The Programmatic Mind

The Latest News and Resources for CMOs in a Programmatic World

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Is The Medium
The Message?

“The medium is the message.” That seminal phrase, first spoken by Canadian communication theorist Marshall McLuhan, has become a timeless representation of media engagement.

Many have tried to decipher its meaning, but it might be more elusive than we think. Analysts have pointed out that when McLuhan spoke of “the medium” he wasn’t referring to television or radio, but how electronic media can become “an extension of ourselves.” In the same way that a hammer extends our arms, making it possible for us to do something we couldn’t achieve before, a medium – at least by McLuhan’s definition – extends our reach and capabilities in a new and metamorphic way.

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When a medium is put into action, it affects everything, from interpersonal dynamics to attitudes and public sentiment.

Mobile advertising that helps to create an experience, rather than merely incite an action, can turn consumers into advocates.

If we want advertising to add to the mobile medium in a meaningful way, we have to recalibrate our thinking and our approach.

Expandable ads, rich media, interstitials, video—all of these can be used to add value to the mobile environment.

The “message” of which McLuhan spoke is a tricky point, too. Most think that by message he meant content: a TV show, a radio ad, a book. In fact, it’s more likely that he was referring to the change brought about by a medium—say, that hammer. When a medium is put into action, it affects everything, from interpersonal dynamics to attitudes and public sentiment.

Think of it like this: what’s being communicated isn’t as important as the way in which it’s being communicated.

The Internet didn’t exist in its current form when McLuhan wrote the book “Understanding Media: The Extensions of Man.” Remarkably, his ideology and writings don’t just hold water today, they are eerily prescient. The question now is this: if a simple hammer is a medium for change, is the smartphone the true embodiment of this principle?

Mobile Shaping our Lives

Mobile devices are an extension of ourselves. There’s really no other way to look at it. The utility they provide, from maps to shopping, banking, and general communication, has expanded our capabilities perhaps more than anything that came along prior. Mobile is influencing language, the way we talk to others, and how we engage with both people and brands. In other words, mobile technology has completely altered the way we function and exist—and it’s creating new behavior and opportunities for the world at large.

What this all means is that a consumer’s reaction to mobile content is as important as what it promises to do for them. As marketers, we’re preconditioned to create compelling offers. We’ve been trained to select platforms and formats based on their ability to effectively convey our messaging. We gravitate toward technology like programmatic, as it allows us to match offer to audience and produce dynamic, uber-relevant campaigns.

Think about the vast amounts of data now available to advertisers. Whereas once marketers relied on very limited measurement tools to determine who saw their ads in offline media channels, we’re now able to pinpoint our perfect audience wherever they are, and distribute highly personalized messaging. That puts even more of an emphasis on the advertising offer. With the power to customize messaging at our fingertips, we often focus on providing value above all else.

But in order to really bring about McLuhan’s brand of change, which when we’re talking marketing comes in the form of engagement, we have to consider how consumers will respond to not only what we have to say, but the medium with which we say it. Will our content provoke an emotional reaction? What impression is likely to stay with prospects after they’ve seen an ad and moved on? These considerations are just as important as the ad content itself, particularly when it’s transmitted through a mobile device.

That’s because smartphones are increasingly perceived as an intimate and irreplaceable part of their users’ lives. For many, they’re the primary means of accessing digital content, social media, video, and much more. Mobile devices have gone from a convenience to being impossible to live without. According to one study conducted for Motorola, 60 percent of Americans—and 84 percent of 18 to 29 year olds—sleep with their phones. What’s more, 17 percent of women said they would rather give up their best friend than go a week without their mobile device.

As their reliance on mobile devices has grown, consumers have also adjusted their expectations of the medium. Now, they naturally look for information and messages to be on point. They’ve seen enough precision-targeted ads to know that mobile marketing can be contextually relevant, deliver real value, be additive to the information they actively sought, and complement their current wants and needs.

Tribes and Traditional Media

Sometimes, those needs include belonging to something bigger than themselves. Another aspect of McLuhan’s discourse has to do with the idea that electronic media can create a new kind of tribal society, much the same way that spoken stories and the early reproduction of written content did in years past. He coined the expression “global village” to describe this phenomenon.

