Category: b2b

A marketer’s guide to programmatic advertising

Posted on by shopkick

A marketer’s guide to programmatic advertising

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There is no single answer to how programmatic advertising works. This type of advertising is a broad category that all marketers must learn, but its technical details and platform options vary widely. Programmatic advertising works by allowing marketers to automate their ad buys, but automation does not mean turnkey as marketers must observe it to ensure the best return on investment.

By 2020, marketers will spend $69 billion in programmatic ad buys, which will account for almost 90% of total online digital display advertising in the US. As so much money is invested in this type of advertising, it’s imperative that marketers making ad buying decisions understand the options, as well as the technical details of how programmatic advertising works. Through this, they can make informed decisions that drive sales.

The Technical Details of How Programmatic Advertising Works

Programmatic advertising is a form of data-driven marketing which allows users to leverage platforms to automatically buy ad space based on pre-set criteria. Primarily, it involves three separate components:  

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Demand Side Platforms:

DSPs are where marketers buy ad inventory. They facilitate the process by allowing marketers to purchase ads in a variety of spaces. An example of this includes the Google Ad Manager, which enables brands to display advertisements when specific, targeted keywords are searched, as well as show their ads on certain websites, among other options.

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Supply Side Platforms:

The SSP is the publisher side of the platform, where sites can offer unsold ad space to the general public or a select group of brands. The publisher can connect with multiple DSPs to sell their free space and monetize websites.

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Data Management Platforms:

DMPs allow brands to target their advertising by using data to better understand their audience. Such platforms collect details from website cookies to understand user buying behavior, and create groups marketers can target to ensure their best chance of sales conversion.

These three components make it possible to sell and buy ad space across the entire internet on an automated basis. This is a far more effective practice as going through sites, vetting them, and then buying ad space manually would take far too long. It would also be challenging to target the appropriate groups of individuals.

Targeting Options in Programmatic Advertising

Often, programmatic advertising is mistaken for “real-time bidding,” a common type of programmatic advertising where brands can target users based on the keywords they search. However, this is not the only option for targeting users. Brands can get much more detailed, as DMPs give them access to a wide range of information, including:

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Individual online behavior:

The pages individuals check and sites they frequent can provide indications on their future purchase behaviors. The followers of a famous makeup artist on YouTube, for example, would also be strong targets for a makeup brand selling their wares on Facebook.

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Purchasing affinity:

Purchase affinity goes a bit deeper than simple browsing preference as it creates context. An individual who leaves a positive review of a brand’s product on a popular site will be more likely to make future purchases, as they have an existing positive brand affinity.

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Purchasing history:

Many individuals are surprised to learn that their actual purchases are trackable when using credit cards or other digital funding methods. While details like credit card information aren’t available, information like what consumers purchased and when is often visible to brands that wish to pay for the privilege of seeing it.

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Net worth/income:

Information individuals post on an online resume site or through their credit report can often be used to estimate their annual household income, net worth, and other financial factors.

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Inferred lifestyle choices:

This is a general category that isn’t always accurate but can become so with more data. For example, an individual with a high net worth, who purchases high-end makeup regularly, could also be assumed to have an interest in luxury fashion, making them an ideal candidate for targeted marketing. The more data the brand has available, the more likely their predictions are to be accurate.

A brand can target consumers based on these attributes and significantly improve their marketing ROI. These details allow them to cater their ads specifically to those who might have the most interest in them and ensure they reach the hottest leads. This is just one of the many benefits of programmatic marketing.

The Benefits of Programmatic Advertising

Brands can enjoy increased efficiency, better tracking, and a stronger ROI through programmatic ad buys. Here are just a few of the ways programmatic advertising offers brands improved marketing.

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Increased reach:

The most apparent benefit of programmatic marketing is the ability to reach millions of buyers at once through the click of a few buttons. Google alone gets an estimated 40,000 searches per second, meaning that brands will always have a broad audience to reach when advertising on or through the search engine.

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Ease of use:

Programmatic advertising is relatively easy to learn, and providers focus on the user experience to ensure ease of use. It’s far more straightforward than the old process of requests for proposals, negotiations, and manual insertion orders that took time, effort, and a lot more know-how.

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Simplified ROI tracking:

Understanding the ROI on a programmatic ad buy is relatively simple, as the tracking from ad display to conversion is typically automatic. This process simplifies budgeting and helps companies determine precisely how much they should spend on this venue for the best results.

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Enhanced data and insights:

Brands can learn a lot about their target market by looking at the results and conversion of their programs. They can discover niche communities with loyal followers and further enhance their marketing to improve their ROI.

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Personalization:

The final benefit for programmatic advertising comes on the consumer’s end. When a consumer sees an ad which is more relevant to them, it creates a personalized connection which can spur positive brand affinity.

Programmatic marketing is a must for brands as it allows for efficiency, personalization, and a broad reach to consumers. However, there are some limitations which brands must prepare for to ensure the best possible customer experience.

The Challenges of Programmatic Advertising

Programmatic advertising isn’t a magic bullet for marketers, especially for those new to online optimization. While the platforms themselves are easy to use, a lot is going on behind the scenes which creates limited effectiveness. Here are just a few of the challenges marketers face with programmatic marketing.

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Location limitations:

While marketers can certainly use location as a basis in their search, there are some limitations to this—especially when consumers are in the shopping aisle. When advertising at a brand level, the ability to reach consumers as they make a purchase is crucial. However, tracking real-time GPS data is not a possibility in these types of ad buys as it would be considered an invasion of the consumer’s privacy.  Brands can only connect with consumers who permit GPS tracking through a retail, shopping, or branded app.

