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PROGRAMMATIC
GOES
GLOBAL
Trends and best practices for
transforming marketing worldwide
DataXu 3December 2014
The New Global Standard
for Customer Engagement
The programmatic revolution knows no borders.
The same transformation that the U.S. ad industry has
been undergoing recently is also showing up in mar-
kets around the world as global marketers embrace
programmatic to deliver the right message to the right
user at the right time wherever they do business. For
major brands, the question is no longer whether to use
programmatic but what their strategy should look like
and how it should be implemented globally. In fact,
Advertising Age’s 2014 Global Programmatic Survey,
conducted for DataXu, shows that 55% of respondents
from brands and agencies said they already have a
global strategy in place, and momentum continues to
build (Figure 1).
The drivers for the broad adoption of programmatic
are simple to understand, and similar overseas to do-
mestic markets: Brands and agencies use programmatic
to increase marketing efficiency, helping them get more
out of their budgets. But beyond incremental improve-
ments, an effective programmatic strategy can also sig-
nificantly change the way a brand does business around
Why Global Programmatic
Figure 1BUDGETING FOR PROGRAMMATIC
AVERAGE % DOMESTIC MARKET AVERAGE % INTERNATIONALLY
n Two years ago n Currently n Estimated two years from now
What percentage of your online/digital media budget was, is and do you estimate will be bought and/or executed
via programmatic technologies?
Base = 351 respondents
Having transformed advertising markets and practices within the U.S., the programmatic revolution is already well
underway in the rest of the world, too. This white paper explores the state of global programmatic today, including
the strategies and tools being used, the goals marketers hope to achieve and the impact on relationships among
brands, agencies and technology providers. Data from a recent Advertising Age survey, complemented with insights
from leading global marketers and technology leaders, reveal a thriving ecosystem of automation and insight that’s
helping advertisers reach further with their messages, target and engage more effectively with customers, and drive
growth wherever they do business.
44.4%
51.1%
56.2%
11.7%
20.0%
29.8%
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DataXu 4December 2014
the world by enabling the creation of global standards
as well as fine-tuned campaign optimization for local
markets. More than a specialized tactic, programmatic
is being used as a core element of branding as well as
for performance-oriented campaigns and for every ad
format.
As with programmatic on a domestic level, global
programmatic strategies present a learning curve. While
the principles remain the same everywhere—using
automation and big data across channels to achieve
higher levels of targeting, relevance, efficiency and
impact—regional variations add a layer of complexity
when they’re applied on a worldwide scale. Localized
approaches must adapt to differences in the availability
of data, consumer privacy regulations, inventory, and
popular formats and devices. Organizational structures
are evolving in tandem with strategies as brands and
agencies seek the best way to build their programmat-
ic expertise and effectiveness. Relationships among
brands, agencies and technology providers are develop-
ing similarly.
And this is only the beginning. A recent forecast by
Magna Global, the digital media buying arm of Interpub-
lic’s Mediabrands, predicts that worldwide media sales
via programmatic will rise 52% this year to $21 billion
and 27% over each of the next four years to $53 billion
in 2018.
Marketers are equally bullish about the opportuni-
ties afforded by their programmatic investments. In the
coming years, they expect to see a greater volume of
higher-quality inventory sold through programmatic,
increasing consolidation of tools and vendors across
markets and an improved ability to gain a unified view
of customer engagement worldwide. As they master the
nuances of creating and executing localized, personal-
ized marketing strategies on a global scale, the return on
these investments will only grow. Programmatic is truly
changing the marketing world.
Beyond Efficiency: Programmatic
for Performance and Branding
While the level of understanding of programmatic
buying among marketers has increased greatly since
its inception, definitions still vary. Brands and agencies
often associate programmatic with phrases such as
audience targeting, real-time bidding, automation and
optimization—all important elements of the strategy,
but not an exhaustive description. It can be helpful
to think of programmatic in terms of its benefits for
marketers. This begins with campaign and operational
efficiencies—brands and agencies can define segments
better, and more easily and efficiently execute cam-
paigns, while standardizing their operations with fewer
tools to reduce training and overhead. In the words of
Bruce Journey, co-founder and chief customer officer
of DataXu, “Programmatic lets you get the dumb work
out of the way so you can focus on smart work.”
On another level, programmatic also makes it possi-
ble to capture new insights into customer characteristics
and behaviors fueled by analytics performed on data
from various first-, second- and third-party sources.
Real-time visibility into customer engagement can
enable continual optimization to make every impression
THE VALUE OF PROGRAMMATIC
“Programmatic helps us maximize our spend and do more things than we could otherwise
afford.”
—Ben Jankowski, group head for global media, MasterCard
DataXu 5December 2014
SPONSORED CONTENT
more effective—especially when programmatic tools are
implemented on a global scale, making such strategies
viable even in smaller markets.
The programmatic conversation often begins with
efficiency—the ability to buy media more cheaply and
improve workflows. The operating expenses required to
run digital advertising can be several times the cost of
running ads on television and other traditional media,
so the economic benefits of programmatic practices
such as consolidated buying and custom exchanges are
especially attractive for marketers and agencies under
pressure to keep costs down.
Drawn by these benefits, the first companies to
embrace programmatic in a given market are often per-
formance marketers looking for a faster, cheaper way to
execute campaigns, with a keen focus on metrics. For
already-strong brands, the difficulty of measuring brand
health can be another good reason to use program-
matic for performance goals instead. “We’re looking to
drive sales,” says Raj Rao, global VP, eTransformation,
at 3M. “For example, almost all of the sales for our
Littmann Stethoscope are online, so a typical program-
matic buy for us would be to engage someone to view
a video about the device and its telehealth capabilities,
and then send them into a channel like Medshop to
complete the purchase.”
But efficiency is just part of the picture. “People talk
about efficiency and automation, but they’re only the
tip of the iceberg for the value of programmatic,” says
Martin Brown, VP, managing director of U.K. and Nor-
dics, DataXu. “By standardizing around a particular set of
programmatic technologies, companies can roll out cam-
paigns with a global scale from centralized points within
each region, aggregate and capture information around
branding and performance marketing activity, and lever-
age this data to drive better marketing outcomes.” By
understanding a customer’s reaction to a message in real
time, marketers can target and address that customer on
the impression level for true one-to-one engagement.
This blend of efficiency and effectiveness is mirrored
in the way marketers use programmatic for both brand-
ing and performance. “We’re trying to make program-
Figure 2BRANDING VS. PERFORMANCE ADS
What percentage of your digital media purchased or executed using programmatic technologies is for
branding ads and what is for performance advertising?
47.1% 51.5%52.9% 48.5%
n Branding n Performance
AVERAGE %
DOMESTIC MARKET
AVERAGE %
INTERNATIONALLY
Base = 351 respondents
matic a big part of most of our campaigns, including
some brand work,” says Ben Jankowski, group head for
global media at MasterCard. “That being said, most of
our branding activities revolve around premium buys tied
into other media programs and events, such as a pre-
mium buy on music websites to support a music festival
in tandem with radio and TV time, print and outdoor
advertising, and other consumer experiences. Program-
matic is more about efficiency and performance for us.”
For less-established brands building a name in a new
market, the efficiency benefits of programmatic can
outweigh the difficulty of measuring branding impact,
as lower media costs and improved workflows help
spread their message further than they could through
traditional methods. Indeed, the proportion of program-
matic buys for branding ads is slightly higher overseas
than in domestic markets, and is roughly equal to global
programmatic buys for performance ads—51.5% com-
pared with 47.1%, according to the survey (Figure 2).
Whether for branding or performance, marketers
take advantage of the ability to buy ads based on audi-
ences vs. content overseas just as they do domestically.