When you think about mobile media’s ability to capture critical moments in our society, whether it’s a news story that breaks on Twitter or an event that’s live-streamed on Periscope, it’s plain to see that mobile technology can contribute to building modern-day tribes.

The marketing opportunity here lies in brand tribes—activating them, and feeding their desire for information. If we can create branded content that offers greater insight into a company, its heritage, its values, and its philosophy, we can energize and rally fans. Mobile advertising that helps to create an experience, rather than merely incite an action, can turn consumers into advocates. Those ads can greatly extend a brand’s reach and positively influence its ideal audience.

That isn’t where mobile’s transformative influence ends. Back in 2014, Forbes reported that the simultaneous use of a second screen with TV is “the new normal.” Increasingly, that screen belongs to a smartphone, so not only is mobile modifying how consumers communicate with each other, it’s altering traditional consumer behavior...in spite of the fact that it’s been deeply entrenched for decades. Due in large part to its constant close proximity to users, mobile is proving to be the more powerful medium. The content it delivers is immediate and interactive, and provides value far beyond entertainment.

More and more, that content is also location-specific. Location-based mobile technology has allowed marketers to redesign the way consumers shop. We can guide them through stores straight to the products they seek, and mobilize buyers in real time. Geo-specific advertising fits in with the new mobile-first behavior in that it serves a tangible purpose and affects societal behavior at large. But to properly connect with modern audiences, marketers must keep their mobile content both utility-driven and interesting. It needs to be seamlessly integrated into the consumer’s mobile experience.

Overall, mobile has become such a necessary extension of our lives that it feels like X-ray vision or added intelligence. Advertising, therefore, should be that much more personal and useful, or it will only intrude and disrupt the user.

The Role of “Native” Ads

The concept of seamless integration goes hand in hand with our theoretical “native” advertising of today. McLuhan wrote that, “No medium has its meaning or existence alone, but only in constant interplay with other media.” Mobile, combined with a truly native ad format, has the potential to add value without intruding too much on your audience.

Effectively executing on this potential is more easily said than done. In its current state, most native advertising doesn’t provide truly useful information when and how consumers need it most. Instead, it’s used as cover for the same old ad message.

If we want advertising to add to the mobile medium in a meaningful way, we have to recalibrate our thinking and our approach. Native isn’t the push media of days gone by, and it shouldn’t be treated that way. It can certainly take customers further down the purchase funnel, but only when the content is customized, compelling, and relevant to the consumer on multiple levels.

Native ads, whether on mobile or the desktop, have to be communicated in such a way that they’re as much a part of the medium as the medium itself. This is something that many marketers still struggle with. Research has shown that some consumers still aren’t always clear on what constitutes a native ad, so transparency is one area in need of improvement. Another is imparting value. We need to get to the point where consumers see native advertising not as marketing in disguise, but as useful information that can enhance their mobile experience.

Last year, the IAB and Edelman Berland released a guide to producing better sponsored content that was based on the result of a consumer survey. Among the findings were that brands should strive to be relevant, authoritative, and authentic when creating native ads. They should try to tell a story, and of course, pick the right partner site.

All of these guidelines are consistent with what we know to be true about modern-day ads: they resonate with consumers when they provide value. That value can come in the form of the brand’s expertise and unique perspective on their market, but it can also be informative content proffered to the customer on behalf of the brand.

Native content is primed to become another extension of the consumer that “the medium is the message” mantra speaks about. By educating mobile users—as Home Depot does when it tells them how to properly hang a picture, or Pantene does by offering hair care advice—brands can help them achieve something they couldn’t do before. When marketers devise innovative native ads that add value to the web or mobile experience by providing information, those ads become practical for brands and customers alike.

A Medium Within a Medium?

When we talk about mobile’s role in the new media landscape, we can’t overlook apps. But where do they fit into the mix? One way of looking at it is that mobile apps straddle mediums; they have a lot in common with desktop sites, but offer content in a unique, medium-specific package. Another is to think of them as a medium within a medium.

