More and more, digital advertising is being bought and sold using algorithms. Programmatic buying already accounts for $10 billion in spending, and is due to jump to $20 billion by next year, according to eMarketer.
And while the industry is still in its infancy, location targeting on programmatic is really heating up, says Andrew Beckman, CEO of Denver-based Location3 Media. Street Fight recently caught up with Beckman to talk about the value of proximity, the problem of “dirty data,” and why leveraging user profiles from Web giants could be the key to attribution.
What are some of the big trends that you’re seeing in programmatic right now?
It’s such a Wild West. You just have so many different platforms out there to buy programmatic ads.
Right now the main area that we’ve been focusing on is using our customers’ data to reserve those ads, whether it’s on desktop or mobile. That has been a huge area of focus of business. Getting profiles of what those consumers are looking for, and then finding companies that we can utilize that have look-alike models or similar behavioral segments that we can use to match up those ads and deliver the right ad to the right consumer.
A big focus of the Local Data Summit next week is looking at what will we be able to do in three-to-five years with data. What are some of the things you anticipate for programmatic?
We feel that the big four – Google, Microsoft, Facebook, and Amazon (and I guess you could throw a fifth would be probably Yahoo) – will basically control the personal information about those consumers who are logged in to their platforms.
So as more consumers are using more mobile devices, reaching those consumers and targeting them in those networks is going to be huge. But I think we’re going to have to pay a price for that. I think there’s going to be higher costs associated with really reaching [a specific person] and knowing that they’re on Google and serving up their interests. We’re in a cookie-less world, mostly, in mobile, but those networks have the keys to consumer profiles.
Are people getting better at matching specific users to specific behaviors?
You know, I think on the proximity side — reaching those users from a geographical location — has gotten leaps and bounds better.
Matching up those users of what their interests are, less so. On the desktop, cookies are really unreliable. I think it’s still really challenging in that area to do the matching. That’s why I was alluding to those networks. Really, when you’re logged in it’s such a different animal, because [the networks] know who those users are. So, I think that’s where the opportunity lies and I think that’s where the issues are with “Am I reaching the right person? Are they seeing my ad? Am I getting charged and they’re not still seeing it?”
Do you think location is just one tool in a marketer’s arsenal, or is it really worthy of its own category?
Proximity is huge for retailers who have a storefront, where you’re within their area and there could be some information on their device (whether the apps you use or other information) that they can pull out that they can serve you up an offer that is relevant to you. As consumers are roaming around, proximity is going to be a huge component based on those geo-segments as well.
Are brands getting a better understanding of the way this stuff works?
I know we’re talking about how fast it’s growing, but I think the adoption rates could be a lot faster.
I think what we have a challenge with is people understanding how to use a DSP and serving up ads and targeting them. I mean even on the traditional side, just understanding how to serve up ads. There’s a huge demand and there’s still a huge learning curve for that aspect. Then you layer in a whole type of different buying — instead of “I’m going to a publisher and I’m going to buy ads on this site,” I’m now going to use a platform to say “Here’s the ad I want to use, there’s the targeting I want to put in place and here’s what I’m willing to bid.” It’s just another layer of complexity.
I think that’s why agencies are going to be more vital for a lot of brands, unless a brand is really that committed that it needs to step it up internally.
How focused are they on ROI and attribution issues?
Attribution is obviously a critical component. It’s just very difficult to really know every step of the way of that consumer’s path to purchase, what content they’re reading, what links they’re clicking on. And then you’re talking about cross platform with a tablet and the mobile devices — it’s really fragmented right now.
That said, when you’re logged in to Gmail and YouTube and you’re bouncing around the Google network, they’ll be able to give you at least some understanding of what that attribution looks like within that network. Once they go to Facebook or Microsoft, it’s going to break. They’ll never be 100 percent but there’s always going to be patterns that we see of touchpoints that are the last thing that a consumer might have seen.
People talk to us a lot about kind of the problem of “dirty” location data. Do you see that as a big problem hampering the industry, or is it overblown?
I guess the data is pretty all over the place because there isn’t one central location for it. So Google might say the longitude for this brand is X and Facebook could have it at Y. Now, those coordinates could be 20 feet away from each other, and they’ll be like “that’s a bad dataset.”
Sometimes that dataset can be like a thousand feet away for whatever reason, and that geocode is off. It does affect that consumer going there. But I think at the end of the day, it’s where is the central source of that data coming from?
David Hirschman is co-founder of Street Fight. This interview has been edited for length and clarity.