According to the survey, 58.8% of domestic and 56.8%
of international programmatic digital media buys are
done for audience, compared with 41.2% domestic and
43.2% international for content.
Where Programmatic
Is on the Rise—and Why
It’s no surprise that marketers consider the U.S. to be
the most mature region in the use of programmatic
buying, but others aren’t far behind. Asked about the
importance of various regions for international expan-
sion of programmatic (Figure 3), respondents to the Ad
Age survey ranked Canada, Asia and Western Europe
closely behind, as might be expected—but also fre-
quently mentioned South America, the Caribbean and
Figure 3PROGRAMMATIC EXPANSION AROUND THE WORLD
How important is each of the following regions for expanding internationally?
50.0%
48.2%
41.1%
42.5%
41.0%
29.4%
24.7% 24.4%
23.1%
20.0%
17.3%
12.0%
United
States
Canada Asia Western
Europe
South
America
Caribbean
& Mexico
Eastern
Europe
Australia Central
America
Middle East Africa
3.43
3.86
4.46
4.584.804.85
5.07
5.765.62
6.14
6.12
Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all important and 10 = extremely important
DataXu 6December 2014
•Average rating
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DataXu 7December 2014
Mexico, Eastern Europe and Australia.
In developed markets with a mature media and
advertising ecosystem, the sheer volume of supply can
simplify marketers’ ability to get value, especially when
armed with the right data, making them particularly ripe
for programmatic. In less sophisticated markets with
fewer media choices, publishers may tend to rely on a
larger share of premium buys. Still, says Mr. Jankowski
of MasterCard, “There are only a handful of markets
where we’re not already using programmatic, and we’re
leading toward being truly global in our approach.”
Multinational software company SAP makes no
distinction between its domestic and overseas use of
programmatic. “We’ve approached programmatic in
a global manner across North America, Latin America,
EMEA and Asia-Pacific. Our investments vary across re-
gions because of differences in our marketing budgets,
but it’s not limited by our level of familiarity and under-
standing,” says Valentina Pettenati, director of integrat-
ed media for EMEA/MEE at SAP. However, this global
approach doesn’t mean one size fits all. “Across and
even within regions, our business objectives and go-to-
market strategy can be quite different. It makes sense to
talk about North America as a region, but within EMEA,
for example, the U.K. is very different from Italy.”
Decisions about where to use programmatic, and
to what extent, can come down to the math. In a less
expensive media market, it may be harder to justify
the cost of programmatic tools. “The fixed cost you
pay for technology may be the same in each market,”
Ms. Pettenati says. “But in a lower-cost media market,
it can account for a dramatically higher percentage of
your budget than in a higher-cost market. You may be
willing to spend a higher percentage of your budget on
programmatic, but does it make sense to spend your
budget that way in India?”
Mr. Rao of 3M says China, the U.K., Brazil, Mexico
and, to a lesser extent, Japan are key markets for the
company’s programmatic strategy. “We begin with the
viewpoint of where we can achieve the highest return
on our programmatic investments,” he says. “We want
to have a clear expectation of how much programmatic
can drive improvements in share of voice, search engine
rankings and conversions.” Mr. Rao also differentiates
between the engagement models for business-to-busi-
ness—characterized by content marketing, paid social
activity and deep catalog links—and business-to-con-
sumer, where user reviews, videos and other emotional
appeals play a deeper role.
Other factors shaping global programmatic strategies
include differences in device types and media usage.
In the U.S., for example, digital marketers often focus
on tablets and desktops being used in the office during
midweek working hours, while in emerging markets,
mobile devices play a larger role, with far fewer desk-
tops in the mix. In the key Chinese market, buying
centers on specific social platforms such as Baidu and
EXECUTING PROGRAMMATIC GLOBALLY
“There may be markets like North America that are further ahead in programmatic, but
many brands want to cover as much ground as they can to achieve strategic scale. They
might lead with the bigger markets in North America and Europe but they’re also seeking
to execute across the globe rather than doing things one small piece at a time.”
—Martin Brown, VP, managing director of U.K. and Nordics, DataXu
Decisions about where to use
programmatic, and to what
extent, can come down to the
math.
DataXu 8
Weibo, and many buying agencies are owned by e-com-
merce platforms whose head-to-head competition for
referral fees leads them to enforce strict rules about
where traffic is allowed to go. Such an idiosyncratic
market can be difficult to incorporate into a truly global
programmatic technology infrastructure and strate-
gy—though the size of the Chinese consumer class can
make the effort worthwhile.
Another factor facing marketers using programmatic
globally is that data sources vary greatly across regions,
making programmatic buying more difficult in some
areas. Much of the analytics and audience segmenta-
tion enabled by programmatic is driven by third-party
data sources that aren’t available in every country. “We
have SAP-owned data everywhere we do business,”
Ms. Pettenati says. “But once you go beyond North
America, second-party data becomes less available, and
there may be few publishers who can provide much
information for your campaign. Third-party data differs
as well—it’s easier in English-speaking markets, but
it becomes much harder to find the data to profile a
campaign in MENA, so you have to adapt. But again,
we don’t change our approach but rather the way we
execute the campaign.”
It’s still possible to use programmatic effectively
even without cookie-based third-party data, such as by
relying more heavily on the brand’s own data or infor-
mation aggregated through the execution of standard
media campaigns. It just calls for a flexible approach to
determine what will be feasible in each market. In fact,
these emerging markets might turn out to be better
positioned for the future than established markets built
around cookies, an approach vulnerable to new regula-
tions, such as mandatory opt-in, in the ongoing battles
over consumer privacy in the U.S. and elsewhere.
Privacy regulations also limit the extent to which mar-
keters can put behavioral data to work. “In the U.S., we
can use our [demand-side platform] to capture behavior
Figure 4DATA & ANALYTICS IN MARKETING EFFORTS
In which of the following ways are data and analytics being integrated into marketing efforts for global brands in your
domestic markets vs. international?
Base = 266 respondents (those who are standardizing or attempting to standardize measurement and accountability across programmatic vendors)
December 2014
Campaign optimization
Improve strategies
Improve success metrics
Understand customers’ buying journey
Improve ad investment (traditional to programmatic)
Audience development
Improve cross-channel customer experience
Creative development
Understand share of voice
Rapid response to trends/events
Product development
Other (increase ROI, leverage across all media, KPI standardization, etc.) 2.6%
62.8%
62.0%
59.8%
59.0%
54.9%
51.9%
47.0%
44.0%
35.7%
35.3%
30.8%
DataXu 9
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December 2014
beyond clicks and get a broader view of our customer
engagement,” says 3M’s Mr. Rao. “In other countries
we don’t see that data, so we don’t know how to bring
that profile into retargeting programs. Programmatic
data becomes more transactional overseas, rather than
driving our CRM roadmap as in the U.S.”
In verbatim answers about the use of data for pro-
grammatic, respondents to the Ad Age survey cited a
greater comfort level in domestic markets, a closer rela-
tionship to the data and the companies that manage it
in domestic markets and greater access to data domes-
tically. Respondents also said that they tend to develop
programs domestically and then try to adapt them to
global markets.
Asked about the role of data in their programmatic
strategies domestically compared to globally, respon-
dents cited increased use of campaign optimization,
strategic refinement and improved success metrics, as
well as other elements (Figure 4).
Choosing and Implementing
Programmatic Tools
The technology stack for programmatic, overseas
as in domestic markets, is generally built around the
demand-side platform (DSP), a key enabling layer that
lets advertisers manage multiple ad and data exchange
accounts as well as bid for and buy ads through a
single point of control. Other elements can include data
management platforms (DMPs), data providers, inven-
tory sources, verification services, viewability solutions,
transactional systems and buy-side forecasting tools.