As such, mobile apps offer a new host of possibilities for engaging consumers. Expandable ads, rich media, interstitials, video—all of these can be used to add value to the mobile environment. At the same time, the utilitarian format of apps makes them feel as though they’re owned entirely by the brand. To ingratiate themselves with consumers, in-app ads must deliver messaging with a similar purpose, such as facilitating an action, or making a mobile act easier. Consumers visit apps with a goal in mind, whether it’s to read the news, catch up on social updates made by friends, or send a message. Shouldn’t the ads they see serve their needs in a similar way?

So, is the Medium the Message?

It’s been more than fifty years since McLuhan’s theory was unleashed on the world. Did he get it right then? Does it apply now?

mobile is transformative. we’ve argued it’s a medium that’s changing us by being additive to our knowledge, entertainment, and experiences. is it singularly the message at the same time? we think so. it’s ability to shape and mold our lives, and provide information and utility, is so important that we think it’s an unparalleled extension of ourselves that challenges all conceptions of communications, media, and marketing. if so, let’s go forth and build a mobile consumer experience that has not been imagined to date.

Where Do You Stand With Location?

Location, location, location! For more than a century, this has been the mantra for brick and mortar businesses to attract the most customers. However, with advanced location-enabled devices in the hands of nearly every person on the planet, location has even greater meaning. Today, consumers are “always on” in today’s connected world and more likely to make their purchase decisions instantaneously than ever before. We have only scratched the surface with real-time location product offerings like Uber (transportation) and Seamless (food delivery), as well as other location-aware apps we probably take for granted in the weather, sports and entertainment categories, among others.

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Getting location right requires a high level of precision and a true understanding of how to make location data work for you and your brand.

Businesses open and close regularly, so making sure that information is accurately represented in your data set is crucial.

As marketers, think about the amazing possibilities to reach people in a store, a restaurant, a stadium, or any other point of interest (e.g. Grand Canyon, Statue of Liberty) in real time. In doing so, we have the opportunity to deliver the most relevant and valuable messaging to trigger behaviors at a single moment when we know a customer’s intent.Additionally, we can use these location datasets and visitation patterns to define new audience segments like “automobile intenders” or “health conscious customers.” Unlocking these location-based segtments offers new ways to think about brand prospects, and where to reach them to drive business growth.

Yet, despite these amazing opportunities, getting location right requires a high level of precision and a true understanding of how to make location data work for you and your brand.

At the end of the day, it is important to recognize that not all location data and targeting opportunities, are equal. For example, the opportunity is not the same for someone in a fast food restaurant as it is for the person in a nearby electronics store. Their intent at that time is completely different. This highlights the importance of matching real-time customer data to the correct location context in order to distinguish audiences in specific stores, despite the fact they are right next to each other.

Solving this problem requires technology that draws precise boundaries around specific locations or points of interest (xAd does this with our patented Blueprints technology). This allows us to validate signals from mobile devices to a defined place and connect people to places with purpose.

As you explore location marketing, you should consider the following:

1. Radial boundaries lead to irrelevant audiences

Radial boundaries extend out a fixed distance from a central point. When these types of boundaries are used to capture visitation data, the information passed will demonstrate an inaccurate audience makeup for a given location. In a case for Macy’s department store, it was found that using radial boundaries resulted in a calculated male-to-female ratio of 1:1 for their locations. In comparison, mapping to the actual walls of business locations results in a male-to-female ratio of 1:3, which aligns with the store’s audience makeup as defined by their own proprietary data. This is because when radial boundaries are used, they draw lines outside an actual store location’s boundaries, and therefore define nearby pedestrians as visitors, skewing the data being used in targeting and measurement.

2. Poor point-of-interest data quality can inflate eCPMs by 300%

Without access to the best and most recent data sources and proper usage rights, your point-of-interest data will become irrelevant. Businesses open and close regularly, so making sure that information is accurately represented in your data set is crucial. In fact, approximately 25-60% of media investment can be wasted on meaningless location data. Be sure that the information passed is accurate, as this can result in a drastic inflation in the cost of engagement — a more than 300% rise to be exact.

