If you’re already using programmatic media to grow your contractor business, you’re no stranger to different types of data. And if you’re running both top- and bottom-of-the-funnel campaigns, you’ve probably noticed that your bottom-of-the-funnel advertising efforts tend to run more expensive than your run-of-the-mill awareness campaigns.
Programmatic buying is a powerful digital marketing tool that offers opportunities to buy ads at significantly lower prices than traditional “human-driven” methods. It’s also one of the most widely used marketing tools, with 2020 global spending reaching $129 billion.
With data costs built into most programmatic pricing models and the cost of data continuing to increase, it’s essential to optimize your programmatic campaigns to make the most of every advertising dollar. Here’s everything you need to know about programmatic spending to stretch your ad budget.
Highly focused ad campaigns and brand awareness campaigns are at two different ends of the sales funnel. To understand exactly where your hard-earned ad spend is going, here’s a general overview of how each type of campaign works with programmatic advertising.
As the name suggests, brand awareness campaigns aim to build awareness of your brand. Instead of focusing on conversions or sales, your main goal is to improve the awareness of your brand among your target audience.
Thanks to the rise of data-driven marketing, marketers can take a deep dive into their target audience with audience profiles. Instead of guessing which audiences are right for your brand, you’ll know exactly who to market to—from their location and demographics to their interests and pain points—for ultra-efficient marketing.
With modern programmatic platforms, businesses can build powerful programmatic campaigns and efficiently target audiences based on data like demographics, purchase behavior, income, and more. Plus, programmatic campaigns will reach their intended audience no matter what they’re doing on the internet, so you can rest assured you’re building awareness with potential leads. The best part? Bidding happens automatically, in real time, for easy campaign optimization based on ad performance.
For many companies, programmatic advertising is the go-to for raising brand awareness—and for good reason. Unlike paid search, which targets prospects who are actively searching for information, programmatic ads can help you reach customers who have little awareness of your brand, but are still likely to be receptive to your message. This was the case for Pristine Clean and The Gutter Boys, two Northeast Ohio-based service providers who used programmatic marketing to reach their prospective customers during periods of ideal weather—sunny, warm days—when they were most likely to consider pressure washing or gutter cleaning services.
With data-driven target audiences at your disposal, you’ll be able to serve relevant ads to the prospects most likely to convert. And since you’re targeting broader messages with awareness ads, there’s a good chance you’ll spend less on awareness campaigns than middle- and bottom-of-the-funnel ads.
Our clients agree that programmatic works best when it’s part of a full-funnel strategy. In addition to awareness campaigns, you’ll need to nurture your leads with highly targeted middle- and bottom-of-the-funnel campaigns to guide them to the finish line.
So, what’s the catch? When you target prospects further down the funnel, you’ll need to refine your audience and data to create hyper-relevant, personalized messaging. While awareness campaigns target broader audiences, that data can then be collected as a remarketing list to target with a lower-funnel conversion message. But most of the time, you’ll need to invest in richer data on different audience segments to create conversion-worthy ads.
Once potential customers have transitioned from awareness to consideration, it’s time to familiarize them with your business. Through native advertising—something that doesn’t look like an ad when customers are scrolling—you can market to prospects seamlessly, wherever they’re scrolling.
But your job doesn’t end there. When potential customers make it to the bottom of your sales funnel, you need amazing ads that will encourage them to take action. That’s where display ads, complete with scroll-stopping creatives and compelling copywriting, can change the game.
With display ads, you’re specifically targeting an audience segment to influence their decision. In this case, you want potential customers to click on the ad so they can subscribe to your email newsletter, fill out a consultation form, or request a quote. Of course, if you want to make it this far, you’ll need relevant messaging—and that requires detailed data to find out what your leads identify with, what their needs are, and what they want to see.
The concept of percent-of-media pricing has been thrown around the programmatic ecosystem for a few years, but more demand-side platforms (DSPs) and data management platforms (DMPs) are integrating the pricing model into their operations. Simply put, percent-of-media pricing is what the name suggests: a percent of media buy.
What does that mean, exactly? Instead of purchasing data at a fixed price per thousand impressions, percent-of-media pricing combines the costs of data and media for a simpler pricing model. Instead of data costs consuming the majority of your advertising budget, percent-of-media price reduces the cost of data so you can lower ad spend without sacrificing the quality of your ads.
With percent-of-media pricing, buyers who were previously priced out can now invest in audience profiles, opening up new markets for sellers. This way, marketers can run data-driven, performance-oriented campaigns with more affordable inventory. Sounds like a win-win, right?
Percent-of-media pricing is typically less expensive for buyers, especially in smaller markets. Businesses can also use the media pricing model to test and break into new markets—with significantly lower costs than traditional cost-per-thousand pricing models.
Most demand-side platforms that offer percent-of-media pricing also cap the data cost at the cost-per-mille equivalent, so it’s safe to buy even when media buys run higher than expected. For DSPs, the new pricing model offers new opportunities to move data that’s already on the market but might not sell otherwise.
As programmatic media continues to grow, percent-of-media pricing has become more popular among industry-leading demand-side platforms.
Currently, The Trade Desk (TTD)—an advocate of percent-of-media pricing—is transitioning to a hybrid pricing model, giving buyers the best of both worlds while monetizing data for DSPs. On the other hand, for scaled DSPs like AppNexus, MediaMath, and Adobe Advertising Cloud, the DSPs are willing to apply individual pricing deals negotiated between buyers and third-party data partners.
At the end of the day, the new pricing model is a win-win for both parties. It increases data usage and drives impressions, which optimizes campaign performance in an omnichannel strategy. Because data value varies across channels, fixed-data CPM pricing can be difficult to predict. For buyers, hybrid pricing makes it possible to run more data on more impressions while keeping pricing simple and scalable across different channels.
Over the next few years, we’ll see programmatic marketing tech flourish. According to Statistica, programmatic ads were worth $418 billion in 2021—and that figure is expected to reach a whopping $725 billion by 2026. With programmatic spending on the rise, DSPs will continue to help their buyers leverage data through percent-of-media pricing that wouldn’t be used otherwise.
Programmatic advertising is evolving. As programmatic media buying becomes an increasingly popular digital advertising strategy, industry leaders will find new ways to make data work for marketers with greater pricing, more transparency, and cost-effective ad-buying methods.
Whether you’re just getting started with programmatic or want to optimize your existing campaigns, we’re here to help. Reach out to our team to take a different approach to programmatic media.