According to the Ad Age survey, the level of satis-
faction with programmatic technologies being used
internationally tends to lag behind the satisfaction with
tools used domestically, particularly in the U.S. (Figure
5). In some areas, this may reflect maturation or cultural
differences between markets. For example, global
vendors were rated significantly lower on consumer
HOW SATISFIED ARE YOU WITH PROGRAMMATIC TECHNOLOGY VENDORS?
Rate the level of satisfaction of each of the following when purchasing digital media through programmatic technology
vendors in your domestic market and in your international markets.
Figure 5
Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all satisfied and 10 = extremely satisfied
Targeting
options
Reach and/or
scale
Privacy Analytics and
reporting
capabilities
Pricing Operational
efficiency
Creative
formats
Inventory
quality
Consumer
insights
Inventory
transparency
51.3 51.2 50.7
49.3
47.0
45.7
44.2
41.4 41.0 40.4
33.6
32.2
35.3 35.6
31.1 32.2 33.1 32.3
30.8
32.8
n Domestic
n International
Numbers are percentages
DataXu 10December 2014
insights (30.8% satisfaction compared with 41.0% for
domestic) and targeting options (33.6% vs. 51.3%)—
measures that may also reflect the relative lack of sec-
ond-party—and especially third-party—data in markets,
particularly outside the U.S. In addition to consumer
insights, brands and agencies tend to be least satisfied
with the pricing advantages available through global
programmatic. This may be because the economics of
programmatic are most favorable in higher-cost domes-
tic markets, where the efficiency benefits of automated
buying yield larger savings relative to the overall spend.
Still, similar disparities exist in every area of functionality,
suggesting a more pervasive discontent.
As with domestic programmatic, providers of global
programmatic technology tend to focus on more
narrowly defined tools, with just a few seeking to build
complete solutions. Still, working with fewer vendors
remains the goal for most brands and agencies. “You
can have one core technology globally, and there’ll
always be others you might have to integrate into it for
viewability, third-party data or other requirements,” says
Mr. Brown of DataXu. “I understand why people might
feel that one technology might be better in a given
market than another, but the right core functionality
CUTTING BACK ON TECHNOLOGY PARTNERS
“We may work with a special partner here and there for a particular region or purpose,
such as a keyword targeting tool for EMEA or a fraud detection tool for North America,
but we’re strict about using only one DSP. It used to be that, when a campaign ended, the
intelligence stayed with the five or eight tools we’d worked with, and we had no visibility
into this intelligence we’d built with our own budget. So we made the strategic decision to
go with one preferred partner.”
—Valentina Pettenati, director of integrated media for EMEA/MEE, SAP
Figure 6WHAT DO YOU WANT FROM A PROGRAMMATIC VENDOR?
Please rate how important each of the following is when selecting programmatic technology vendors.
80.1% 78.1%79.8% 77.2% 76.4% 72.4% 71.2% 68.4% 66.2% 65.0%
Targeting
options
Analytics and
reporting
capabilities
Inventory
quality
Reach and/or
scale
Pricing Operational
efficiency
Inventory
transparency
Consumer
insights
Creative
formats
Privacy
7.887.958.168.078.208.358.388.348.598.62
Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all important and 10 = extremely important
•Average rating
DataXu 11December 2014
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and scalable technologies can be replicated in local mar-
kets just as well as a local provider could do, with the
advantages of fewer tools and relationships to manage,
and greater consolidation and standardization.”
Still, finding that preferred partner is not always a
simple task. “It’s not hard to find an integrated system
for a marketer—the challenge comes if you want best-
in-class in every discipline, from ad serving to dynamic
creative optimization to bidding on public and private
exchanges,” says Mr. Journey of DataXu. “Do you add
together all the best parts or just do it the easy way?
Nobody ever got fired for buying Google, but they’re
trying to dominate by owning all the data. Do you want
all your data to be owned by one company and have to
rent it back from them?”
The major tool selection criteria most often mentioned
in the Ad Age survey include targeting options (80.1%),
analytics and reporting capabilities (79.8%) and inven-
tory quality (78.1%), but respondents placed slightly
different emphasis when it comes to the criteria for
actually using these tools (Figure 6). These include pro-
tection against ad fraud (72.1%), appropriate skill sets
on team (69.9%) and guaranteed brand safety (68.1%).
Evolving Agency Relationships
and Internal Structures
The adoption of programmatic buying is also show-
ing up in its impact on the relationships in a brand’s
extended marketing organization. “We see a lot of
different models,” says DataXu’s Mr. Brown. “Bringing
programmatic in-house is a hot topic, and many brands
have done this successfully. But agencies often retain
strong relationships with their clients nonetheless, such
as becoming involved in strategy and tool selection.”
It’s hardly a novelty for brand-agency relationships
to be described in other than black-and-white terms,
and the variability and subjectivity of these partnerships
comes through in the Ad Age survey. While a majority
of both agencies and brands agree that the agency
takes the lead on global policies for implementation,
measurement, and reporting and analysis, marketers are
much more likely to give themselves credit for playing
this role while agencies are more likely to describe the
relationship as collaborative. This is especially true for
strategy, which almost half of agencies describe as a
collaboration, compared with fewer than one-third of
their clients.
Coming up to speed on programmatic tools and
strategies is imperative for every element within the
advertising ecosystem—including technology provid-
ers, which have an increasingly important role to play.
Respondents to the Ad Age survey report that agencies
and technology vendors are the most important sources
for education in programmatic technologies, but it’s a
group effort. “Education happens through a virtuous
circle—technology providers, brands and agencies are
learning together as we move through the space,”
Mr. Brown says. “A technology company can’t say that
they’re the arbiters of everything programmatic because
the expertise and strategy coming from brands and
agencies are equally critical to help raise the level of
understanding.”
At SAP, an Integrated Media team within the brand
PROGRAMMATIC’S PRESSURE ON MARKETING ECOSYSTEMS
“There’s a lot of pressure on the economics of the marketing ecosystem. Marketers want
to pay less, procurement people are getting involved in these decisions—it’s getting harder
for agencies to make money. Increasing transparency on price, data, inventory and supply
can expose a lot of the obfuscation that can happen in the digital environment.”
— Bruce Journey, co-founder and chief customer officer, DataXu
DataXu 12December 2014
experience group works with marketing stakeholders
on any campaign. “We view the relationship among
our group, our agency and our DSP as a three-legged
stool, with Integrated Media taking the lead from a
client perspective,” Ms. Pettenati says. “Having a direct
relationship with our DSP does require a lot of work in
terms of understanding the impact of every decision,
but it’s a matter of knowing what you want. Our team
has a strong technical understanding of media and
knew what we wanted—from top-level strategy to exe-
cution, trafficking and tracking—so it was just a matter
of getting it done.”
It would be natural to expect that the transforma-
tion of marketing through programmatic would bring
a similar change in organizational structure. In reality,
almost 62% of the brands and agencies responding to
the Ad Age survey are not restructuring departments or
their organizations to take advantage of programmatic
technologies. This may be because they have initially
focused on the changing nature of the agency-client
relationship. It may also be that more organizations
will restructure as the sophistication and extent of their
programmatic strategies increase going forward.
In the meantime, the approaches brands and
agencies are using to incorporate programmatic into
their organizations vary widely. Some are weaving
programmatic tools and practices into existing groups
while others are creating specialized teams or centers of
excellence, as at SAP. Some brands are outsourcing to
agencies with the spending power to invest in high-end
programmatic tools, while others are developing propri-
etary tools of their own.
Looking Ahead: Marketing
Becomes Programmatic
The share of budgets allocated to programmatic
buying is growing steadily in both domestic and interna-
tional markets, as is the use of digital media (Figure 7).