3. Separating data and media will create false truths

Separating data and media creates a lot of challenges that result in diminished accuracy. The reason for this mainly stems from increased variability in the combination of provider methodologies. Outdated data, testing methodology, serving delays, and device ID churn all contribute to diminished data accuracy.

4. The combination of low quality point-of-interest data, poor location verification, and decoupled media delivery can result in an estimated 300% impact on your ROI

The combination of the above issues cause a major discrepancy in location information versus what is actually occurring amongst your consumers. As an advertiser, these inaccuracies will misinform you of where your customers really are, who they are and their intent. This can negatively influence your decision-making, thus impacting your investments and the ultimate outcome for the business.

Location represents a new and growing opportunity for all brands to bring greater value to customers, and in return, greater value back to our brands and business. I encourage buyers to stop the guesswork and get real with location.

Why Ad Blockers
Are Good For The Ad Industry

For centuries, advertisers have deployed the same basic ad strategy of delivering mass appeal messages to as broad an audience as possible, as often as possible. And while the channels and technology available to reach and engage targeted audiences have grown exponentially over the years, advertisers have largely remained on the sidelines of innovation.

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Brands and content creators must shift their strategy to embrace value-driven engagement that understands and addresses individual consumer needs.

For centuries, advertisers have deployed the same basic ad strategy of delivering mass appeal messages to as broad an audience as possible, as often as possible. And while the channels and technology available to reach and engage targeted audiences have grown exponentially over the years, advertisers have largely remained on the sidelines of innovation.

As consumer frustrations mount over the current state of digital advertising, leading millions to download ad-blocking technology, the time for change is now. This is one of the most consequential issues that the advertising and publishing industries have ever faced — and it’s long overdue. There is no doubt an opportunity for the industry to come together.

With so much at stake, it is easy to see why some are tempted to develop technological workarounds that ignore the underlying issues that gave rise to ad blockers in the first place.

Rather than trying to fit the advertising experience that has ruled for centuries into a device that fits into your pocket, brands and content creators must shift their strategy to embrace value-driven engagement that understands and addresses individual consumer needs while respecting their content experience is now fundamentally changing – in real time.

An overwhelming majority — 73 percent of consumers — say they are more likely to engage with online advertisements when the ads are personally relevant, according to an August 2015 survey from Rubicon Project. They want brand information at their fingertips that makes their lives easier and addresses their immediate needs. They also want it done in a way that respects their user experience in a manner that is additive to the over all content experience.

In short, users are asking for an improved ad experience that is less intrusive and more relevant to their daily lives.

This is the opportunity facing the advertising sector and the global publishing and application developer communities: to bring advertising into the 21st century by empowering users with greater control of their brand engagement while engineering a seamless and inviting user experience.

That’s why an ad blocker that robs the lifeblood of a truly free Internet, while at the same time charges the largest publishers a tax to allow ads to be delivered without user consent or control, is not the solution.

Simply put, the current connected consumer’s frustration with digital advertising is not a problem that is fixed with an ad blocker. This is an opportunity to be embraced; users expect some form of value exchange for the incredible content they have at their fingertips. The next move belongs to the advertisers, content creators and advertising technology leaders who must come together to deliver a better ad experience for consumers. The alternative? Keep doing what we’ve been doing for years and watch the online advertising industry cede its prominent role fueling the growth of the incredible universe of content and free expression it currently supports.

Want to unlock one of the most exciting opportunities in mobile advertising? Automate it.

Automation has a way of making every advertising opportunity work better. Native advertising is one of the most exciting opportunities in mobile right now. Native formats let advertisers create engaging, attractive, and unobtrusive digital experiences for potential customers, and for this reason is both an important format for brands and a worthwhile unit for publishers to offer at scale.

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Automating mobile native advertising makes it easy to launch, run, evaluate, and begin to build internal expertise about mobile native.

To take advantage of the largest share of that mobile native inventory, you just need to supply your demand source with as may creative components as possible to build their mobile native creatives.

