Private Programmatic: the new frontier in online advertising
Maintaining sovereignty over customer data is vital - as is reaching your target audience. And the solution is Private Programmatic.
Online advertising is being automated at a rapid rate and has been able to target, based on user profiles, for some time. Key to this is the data which firms now possess, but which they often don’t use effectively. NEXT AUDIENCE delivers improved results with its Private Programmatic offering, linking advertisers’ own exclusive data with individually tailored algorithms. Matthias Schrader explains how it all works.
How do companies manage to get data that can help them in their campaigns?
Matthias Schrader: Amazingly, most already have access to it. Advertisers’ own exclusive data – so-called First-Party data – is extremely valuable. Good examples would be data illuminating how customers use their website, as well as CRM data. Their value lies in the fact that these days a significant portion of display advertising in programmatic buying is based on user profiling. In reality this takes place in milliseconds, in high speed. And as with every auction, he who possesses the best information makes the best deal, in this case reaching the relevant users on the most favourable commercial terms.
That sounds a bit like the age-old retargeting.
Matthias Schrader: Retargeting is, in actual fact, a special case in the process, which we at NEXT AUDIENCE call Private Programmatic.
It differs from conventional retargeting in three main ways:
- Firstly, we don’t just look at the buying funnel, such as cancellations at the shopping cart stage, for example. We analyse a user’s Customer Journey, delivering relevant messages in every phase of the customer cycle. That’s the only way to scale display advertising for advertisers in the entire process.
- Secondly, we don’t depend on cookies, we save the profiles on our own server, enabling us to enrich them at any time with other information, such as CRM data, or using statistical methods to divide the market into segments, which can be addressed individually.
- Thirdly, with our solutions, advertisers can define with great precision the quantity and quality of contact for each user. This is something which will become ever more important for the short-term success of campaigns and the long- term acceptance of online advertising.
So what is Private Programmatic exactly?
Matthias Schrader: Scratch beneath the surface and you’ll find an epochal war is going on at the moment around advertiser data. On the field of battle there are three parties, whose future business model lies in monetising this data.
In one corner you have the large platforms such as Google and Facebook, in another the ad networks (retargeting providers of a sort) and then you have the international media agency networks. The latter two are losing their purchasing advantage through auction models with Real Time Bidding – under the hammer, more of the same becomes dearer, not cheaper. And so they are trying to maintain their very comfortable margins using their own technology.
Here’s the hitch: in this game advertisers can’t really exploit the potential that Programmatic Buying offers them.
Very few advertisers will want to share their CRM data with Google and Facebook, for example. Media agencies are awkward bedfellows for them too, because a ￼near-lock-in occurs through their own proprietary technology. User profiles can’t be transferred to a new agency partner, and so advertisers have great difficulty in switching agency partners without suffering massive losses in performance.
At NEXT AUDIENCE we work exclusively for the fourth party at the table: the advertisers who, as hosts, pay for the entire show at the end of the day. We operate an exclusive Data management Platform (DMP) for them on their own hardware. This guarantees complete control over their data and allows them to enrich user profiles without having to release information, such as CRM data, for example, to third parties. As the only costs involved are technical, the entire efficiency gains in programmatic media buying go to the advertiser, who doesn’t have to share them with third parties. We call this principle Private Programmatic.