“Programmatic is being adopted beyond specific tactics
and audiences to become a true strategy for brands,
and we’ll see that increase and spread beyond digital
into TV and other areas,” DataXu’s Mr. Brown says. “It’s
a development process as brands work to gain access
and aggregate the right kinds of historical and real-time
data to inform the strategy, but it’s a constant topic for
CMOs and CEOs these days.”
Ms. Pettenati says SAP is also seeing growth in pro-
grammatic spending. “We expect programmatic to be
a much bigger percentage of our ad spend,” she says.
“With our direct DSP relationship, we’ll be able to keep
the data on our campaigns. We’ll also be able to run
multiple campaigns out of the same platform and do
things at massive scale, such as to integrate sequential
messaging and perform dynamic optimization.“
As they increase their programmatic spending,
marketers also expect to see higher-quality inventory,
continuing a strong trend. Almost two-thirds of brands
and agencies report seeing higher-quality inventory on
open exchanges internationally now compared with
two years ago, and 81.8% anticipate even higher quali-
ty two years from now.
This growth in programmatic comes as market-
ers continue to try to remove stumbling blocks that
can make it difficult to realize the full potential of the
technology. Key pain points cited in the Ad Age survey
PROGRAMMATIC SPENDING FORECAST
What percentage of your domestic and international
digital media budgets is handled programmatically?
Two years ago
Currently
Estimated two years from now
DOMESTIC INTERNATIONAL
MARKET	 MARKET
44.4%	11.7%
51.1%	20.0%
56.2%	29.8%
Figure 7
Base = 351 respondents. Chart based on average percents.
DataXu 13December 2014
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include the need for standardization of measurement
accountability across programmatic vendors, with
52.7% strongly believing that objectively comparing
programmatic results is difficult when buying interna-
tionally. Similarly, three-quarters (75.8%) are standardiz-
ing or attempting to standardize measurement account-
ability across programmatic vendors; almost three out of
five (59.8%) respondents report they do not yet use a
single centralized reporting tool to pull together all their
domestic and international programmatic vendors and
channels into one dashboard.
While marketers will need to overcome problems with
data integration and standardization, particularly on the
global front, programmatic will help alleviate the risks
associated with questionable publishers and viewability.
“Early in digital marketing, people faced the problem
of not knowing a given geographic region and whether
they were reaching the right customers—or any custom-
ers. Programmatic will help bring a layer of transparency
for marketers working with a trusted partner and remove
some of the historic challenges of adopting digital execu-
tion in new markets,” says DataXu’s Mr. Brown.
As the programmatic revolution continues its rapid
advance, Ms. Pettenati paints a vivid picture of a better
life for brands and agencies—and especially their cus-
tomers—in every part of the world. “Our prospects aren’t
just important in terms of where they are in the funnel,”
she says. “We want them to have a good experience
across all touch points and not retarget them with things
they’re not interested in. We can do that better if we
integrate with our own data. This is where programmatic
becomes a completely unique tool for SAP, helping us de-
liver the most relevant content and the best user journey
to our prospects. Before, we could only do these things
campaign by campaign. Now, they can be the norm.”
Moving a programmatic strategy from domestic to over-
seas markets has its pitfalls, but following established
best practices can help reduce the risk. Some marketing
pros who’ve already traveled the road offer advice on
how to get started and keep the programmatic momen-
tum going.
•Get started and keep moving.
“Don’t get freaked out by the complexity of it,” says
MasterCard’s Mr. Jankowski. “You’re always better off
doing something. In this market, you can test yourself
to the point of paralysis because there are so many
things you can do.
“It’s impossible to conduct an empirical, closed-end
test of every alternative for every part of the stack.
Instead, find a partner you can be successful with, start
working with it, learn with it and then decide where
you want to go next.”
Best Practices for
Global Programmatic
‘Programmatic will help bring
a layer of transparency for
marketers working with a
trusted partner and remove
some of the historic challenges
of adopting digital execution
in new markets.’
SPONSORED CONTENT
•Find a partner you can trust.
“When it comes to fraud protection, aside from the
use of specific tools, a strong partnership can put you
in a better position than working with a lot of differ-
ent DSPs,” says Ms. Pettenati of SAP. “A higher-level
relationship means that it’s not just on us to make sure
that the data is right and that there’s no pixel fraud—
there are more eyes on your campaign, so you can be
more confident you’re running in the right places. This
is especially important overseas, where you see more
fragmentation and smaller websites, and you have less
control over what’s running.”
•Don’t overgeneralize.
“A key challenge is to understand that it’s not one-size-
fits-all in terms of execution across different regions,”
says Mr. Journey of DataXu. “You need to be nimble
and adaptive to meet the specific needs of a given mar-
ket. Don’t look for too many global generalizations—it’s
crucial to have local expertise. If you look at Fortune
500 companies, they’re all structured around regions,
and the marketing functions there all do things differ-
ently, from strategy to creative; what works in Japan
might not work in Korea. Build your programmatic
strategy on adaptable, flexible technologies and variable
standards that let you tweak your execution for local
markets and work with local partners as needed.”
•Focus on audiences, not websites.
“In international markets, people can worry about not
knowing what websites they’re running on. We explain
that we go for audiences, not websites—which fits per-
fectly in SAP’s strategy, but people are uncomfortable
letting it happen,” Ms. Pettenati says. “We try to ac-
commodate requests for specific sites—we look at pri-
vate exchanges and whitelists—but it’s key not to let it
take over. Whitelisting can be a relevant part of your ap-
proach; but if you do too much of that, you lose what
programmatic is all about. It lowers volumes, increases
prices and doesn’t leave much room for optimization. It
may feel safer at the beginning, but it backfires.”
•Find the right approach for your organization.
“Brands that are getting it right are being careful about
the partners they work with and how they work with
them,” says Mr. Brown of DataXu. “Make sure you have
the right solution for what you want to do as a marketer.
Some brands want to do things in-house because it’s the
right approach for them; others prefer to work with an
agency.
“Sometimes people get confused trying to do what
they perceive to be the ’right’ thing. Programmatic isn’t
a particular way of working, in-house or out. It’s going
through your own learning curve and understanding the
right way forward for your business.”
HAVE YOUR ASSETS IN ORDER
“To move into another market, it isn’t a problem to find a partner—it’s more about
having the assets in place to be successful. Do you know how to activate a sale in the
channel? Do you have the content to get someone to click? The issue is that many of
these markets don’t have data about buying preferences or habits; they’re not as evolved
as the U.S. in being able to understand buyer behaviors. We focus on countries where we
know we have the assets to execute a campaign successfully.”
—Raj Rao, global VP, eTransformation, 3M
ABOUT THE SURVEY Advertising Age and DataXu commissioned this online research study about global programmatic. The study was
conducted from Aug. 19 to Sept. 12, 2014, by third-party research firm Advantage Business Research. The final findings are based on 351
respondents made up of 65% marketers and 35% agencies. The margin of error for the total 351 respondents of the survey, at a 95%
confidence level, is +/- 5.2 percentage points.
DataXu 14December 2014
WHITE PAPER
Written by J. Daniel Janzen
Designed by Gregory Cohane
Research by Eniko Skintej and Jeff Demarest
CONTACT US
Karen Egolf
Editorial Director
Content Strategy Studio
kegolf@adage.com
Alex McGrath
Senior Account Executive
amcgrath@adage.com
ABOUT DATAXU
DataXu is a petabyte-scale marketing cloud
that enables marketers to better understand
and engage their customers. Powered by Active
Analytics, our patented approach to programmatic
marketing, the DataXu Marketing Cloud is a suite
of applications that transform big data into better
customer experience—at the speed of life. Our
software helps marketers focus their marketing
investments and achieve optimal results across
all available media formats, devices, channels and
buying modes.With 13 offices in nine countries,
DataXu is powering the digital transformation of
the world’s most valuable brands. Visit
www.dataxu.com for more information.
