiumInventory

GreaterIndependence


Jared Skolnick,VP Product Marketing

646 797 4757

@JaredSkol

[email protected]

180 Madison Ave, 14th FloorNew York, NY www.rubiconproject.com

Contecxt, LLC Shelley Zalis, Founder and CEO

310 990 1899

[email protected]

Key Contacts

https://twitter.com/jaredskol

mailto:mailto:jskolnick%40rubiconproject.com?subject=

mailto:mailto:shelley.zalis%40gmail.com?subject=

http://rubiconproject.com/

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