However, mobile native is a new advertising opportunity and that can create anxiety among advertisers because they fear their expertise in the medium isn’t far enough advanced, the formats and creative choices are too limited, and the scale is too small to warrant a test. As much as mobile native has demonstrated its effectiveness, the perception of the degree of custom development required to get started is enough to cause hesitation for both brands and publishers.

This is where automation can save the day. Automating mobile native advertising makes it easy to launch, run, evaluate, and begin to build internal expertise about mobile native. With the release of the OpenRTB native ad specs, advertising technologies are able to apply the power of automation to an opportunity that once required intense coordination and creative customization to take advantage of now.

Let’s talk a little bit more about the specific benefits of automating mobile native advertising for getting up and running with this promising format.

It lets publishers and advertisers test the waters while building internal expertise

While institutional knowledge about how to approach digital display and search is high for most brands, their understanding of what works on mobile native will be far lower, if not nil. Mobile native advertising combines the mobile platform and the native advertising tactic, both of which are still in the “emerging” phase of adoption by most brands.

But behavioral, performance, and even operational insights are actually an output of automated campaigns, especially in the beginning. Through automation, advertisers are able to run many executions of creative and strategies across many publisher environments at once, and with minimal custom creative development. This lets them see which combinations work best for the brand.

Automating mobile native is also an efficient way to see what works well, enabling marketers to decide where to double down on custom native opportunities with specific publishers.

It builds in the mobile native scale and inventory to make a test worthwhile

Brands can be forgiven for thinking the mobile native advertising environment is highly fragmented and tough to scale into. After all, the fact that the creative is customized to each mobile publisher’s environment is the marquee benefit of mobile native.

But in fact, there is plenty of mobile native supply, and it’s easy to access as long as you’re plugged into a single demand source. InMobi Exchange, whose mobile native advertising marketplace Rubicon Project powers, reaches more than 750 million active unique users per month across 30,000 mobile applications. To take advantage of the largest share of that mobile native inventory, you just need to supply your demand source with as may creative components as possible to build their mobile native creatives.

It affords creative standardization

How can you take advantage of mobile native without significant creative resources to build custom units for each mobile publisher?

Many mobile native units are comprised of a finite set of creative elements: square icons, text, and full images - some of which are in IAB standard sizes. Supplying a variety of creative elements in each of these categories will maximize your chances of being eligible to appear in a significant number of mobile native environments.

Automating mobile native will also make it operationally adjacent to other resources that can make the campaigns perform better, namely the data that can further boost performance for these engaging units. Brands and publishers can test and scale the mobile native opportunity by making it a machine-powered one.

Maximizing the Value of Mobile in the Mix

It’s happened: according to comScore, mobile is now the leading digital platform. With consumers spending close to two hours a day on their mobile devices, and 84 percent of them using their smartphones in stores, there’s no denying the value of the mobile medium. But are brands maximizing it?

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With consumers spending close to 2 hours a day on their mobile devices, and 84 percent of them using their smartphones in stores, there‘s no denying the value of the mobile medium.

Mobile generated 25 percent of overall awareness and 6 percent of sales compared to TV, print, and online...at 5 percent of the budget.

The research showed that proximity targeting can more than double the effectiveness of display ad performance, in addition to driving incremental SVL (Store Visitation Lift).

In an effort to better understand how consumers engage and interact with tried-and-true formats on mobile, as well as help marketers optimize their mobile investments, the Mobile Marketing Association (MMA) implemented a pioneering industry-wide research program in conjunction with Millward Brown Digital and Marketing Evolution. The objective of the extensive, multi-year series of studies is to “develop a new approach to scientifically assess the value of mobile in the mix.”

By analyzing real world, in-market campaigns from major brands like AT&T, Coca-Cola, Walmart, and MasterCard, the Smart Mobile Cross Marketing Effectiveness (SMoX) study identified some interesting trends. Mobile was discovered to be a “strong contributor” to campaign performance in both the United States and China, influencing such metrics as purchase intent and sales.