The Ad Age Content Strategy Studio, an
extension of Advertising Age and adage.com,
works with companies to help them tell their
brand stories their way. Built on Ad Age’s
heritage of editorial expertise and excellence,
the Content Strategy Studio works to develop
the ideas that create an emotional connection
with customers.Through articles, blogs, video,
microsites, research, events, white papers and
other opportunities, it provides end-to-end
solutions for brands that will create the story
that’s fueling today’s conversations.
Storytelling for your brand by the brand that
knows how to tell stories

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Programatic goes Global - DataXu

  • 1. SPONSORED CONTENT PROGRAMMATIC GOES GLOBAL Trends and best practices for transforming marketing worldwide
  • 2.
  • 3. DataXu 3December 2014 The New Global Standard for Customer Engagement The programmatic revolution knows no borders. The same transformation that the U.S. ad industry has been undergoing recently is also showing up in mar- kets around the world as global marketers embrace programmatic to deliver the right message to the right user at the right time wherever they do business. For major brands, the question is no longer whether to use programmatic but what their strategy should look like and how it should be implemented globally. In fact, Advertising Age’s 2014 Global Programmatic Survey, conducted for DataXu, shows that 55% of respondents from brands and agencies said they already have a global strategy in place, and momentum continues to build (Figure 1). The drivers for the broad adoption of programmatic are simple to understand, and similar overseas to do- mestic markets: Brands and agencies use programmatic to increase marketing efficiency, helping them get more out of their budgets. But beyond incremental improve- ments, an effective programmatic strategy can also sig- nificantly change the way a brand does business around Why Global Programmatic Figure 1BUDGETING FOR PROGRAMMATIC AVERAGE % DOMESTIC MARKET AVERAGE % INTERNATIONALLY n Two years ago n Currently n Estimated two years from now What percentage of your online/digital media budget was, is and do you estimate will be bought and/or executed via programmatic technologies? Base = 351 respondents Having transformed advertising markets and practices within the U.S., the programmatic revolution is already well underway in the rest of the world, too. This white paper explores the state of global programmatic today, including the strategies and tools being used, the goals marketers hope to achieve and the impact on relationships among brands, agencies and technology providers. Data from a recent Advertising Age survey, complemented with insights from leading global marketers and technology leaders, reveal a thriving ecosystem of automation and insight that’s helping advertisers reach further with their messages, target and engage more effectively with customers, and drive growth wherever they do business. 44.4% 51.1% 56.2% 11.7% 20.0% 29.8% SPONSORED CONTENT
  • 4. DataXu 4December 2014 the world by enabling the creation of global standards as well as fine-tuned campaign optimization for local markets. More than a specialized tactic, programmatic is being used as a core element of branding as well as for performance-oriented campaigns and for every ad format. As with programmatic on a domestic level, global programmatic strategies present a learning curve. While the principles remain the same everywhere—using automation and big data across channels to achieve higher levels of targeting, relevance, efficiency and impact—regional variations add a layer of complexity when they’re applied on a worldwide scale. Localized approaches must adapt to differences in the availability of data, consumer privacy regulations, inventory, and popular formats and devices. Organizational structures are evolving in tandem with strategies as brands and agencies seek the best way to build their programmat- ic expertise and effectiveness. Relationships among brands, agencies and technology providers are develop- ing similarly. And this is only the beginning. A recent forecast by Magna Global, the digital media buying arm of Interpub- lic’s Mediabrands, predicts that worldwide media sales via programmatic will rise 52% this year to $21 billion and 27% over each of the next four years to $53 billion in 2018. Marketers are equally bullish about the opportuni- ties afforded by their programmatic investments. In the coming years, they expect to see a greater volume of higher-quality inventory sold through programmatic, increasing consolidation of tools and vendors across markets and an improved ability to gain a unified view of customer engagement worldwide. As they master the nuances of creating and executing localized, personal- ized marketing strategies on a global scale, the return on these investments will only grow. Programmatic is truly changing the marketing world. Beyond Efficiency: Programmatic for Performance and Branding While the level of understanding of programmatic buying among marketers has increased greatly since its inception, definitions still vary. Brands and agencies often associate programmatic with phrases such as audience targeting, real-time bidding, automation and optimization—all important elements of the strategy, but not an exhaustive description. It can be helpful to think of programmatic in terms of its benefits for marketers. This begins with campaign and operational efficiencies—brands and agencies can define segments better, and more easily and efficiently execute cam- paigns, while standardizing their operations with fewer tools to reduce training and overhead. In the words of Bruce Journey, co-founder and chief customer officer of DataXu, “Programmatic lets you get the dumb work out of the way so you can focus on smart work.” On another level, programmatic also makes it possi- ble to capture new insights into customer characteristics and behaviors fueled by analytics performed on data from various first-, second- and third-party sources. Real-time visibility into customer engagement can enable continual optimization to make every impression THE VALUE OF PROGRAMMATIC “Programmatic helps us maximize our spend and do more things than we could otherwise afford.” —Ben Jankowski, group head for global media, MasterCard
  • 5. DataXu 5December 2014 SPONSORED CONTENT more effective—especially when programmatic tools are implemented on a global scale, making such strategies viable even in smaller markets. The programmatic conversation often begins with efficiency—the ability to buy media more cheaply and improve workflows. The operating expenses required to run digital advertising can be several times the cost of running ads on television and other traditional media, so the economic benefits of programmatic practices such as consolidated buying and custom exchanges are especially attractive for marketers and agencies under pressure to keep costs down. Drawn by these benefits, the first companies to embrace programmatic in a given market are often per- formance marketers looking for a faster, cheaper way to execute campaigns, with a keen focus on metrics. For already-strong brands, the difficulty of measuring brand health can be another good reason to use program- matic for performance goals instead. “We’re looking to drive sales,” says Raj Rao, global VP, eTransformation, at 3M. “For example, almost all of the sales for our Littmann Stethoscope are online, so a typical program- matic buy for us would be to engage someone to view a video about the device and its telehealth capabilities, and then send them into a channel like Medshop to complete the purchase.” But efficiency is just part of the picture. “People talk about efficiency and automation, but they’re only the tip of the iceberg for the value of programmatic,” says Martin Brown, VP, managing director of U.K. and Nor- dics, DataXu. “By standardizing around a particular set of programmatic technologies, companies can roll out cam- paigns with a global scale from centralized points within each region, aggregate and capture information around branding and performance marketing activity, and lever- age this data to drive better marketing outcomes.” By understanding a customer’s reaction to a message in real time, marketers can target and address that customer on the impression level for true one-to-one engagement. This blend of efficiency and effectiveness is mirrored in the way marketers use programmatic for both brand- ing and performance. “We’re trying to make program- Figure 2BRANDING VS. PERFORMANCE ADS What percentage of your digital media purchased or executed using programmatic technologies is for branding ads and what is for performance advertising? 47.1% 51.5%52.9% 48.5% n Branding n Performance AVERAGE % DOMESTIC MARKET AVERAGE % INTERNATIONALLY Base = 351 respondents
