What Programmatic Buying Means for the Small Business Market

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Screen Shot 2013-11-20 at 5.34.36 PMSearch has dominated digital spend for years, overshadowing a display market that has struggled to overcome surging inventory and lackluster targeting capabilities. But that’s starting to change. eMarketer projects that display advertising online (which includes everything from banner ads and video pre-roll to sponsored posts) will account for a larger portion of the digital ad spending than search by 2015.

The shift is due in large part to the growth of programmatic buying, and in particular real-time bidding, which brings much of the automation already built into search advertising to the display landscape. Programmatic buying, which allow advertisers to plan, buy, and target ads in real-time using algorithms, is set to account for nearly 80% of the total U.S. display advertising revenue by 2016. Search marketing firms like the Aquisio are looking to expand into the programmatic market, replicating the type of performance marketing products that have succeeded in search.

In 2011, the Canadian company, which white-labels marketing technology to agencies and other resellers, took a large strategic investment from Yellow Pages Canada. Since then, the company has been pushing into the local space, reselling its product to a number of other yellow pages and legacy media firms.

Street Fight caught up with the company’s co-founder Mark Poirier to discuss the ways in which programmatic buying, and emergence of Facebook Exchange, may make the display market more appealing for small businesses in the coming years.

How is programmatic buying going to impact the small business market?
The traditional way of buying display advertising online is that you need to commit a large amount of money upfront — maybe, $10,000-$15,000 minimum — for a campaign where you have no choice or control where your ads will show up. You also need to provide all IAB ad formats and the network, or whomever you work with, will decide where they run those ads. There’s a fundamental lack of control. And when you’re a small business, you don’t have the a large sum of money for tests, which typically don’t work in the first place. Outside of retargeting, it’s typically very difficult to generate the type of tangible results that SMBs look for.

Display can be fairly successful with branding, But if you’re a local business, it’s impossible to flood the market with enough inventory to make that work. They need to typically stick to things that are bit more real like a click on a banner. And they want to see these clicks are yielding phone calls or sales at a reasonable rate.

The thing that’s cool about display is that there’s infinite supply. The tricky part is to find the right page and right person. With programmatic buying and real-time bidding, you can buy one impression at a time, in the places where you want it, to the users who you want to see it.

It seems like search and display are starting to converge in terms of their capabilities. From a media buying perspective, how does this make banner advertising more attractive for local businesses?
There’s just more parity between search and display advertising than ever before, and that makes a big difference for smaller local businesses. One of the part of the model for paid search that make it so great for SMB is that it’s a discoverable media. You can get a little taste, and judge for yourself if its worthwhile it or not. You can measure it very effectively and control it very effectively. You can stop things in a matter of seconds. You’re in complete control.

For traditional display, the advertiser was traditionally locked in with a contract. But with RTB and programmatic buying, you’re in complete control of the buying and planning of a campaign. At first, that’s probably going to be a bit overwhelming for small businesses, but it’s also creating a fantastic opportunity for service providers who are looking to see how they’re going to take advantage of this need. It’s all about data, and the companies which can build the most and make it valuable to local businesses are going to shine.

Retargeting was the big breakthrough for brands online. How is it working for SMBs?
We tried it on hundreds of small accounts. But when you’re very small, using retargeting is very tricky because often there’s not enough traffic on their website to retarget against. To get started, we need to have something to work with. Traditionally, their budgets are limited so it just takes forever to see anything — never mind getting clicks. There’s also the issue of building creative as well. We had to generate a number of creatives. It’s time consuming to create display ads that actually work, and if you have no margins, you cannot spend  six hours building a ad.

Where does social fit into the equation?
I think Facebook Exchange is interesting. At the moment, an advertiser can use a tracking pixel to generate cookies. … I think there’s a real opportunity for small businesses when customers start to use the new retargeting product called custom audience for web and apps. The product allows you to upload a list of email or phone numbers, which Facebook can map in its backend to identify who they are, then you can show ads to those users. So it’s a form of retargeting. They’re going to power retargeting, in which you can layer other data like Facebook likes or interest data. So for small businesses, Facebook may open up a retargeting market that was previously out of reach.

Steven Jacobs is Street Fight’s deputy editor.