In a cross-channel campaign promoting Coca-Cola’s Gold Peak Tea brand, for example, mobile generated 25 percent of overall awareness and 6 percent of sales compared to TV, print, and online...at five percent of the budget. In the case of Walmart, mobile had the power to directly impact sales. In its 2014 Back-to-School marketing campaign, the retailer used TV, print, and online media in addition to mobile to reach moms and boost grocery shopping intent. Had Walmart optimized its marketing mix for mobile, the MMA found that it could have generated a 14 percent sales lift.

We’ve rounded up the study’s most valuable insights and recommendations, which the MMA reports have the potential to increase mobile marketing return on investment (ROI) by upwards of 180 percent. Let’s take a closer look at how you can maximize your mobile spending this year.

Up Your Mobile Spending

Simply put, marketers just aren’t spending enough on mobile. The MMA isn’t suggesting that you inflate your marketing budget overall, but according to the organization adjusting spending to allocate more to mobile allows marketers to reap big rewards. An optimized mobile budget is a budget where mobile represents 12 to 16 percent of the total ad spend. This level of investment can improve campaign performance across both upper and lower funnel metrics—everything from awareness to sales.

Invest in Video

In general, optimizing for format, channel, and creative can generate between 20 and 40 percent incremental ROI. But where exactly should your mobile dollars go, and how should you apply them?

One area to zero in on is video. Mobile video has the potential to be close to seven times more effective than mobile banners, at just over three times the premium. The study’s findings state that even when marketers use creative originally earmarked for TV, mobile video can perform four times better than television, at 40 percent of the cost.

One caveat for brands as they prioritize video, though, is that they must cap and rotate mobile creative. Doing so can produce far superior results, as the effectiveness of a mobile video ad has the potential to decrease faster than other formats.

Spend More on Native Ads

Native ads have always excelled at engaging consumers, in large part because of their seamless—and thus less intrusive—presence on the site page. Native mobile ads are no exception; these formats were found to be 10 times more effective than traditional mobile banners according to the SMoX report. While the premium for mobile native ads can be five times higher than banners, the improved ROI makes the investment more than worthwhile.

Here, too, rotating creative is key, as richer formats—like video and native—are typically quicker to show diminishing returns. The MMA spoke to this point when it released a mobile native ad effectiveness guide last year. “In contrast to display, native ads build impact at lower frequency because there is greater attentiveness to the content, suggesting that there are different rules and best practices to maximize the performance of mobile native advertising,” the organization said.

Interestingly, the MMA also learned from its study that each mobile format has its unique strengths, and that considering the individual potential of each format produced better results for brands. For example, the study revealed that native ads—along with audio and video—are more effective at influencing brand perception and sales, while banners are better at building awareness. Richer formats can also influence awareness, but banners are more efficient respective to their CPM.

Prioritize Location Targeting

Location targeting has been a point of focus for months now as marketers continue to see results from highly personalized campaigns built around user proximity. By leveraging location-based services (LBS), for example, businesses can omit the need for cookies and target instead based on where consumers are actually spending their time, then applying that knowledge to create more relevant messaging.

Not surprisingly, the SMoX study found that both proximity targeting and retargeting can improve the performance of display ads. What’s more, these tactics are also well equipped to generate foot traffic—an optimum outcome for brands like retailers and restaurant chains. The research showed that proximity targeting can more than double the effectiveness of display ad performance, in addition to driving incremental SVL (Store Visitation Lift).

“We are at a point where many marketers understand that media has fragmented and is more addressable than ever,” the SMoX study says. “For these companies, mobile is the ideal catalyst for change, showing the way to a more agile, hyper-targeted real-time marketing.”

That said, as you plan for the year to come, keep mobile top of mind—and the MMA’s SMoX guidelines close at hand.

Also Inside:

  • 2016: The Year of Mobile Mastery
  • Premium Video: Sometimes Slowing Down is the Boldest Approach
  • Winning at Mobile Will Require a Mental Adjustment
  • The New Political Advertising Platform: Embracing Online, Mobile and Video to Drive Voter Engagement
  • Guardian and the Pangaea Alliance: Quality Programmatic at Global Scale
  • Media and Machine: New Programmatic Channels Move Closer to Automated Media
  • OOH – Where Automation Goes Big
  • The Future of Advertising – Utopian or Dystopian
  • ...AND MORE!

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