  • 6. matic a big part of most of our campaigns, including some brand work,” says Ben Jankowski, group head for global media at MasterCard. “That being said, most of our branding activities revolve around premium buys tied into other media programs and events, such as a pre- mium buy on music websites to support a music festival in tandem with radio and TV time, print and outdoor advertising, and other consumer experiences. Program- matic is more about efficiency and performance for us.” For less-established brands building a name in a new market, the efficiency benefits of programmatic can outweigh the difficulty of measuring branding impact, as lower media costs and improved workflows help spread their message further than they could through traditional methods. Indeed, the proportion of program- matic buys for branding ads is slightly higher overseas than in domestic markets, and is roughly equal to global programmatic buys for performance ads—51.5% com- pared with 47.1%, according to the survey (Figure 2). Whether for branding or performance, marketers take advantage of the ability to buy ads based on audi- ences vs. content overseas just as they do domestically. According to the survey, 58.8% of domestic and 56.8% of international programmatic digital media buys are done for audience, compared with 41.2% domestic and 43.2% international for content. Where Programmatic Is on the Rise—and Why It’s no surprise that marketers consider the U.S. to be the most mature region in the use of programmatic buying, but others aren’t far behind. Asked about the importance of various regions for international expan- sion of programmatic (Figure 3), respondents to the Ad Age survey ranked Canada, Asia and Western Europe closely behind, as might be expected—but also fre- quently mentioned South America, the Caribbean and Figure 3PROGRAMMATIC EXPANSION AROUND THE WORLD How important is each of the following regions for expanding internationally? 50.0% 48.2% 41.1% 42.5% 41.0% 29.4% 24.7% 24.4% 23.1% 20.0% 17.3% 12.0% United States Canada Asia Western Europe South America Caribbean & Mexico Eastern Europe Australia Central America Middle East Africa 3.43 3.86 4.46 4.584.804.85 5.07 5.765.62 6.14 6.12 Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all important and 10 = extremely important DataXu 6December 2014 •Average rating
  • 7. SPONSORED CONTENT DataXu 7December 2014 Mexico, Eastern Europe and Australia. In developed markets with a mature media and advertising ecosystem, the sheer volume of supply can simplify marketers’ ability to get value, especially when armed with the right data, making them particularly ripe for programmatic. In less sophisticated markets with fewer media choices, publishers may tend to rely on a larger share of premium buys. Still, says Mr. Jankowski of MasterCard, “There are only a handful of markets where we’re not already using programmatic, and we’re leading toward being truly global in our approach.” Multinational software company SAP makes no distinction between its domestic and overseas use of programmatic. “We’ve approached programmatic in a global manner across North America, Latin America, EMEA and Asia-Pacific. Our investments vary across re- gions because of differences in our marketing budgets, but it’s not limited by our level of familiarity and under- standing,” says Valentina Pettenati, director of integrat- ed media for EMEA/MEE at SAP. However, this global approach doesn’t mean one size fits all. “Across and even within regions, our business objectives and go-to- market strategy can be quite different. It makes sense to talk about North America as a region, but within EMEA, for example, the U.K. is very different from Italy.” Decisions about where to use programmatic, and to what extent, can come down to the math. In a less expensive media market, it may be harder to justify the cost of programmatic tools. “The fixed cost you pay for technology may be the same in each market,” Ms. Pettenati says. “But in a lower-cost media market, it can account for a dramatically higher percentage of your budget than in a higher-cost market. You may be willing to spend a higher percentage of your budget on programmatic, but does it make sense to spend your budget that way in India?” Mr. Rao of 3M says China, the U.K., Brazil, Mexico and, to a lesser extent, Japan are key markets for the company’s programmatic strategy. “We begin with the viewpoint of where we can achieve the highest return on our programmatic investments,” he says. “We want to have a clear expectation of how much programmatic can drive improvements in share of voice, search engine rankings and conversions.” Mr. Rao also differentiates between the engagement models for business-to-busi- ness—characterized by content marketing, paid social activity and deep catalog links—and business-to-con- sumer, where user reviews, videos and other emotional appeals play a deeper role. Other factors shaping global programmatic strategies include differences in device types and media usage. In the U.S., for example, digital marketers often focus on tablets and desktops being used in the office during midweek working hours, while in emerging markets, mobile devices play a larger role, with far fewer desk- tops in the mix. In the key Chinese market, buying centers on specific social platforms such as Baidu and EXECUTING PROGRAMMATIC GLOBALLY “There may be markets like North America that are further ahead in programmatic, but many brands want to cover as much ground as they can to achieve strategic scale. They might lead with the bigger markets in North America and Europe but they’re also seeking to execute across the globe rather than doing things one small piece at a time.” —Martin Brown, VP, managing director of U.K. and Nordics, DataXu Decisions about where to use programmatic, and to what extent, can come down to the math.
  • 8. DataXu 8 Weibo, and many buying agencies are owned by e-com- merce platforms whose head-to-head competition for referral fees leads them to enforce strict rules about where traffic is allowed to go. Such an idiosyncratic market can be difficult to incorporate into a truly global programmatic technology infrastructure and strate- gy—though the size of the Chinese consumer class can make the effort worthwhile. Another factor facing marketers using programmatic globally is that data sources vary greatly across regions, making programmatic buying more difficult in some areas. Much of the analytics and audience segmenta- tion enabled by programmatic is driven by third-party data sources that aren’t available in every country. “We have SAP-owned data everywhere we do business,” Ms. Pettenati says. “But once you go beyond North America, second-party data becomes less available, and there may be few publishers who can provide much information for your campaign. Third-party data differs as well—it’s easier in English-speaking markets, but it becomes much harder to find the data to profile a campaign in MENA, so you have to adapt. But again, we don’t change our approach but rather the way we execute the campaign.” It’s still possible to use programmatic effectively even without cookie-based third-party data, such as by relying more heavily on the brand’s own data or infor- mation aggregated through the execution of standard media campaigns. It just calls for a flexible approach to determine what will be feasible in each market. In fact, these emerging markets might turn out to be better positioned for the future than established markets built around cookies, an approach vulnerable to new regula- tions, such as mandatory opt-in, in the ongoing battles over consumer privacy in the U.S. and elsewhere. Privacy regulations also limit the extent to which mar- keters can put behavioral data to work. “In the U.S., we can use our [demand-side platform] to capture behavior Figure 4DATA & ANALYTICS IN MARKETING EFFORTS In which of the following ways are data and analytics being integrated into marketing efforts for global brands in your domestic markets vs. international? Base = 266 respondents (those who are standardizing or attempting to standardize measurement and accountability across programmatic vendors) December 2014 Campaign optimization Improve strategies Improve success metrics Understand customers’ buying journey Improve ad investment (traditional to programmatic) Audience development Improve cross-channel customer experience Creative development Understand share of voice Rapid response to trends/events Product development Other (increase ROI, leverage across all media, KPI standardization, etc.) 2.6% 62.8% 62.0% 59.8% 59.0% 54.9% 51.9% 47.0% 44.0% 35.7% 35.3% 30.8%
  • 9. DataXu 9 SPONSORED CONTENT December 2014 beyond clicks and get a broader view of our customer engagement,” says 3M’s Mr. Rao. “In other countries we don’t see that data, so we don’t know how to bring that profile into retargeting programs. Programmatic data becomes more transactional overseas, rather than driving our CRM roadmap as in the U.S.” In verbatim answers about the use of data for pro- grammatic, respondents to the Ad Age survey cited a greater comfort level in domestic markets, a closer rela- tionship to the data and the companies that manage it in domestic markets and greater access to data domes- tically. Respondents also said that they tend to develop programs domestically and then try to adapt them to global markets. Asked about the role of data in their programmatic strategies domestically compared to globally, respon- dents cited increased use of campaign optimization, strategic refinement and improved success metrics, as well as other elements (Figure 4). Choosing and Implementing Programmatic Tools The technology stack for programmatic, overseas as in domestic markets, is generally built around the demand-side platform (DSP), a key enabling layer that lets advertisers manage multiple ad and data exchange accounts as well as bid for and buy ads through a single point of control. Other elements can include data management platforms (DMPs), data providers, inven- tory sources, verification services, viewability solutions, transactional systems and buy-side forecasting tools. According to the Ad Age survey, the level of satis- faction with programmatic technologies being used internationally tends to lag behind the satisfaction with tools used domestically, particularly in the U.S. (Figure 5). In some areas, this may reflect maturation or cultural differences between markets. For example, global vendors were rated significantly lower on consumer HOW SATISFIED ARE YOU WITH PROGRAMMATIC TECHNOLOGY VENDORS? Rate the level of satisfaction of each of the following when purchasing digital media through programmatic technology vendors in your domestic market and in your international markets. Figure 5 Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all satisfied and 10 = extremely satisfied Targeting options Reach and/or scale Privacy Analytics and reporting capabilities Pricing Operational efficiency Creative formats Inventory quality Consumer insights Inventory transparency 51.3 51.2 50.7 49.3 47.0 45.7 44.2 41.4 41.0 40.4 33.6 32.2 35.3 35.6 31.1 32.2 33.1 32.3 30.8 32.8 n Domestic n International Numbers are percentages
