Is Programmatic Buying Too Risky?

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Is Programmatic Buying Too Risky?

Whenever I am asked where I would like to live if I had to choose one country except the one I live in now, Australia always springs to mind. I do not know why exactly, but most probably it’s because it’s so far away from where I currently reside, or because of the beauty of its nature, its weather, kangaroos, koalas… It just seems like paradise when you think of this distant country. However, it’s not only fun and games when you dig deeper. Australia’s sandy shorelines are infested with sharks, 15 out of the 20 most venomous snakes in the world are native to the continent, and poisonous spiders are abundant. And then there are dust storms, forest fires and snowless Christmas.

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This reminds me a lot of programmatic buying. At first look, it’s like a cure for every disease in online advertising. Processes are automated, and the media supply and audience reach are enormous. Plus, it can get seriously cheap. A marketer’s dream come true. The world of programmatic, however, can also be treacherous and even outright dangerous. In this blog post, I will cover the main risks of programmatic buying and, of course, ways to stay safe and enjoy the benefits it brings.


02 Blog ImgBudget Pacing

Campaigns have set budgets. That’s very much a norm in any advertising campaign. Those budgets are usually meant to be spent throughout a campaign period. With standard media buying, you agree on the period and budget with the publisher and transfer all budget control to them. This is not the case with programmatic, though – budget control is in the hands of the buyer, rather than the seller, of media. This brings a lot of benefits to the demand side, but also a lot of responsibility. Due to the immense audience reach and almost unlimited media supply – even the largest budgets can be spent in a matter of seconds. And although here at Adform we have developed monitoring techniques to prevent this from happening accidentally, it is sometimes impossible to detect such cases with enough precision to stop a disaster from happening.


So what can you do to avoid spending your campaign budget faster than you intended to? There are two important details to keep in mind: budget pacing type and audience volume. Two main budget pacing types are available: even and accelerated. Even budget pacing automatically distributes your budget so that a fixed amount is spent budget daily, while accelerated tries to spend the lot as fast as possible. Accelerated mode can be very handy when, for example, you are retargeting a small audience, like people who have bought a specific product from you earlier, or visitors who have signed up for your newsletter in the last ten days. But it can be very risky when used with large audiences – say, a broad-reach campaign targeting a whole country. As simple as it may sound – to avoid spending large chunks of budget too fast, only use the accelerated buying method for small cookie pools. If you’re not sure whether your cookie pool is small enough, try even pacing first to check how the budget is spent and only then, if necessary, switch to accelerated.


03 Blog ImgEffective Retargeting

Retargeting your customers who have already converted with generic messages is, in most cases, a waste. Moreover – recent studies suggest it can actually discourage users from buying anything from you again. This is often overlooked by many marketers and media planners. The solution is, again, obvious and simple – exclude converted visitors from your target audience. Alternatively, you could even use it to your own advantage and upsell your converters, that is – offer them something that they might be looking to buy as an extra. For this, Adform has a dedicated Dynamic Creative Optimization (DCO) solution. It is an advanced bit of online advertising, but totally worth the effort.


04 Blog ImgFrequency Capping

Just like budget pacing, the frequency is in the control of the advertiser (agency) rather than the publisher (or a network) when buying programmatically. This option is less dangerous for spending your budget, but nonetheless important when delivering to the budget effectively. The effective frequency of exposure varies greatly depending on the market, product and general strategy, but some kind of cap is still recommended in every setup. Not capping the frequency of impressions might result in the campaign having a very limited reach and, in turn, poor performance. For best effect, make sure to cap frequency on multiple levels: overall campaign and activities individually. Once the campaign is under way, make sure your initial frequency cap is not too tight. Strict frequency capping can result in limited budget spending, without positive effects on performance.


Yes, all of the above are fundamental principles of RTB. Still, they are worth repeating over and over again to make the world of programmatic a safer place. I would even like to go further and come up with a statement similar to what Volvo did in the car industry: “No one is killed or injured in a new Volvo by 2020.” It could go something like: “Not a single advertisement dollar will be spent ineffectively on programmatic media buying by 2020.” Ambitious? Yes. Impossible? Probably not. It’s just like living in Australia. There are sharks, creepy crawlies, forest fires and droughts, but with a correct dose of common sense and the technology working on your side, it takes very little to enjoy the sandy beaches, kangaroos, koalas and Christmas wearing shorts and a T-shirt.


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