  • 10. DataXu 10December 2014 insights (30.8% satisfaction compared with 41.0% for domestic) and targeting options (33.6% vs. 51.3%)— measures that may also reflect the relative lack of sec- ond-party—and especially third-party—data in markets, particularly outside the U.S. In addition to consumer insights, brands and agencies tend to be least satisfied with the pricing advantages available through global programmatic. This may be because the economics of programmatic are most favorable in higher-cost domes- tic markets, where the efficiency benefits of automated buying yield larger savings relative to the overall spend. Still, similar disparities exist in every area of functionality, suggesting a more pervasive discontent. As with domestic programmatic, providers of global programmatic technology tend to focus on more narrowly defined tools, with just a few seeking to build complete solutions. Still, working with fewer vendors remains the goal for most brands and agencies. “You can have one core technology globally, and there’ll always be others you might have to integrate into it for viewability, third-party data or other requirements,” says Mr. Brown of DataXu. “I understand why people might feel that one technology might be better in a given market than another, but the right core functionality CUTTING BACK ON TECHNOLOGY PARTNERS “We may work with a special partner here and there for a particular region or purpose, such as a keyword targeting tool for EMEA or a fraud detection tool for North America, but we’re strict about using only one DSP. It used to be that, when a campaign ended, the intelligence stayed with the five or eight tools we’d worked with, and we had no visibility into this intelligence we’d built with our own budget. So we made the strategic decision to go with one preferred partner.” —Valentina Pettenati, director of integrated media for EMEA/MEE, SAP Figure 6WHAT DO YOU WANT FROM A PROGRAMMATIC VENDOR? Please rate how important each of the following is when selecting programmatic technology vendors. 80.1% 78.1%79.8% 77.2% 76.4% 72.4% 71.2% 68.4% 66.2% 65.0% Targeting options Analytics and reporting capabilities Inventory quality Reach and/or scale Pricing Operational efficiency Inventory transparency Consumer insights Creative formats Privacy 7.887.958.168.078.208.358.388.348.598.62 Base = 351 respondents. Chart based on 8-to-10 ratings, where 1 = not at all important and 10 = extremely important •Average rating
  • 11. DataXu 11December 2014 SPONSORED CONTENT and scalable technologies can be replicated in local mar- kets just as well as a local provider could do, with the advantages of fewer tools and relationships to manage, and greater consolidation and standardization.” Still, finding that preferred partner is not always a simple task. “It’s not hard to find an integrated system for a marketer—the challenge comes if you want best- in-class in every discipline, from ad serving to dynamic creative optimization to bidding on public and private exchanges,” says Mr. Journey of DataXu. “Do you add together all the best parts or just do it the easy way? Nobody ever got fired for buying Google, but they’re trying to dominate by owning all the data. Do you want all your data to be owned by one company and have to rent it back from them?” The major tool selection criteria most often mentioned in the Ad Age survey include targeting options (80.1%), analytics and reporting capabilities (79.8%) and inven- tory quality (78.1%), but respondents placed slightly different emphasis when it comes to the criteria for actually using these tools (Figure 6). These include pro- tection against ad fraud (72.1%), appropriate skill sets on team (69.9%) and guaranteed brand safety (68.1%). Evolving Agency Relationships and Internal Structures The adoption of programmatic buying is also show- ing up in its impact on the relationships in a brand’s extended marketing organization. “We see a lot of different models,” says DataXu’s Mr. Brown. “Bringing programmatic in-house is a hot topic, and many brands have done this successfully. But agencies often retain strong relationships with their clients nonetheless, such as becoming involved in strategy and tool selection.” It’s hardly a novelty for brand-agency relationships to be described in other than black-and-white terms, and the variability and subjectivity of these partnerships comes through in the Ad Age survey. While a majority of both agencies and brands agree that the agency takes the lead on global policies for implementation, measurement, and reporting and analysis, marketers are much more likely to give themselves credit for playing this role while agencies are more likely to describe the relationship as collaborative. This is especially true for strategy, which almost half of agencies describe as a collaboration, compared with fewer than one-third of their clients. Coming up to speed on programmatic tools and strategies is imperative for every element within the advertising ecosystem—including technology provid- ers, which have an increasingly important role to play. Respondents to the Ad Age survey report that agencies and technology vendors are the most important sources for education in programmatic technologies, but it’s a group effort. “Education happens through a virtuous circle—technology providers, brands and agencies are learning together as we move through the space,” Mr. Brown says. “A technology company can’t say that they’re the arbiters of everything programmatic because the expertise and strategy coming from brands and agencies are equally critical to help raise the level of understanding.” At SAP, an Integrated Media team within the brand PROGRAMMATIC’S PRESSURE ON MARKETING ECOSYSTEMS “There’s a lot of pressure on the economics of the marketing ecosystem. Marketers want to pay less, procurement people are getting involved in these decisions—it’s getting harder for agencies to make money. Increasing transparency on price, data, inventory and supply can expose a lot of the obfuscation that can happen in the digital environment.” — Bruce Journey, co-founder and chief customer officer, DataXu
  • 12. DataXu 12December 2014 experience group works with marketing stakeholders on any campaign. “We view the relationship among our group, our agency and our DSP as a three-legged stool, with Integrated Media taking the lead from a client perspective,” Ms. Pettenati says. “Having a direct relationship with our DSP does require a lot of work in terms of understanding the impact of every decision, but it’s a matter of knowing what you want. Our team has a strong technical understanding of media and knew what we wanted—from top-level strategy to exe- cution, trafficking and tracking—so it was just a matter of getting it done.” It would be natural to expect that the transforma- tion of marketing through programmatic would bring a similar change in organizational structure. In reality, almost 62% of the brands and agencies responding to the Ad Age survey are not restructuring departments or their organizations to take advantage of programmatic technologies. This may be because they have initially focused on the changing nature of the agency-client relationship. It may also be that more organizations will restructure as the sophistication and extent of their programmatic strategies increase going forward. In the meantime, the approaches brands and agencies are using to incorporate programmatic into their organizations vary widely. Some are weaving programmatic tools and practices into existing groups while others are creating specialized teams or centers of excellence, as at SAP. Some brands are outsourcing to agencies with the spending power to invest in high-end programmatic tools, while others are developing propri- etary tools of their own. Looking Ahead: Marketing Becomes Programmatic The share of budgets allocated to programmatic buying is growing steadily in both domestic and interna- tional markets, as is the use of digital media (Figure 7). “Programmatic is being adopted beyond specific tactics and audiences to become a true strategy for brands, and we’ll see that increase and spread beyond digital into TV and other areas,” DataXu’s Mr. Brown says. “It’s a development process as brands work to gain access and aggregate the right kinds of historical and real-time data to inform the strategy, but it’s a constant topic for CMOs and CEOs these days.” Ms. Pettenati says SAP is also seeing growth in pro- grammatic spending. “We expect programmatic to be a much bigger percentage of our ad spend,” she says. “With our direct DSP relationship, we’ll be able to keep the data on our campaigns. We’ll also be able to run multiple campaigns out of the same platform and do things at massive scale, such as to integrate sequential messaging and perform dynamic optimization.“ As they increase their programmatic spending, marketers also expect to see higher-quality inventory, continuing a strong trend. Almost two-thirds of brands and agencies report seeing higher-quality inventory on open exchanges internationally now compared with two years ago, and 81.8% anticipate even higher quali- ty two years from now. This growth in programmatic comes as market- ers continue to try to remove stumbling blocks that can make it difficult to realize the full potential of the technology. Key pain points cited in the Ad Age survey PROGRAMMATIC SPENDING FORECAST What percentage of your domestic and international digital media budgets is handled programmatically? Two years ago Currently Estimated two years from now DOMESTIC INTERNATIONAL MARKET MARKET 44.4% 11.7% 51.1% 20.0% 56.2% 29.8% Figure 7 Base = 351 respondents. Chart based on average percents.
  • 13. DataXu 13December 2014 SPONSORED CONTENT include the need for standardization of measurement accountability across programmatic vendors, with 52.7% strongly believing that objectively comparing programmatic results is difficult when buying interna- tionally. Similarly, three-quarters (75.8%) are standardiz- ing or attempting to standardize measurement account- ability across programmatic vendors; almost three out of five (59.8%) respondents report they do not yet use a single centralized reporting tool to pull together all their domestic and international programmatic vendors and channels into one dashboard. While marketers will need to overcome problems with data integration and standardization, particularly on the global front, programmatic will help alleviate the risks associated with questionable publishers and viewability. “Early in digital marketing, people faced the problem of not knowing a given geographic region and whether they were reaching the right customers—or any custom- ers. Programmatic will help bring a layer of transparency for marketers working with a trusted partner and remove some of the historic challenges of adopting digital execu- tion in new markets,” says DataXu’s Mr. Brown. As the programmatic revolution continues its rapid advance, Ms. Pettenati paints a vivid picture of a better life for brands and agencies—and especially their cus- tomers—in every part of the world. “Our prospects aren’t just important in terms of where they are in the funnel,” she says. “We want them to have a good experience across all touch points and not retarget them with things they’re not interested in. We can do that better if we integrate with our own data. This is where programmatic becomes a completely unique tool for SAP, helping us de- liver the most relevant content and the best user journey to our prospects. Before, we could only do these things campaign by campaign. Now, they can be the norm.” Moving a programmatic strategy from domestic to over- seas markets has its pitfalls, but following established best practices can help reduce the risk. Some marketing pros who’ve already traveled the road offer advice on how to get started and keep the programmatic momen- tum going. •Get started and keep moving. “Don’t get freaked out by the complexity of it,” says MasterCard’s Mr. Jankowski. “You’re always better off doing something. In this market, you can test yourself to the point of paralysis because there are so many things you can do. “It’s impossible to conduct an empirical, closed-end test of every alternative for every part of the stack. Instead, find a partner you can be successful with, start working with it, learn with it and then decide where you want to go next.” Best Practices for Global Programmatic ‘Programmatic will help bring a layer of transparency for marketers working with a trusted partner and remove some of the historic challenges of adopting digital execution in new markets.’
  • 14. SPONSORED CONTENT •Find a partner you can trust. “When it comes to fraud protection, aside from the use of specific tools, a strong partnership can put you in a better position than working with a lot of differ- ent DSPs,” says Ms. Pettenati of SAP. “A higher-level relationship means that it’s not just on us to make sure that the data is right and that there’s no pixel fraud— there are more eyes on your campaign, so you can be more confident you’re running in the right places. This is especially important overseas, where you see more fragmentation and smaller websites, and you have less control over what’s running.” •Don’t overgeneralize. “A key challenge is to understand that it’s not one-size- fits-all in terms of execution across different regions,” says Mr. Journey of DataXu. “You need to be nimble and adaptive to meet the specific needs of a given mar- ket. Don’t look for too many global generalizations—it’s crucial to have local expertise. If you look at Fortune 500 companies, they’re all structured around regions, and the marketing functions there all do things differ- ently, from strategy to creative; what works in Japan might not work in Korea. Build your programmatic strategy on adaptable, flexible technologies and variable standards that let you tweak your execution for local markets and work with local partners as needed.” •Focus on audiences, not websites. “In international markets, people can worry about not knowing what websites they’re running on. We explain that we go for audiences, not websites—which fits per- fectly in SAP’s strategy, but people are uncomfortable letting it happen,” Ms. Pettenati says. “We try to ac- commodate requests for specific sites—we look at pri- vate exchanges and whitelists—but it’s key not to let it take over. Whitelisting can be a relevant part of your ap- proach; but if you do too much of that, you lose what programmatic is all about. It lowers volumes, increases prices and doesn’t leave much room for optimization. It may feel safer at the beginning, but it backfires.” •Find the right approach for your organization. “Brands that are getting it right are being careful about the partners they work with and how they work with them,” says Mr. Brown of DataXu. “Make sure you have the right solution for what you want to do as a marketer. Some brands want to do things in-house because it’s the right approach for them; others prefer to work with an agency. “Sometimes people get confused trying to do what they perceive to be the ’right’ thing. Programmatic isn’t a particular way of working, in-house or out. It’s going through your own learning curve and understanding the right way forward for your business.” HAVE YOUR ASSETS IN ORDER “To move into another market, it isn’t a problem to find a partner—it’s more about having the assets in place to be successful. Do you know how to activate a sale in the channel? Do you have the content to get someone to click? The issue is that many of these markets don’t have data about buying preferences or habits; they’re not as evolved as the U.S. in being able to understand buyer behaviors. We focus on countries where we know we have the assets to execute a campaign successfully.” —Raj Rao, global VP, eTransformation, 3M ABOUT THE SURVEY Advertising Age and DataXu commissioned this online research study about global programmatic. The study was conducted from Aug. 19 to Sept. 12, 2014, by third-party research firm Advantage Business Research. The final findings are based on 351 respondents made up of 65% marketers and 35% agencies. The margin of error for the total 351 respondents of the survey, at a 95% confidence level, is +/- 5.2 percentage points. DataXu 14December 2014
  • 15. WHITE PAPER Written by J. Daniel Janzen Designed by Gregory Cohane Research by Eniko Skintej and Jeff Demarest CONTACT US Karen Egolf Editorial Director Content Strategy Studio kegolf@adage.com Alex McGrath Senior Account Executive amcgrath@adage.com ABOUT DATAXU DataXu is a petabyte-scale marketing cloud that enables marketers to better understand and engage their customers. Powered by Active Analytics, our patented approach to programmatic marketing, the DataXu Marketing Cloud is a suite of applications that transform big data into better customer experience—at the speed of life. Our software helps marketers focus their marketing investments and achieve optimal results across all available media formats, devices, channels and buying modes.With 13 offices in nine countries, DataXu is powering the digital transformation of the world’s most valuable brands. Visit www.dataxu.com for more information. The Ad Age Content Strategy Studio, an extension of Advertising Age and adage.com, works with companies to help them tell their brand stories their way. Built on Ad Age’s heritage of editorial expertise and excellence, the Content Strategy Studio works to develop the ideas that create an emotional connection with customers.Through articles, blogs, video, microsites, research, events, white papers and other opportunities, it provides end-to-end solutions for brands that will create the story that’s fueling today’s conversations. Storytelling for your brand by the brand that knows how to tell stories