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Ad fraud risk:

Not all providers of advertising space are equal. Brands must contend with malicious traffic created by bots, which could inflate effectiveness and limit the overall ROI. Carefully vetting ad providers can ensure brands reach an audience that will provide genuine sales.

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Cost:

Programmatic advertising can be expensive, especially when dealing with competitive keywords or high-value platforms. It’s impossible to target every platform, so it can be challenging to pinpoint the most profitable avenues without investing in less effective ones.

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Market saturation:

The programmatic market is valuable, which is why so many brands are already on board. The more individuals participate, the more expensive it will get. Consumers may go “ad blind” by seeing too many sidebars and headline ads, choose to skip them, or install ad blocking software to eliminate them, making programmatic less effective.

The challenges of programmatic advertising don’t mean brands should do without it. It remains a valid route for sales. However, to fill the gaps that programmatic leaves behind, it would be wise to consider some alternatives.

Alternatives to Programmatic Advertising

Brands can seek out new methods to reach consumers on an automatic basis without the need for programmatic advertising. This is an opportunity found through third-party apps. Third-party apps work based on user permission, so it’s possible to reach consumers based on their location and as they travel. They also provide a less competitive space, as brands can pick and choose the companies they work with for the best results.

Shopkick is a prime example of this. When brands work with us, they’re able to connect with our extensive audience of consumers who join to receive kicks (aka rewards points) for making their everyday purchases and interacting with brands in the shopping aisle. We increase sales by offering consumers rewards points all along the path to purchase, whether that be for watching branded content at home or interacting with products in-store. We heighten these rewards by offering added kicks when consumers purchase featured products and scan their receipt, which drives ongoing brand affinity without using discounts.
We’ve worked with many brands, from smaller challenger brands to larger global companies, to drive awareness in the shopping aisle. Contact us for more information on our programs.

Third-party apps can help bridge the gaps in programmatic advertising by allowing brands to reach traveling consumers, especially as they’re about to make a purchase. They can drive consumers to products in the shopping aisle, which enhances any overall digital marketing program and increases sales.

The Future of Programmatic Advertising

Programmatic advertising is expected to reach platforms outside of regular websites and even mobile apps in the years to come. Smart speakers serve as a prime example. While voice ordering is still a relatively new option, programmatic advertising could enter this realm and allow brands to gain audio air space when consumers interact with their smart devices.

Another option gaining a lot of buzz is addressable advertising. Through this, traditional television commercials become an opportunity for programmatic ad sales. The television will display ads based on the users rather than simply by the time slot. This will impact both linear TV, where consumers watch live broadcasts and shows at their regularly scheduled time, as well as non-linear options like Netflix and Hulu. This will essentially act as an option to reinvent television commercials and is the next significant development expected in programmatic advertising.  
There is no one way to understand how programmatic advertising works. Instead, it’s essential to see it as a series of movable pieces that can have varying levels of effectiveness. By understanding both its advantages and challenges, brands can discover ways to fill the gaps and increase their overall marketing ROI with programmatic ad buys.
Shopkick enhances our partners existing programmatic advertising by strategically implementing in-store initiatives with our mobile app. To see how programmatic advertising works with us, review our success stories.

5 Foundations for Inspiring Loyalty From the Modern Consumer

Posted on by shopkick

The way that consumers shop has changed significantly over the past decade, but many brands and retailers have failed to create loyalty programs that evolve with the CPG landscape and its savvy consumers. In fact, more than half of the customers that signed up for loyalty programs aren’t even using them. Continue reading “5 Foundations for Inspiring Loyalty From the Modern Consumer”

Understanding the factors influencing consumer behavior

Posted on by shopkick

Understanding the factors influencing consumer behavior

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Market cultures, social circles, personal preference, and psychology are all factors influencing consumer behavior in the shopping aisle. These factors aren’t static, meaning brands have an opportunity to change the consumer’s mind before they make a purchase decision. By leveraging options like mobile marketing, personalization, user interaction, and virtual greetings, brands can better understand and adjust consumer behavior to grow their market share.

When it comes to CPG purchases, consumers can change their minds very quickly because oftentimes the purchase isn’t seen as something with long-term consequences. The low price point of these products makes consumers more willing to try new things and deviate from their existing purchase patterns. Brands can further drive purchase decisions by offering rewards programs and incentives that encourage consumers to test out new products.

Breaking Down the Factors Influencing Consumer Behavior

Cracking the code to consumer behavior has long been a goal of marketers. By understanding why they purchase, marketers can address those issues and improve advertising. The factors that influence consumer behavior can be broken down into four comprehensive categories.

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Market culture:

The culture within the market will determine the consumer’s overall desire for a particular product. For example, a discount baby supply store would not likely do well in a neighborhood populated with millionaire retirees, but would be an excellent addition to a community where a lot of middle-class families live, perhaps near an elementary or nursery school. The market in that particular area would likely be rife with potential consumers, while the retiree’s neighborhood wouldn’t have as many.

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Social circles:

People are tied together through the individuals they affiliate with, be it family members or just those who share the same hobbies and interests. Within these social circles will be individuals who make purchase decisions, those who influence purchase decisions, and those who follow them. Consider a traditional nuclear family. One parent might request certain products at the store; the other will do the shopping and take their requests into account. Meanwhile, the children in the household will accept the decisions made between the decision maker and influencer, and later on may choose those brands because they were introduced to them by their parents.

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Personal preferences:

Personal preferences are the conscious things people choose for themselves, like the brands they’re loyal to as well as the products they avoid. These preferences often change with age and life circumstances. They can also be impacted by consumers social circles, and the culture in the market where they live. Brands that market to niche groups, like challenger brands, often focus strictly on personal preferences as a matter of marketing as this provides a more authentic feel to advertising.

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Psychological triggers:

Psychological triggers can tie into personal preference, but really, they’re about subconscious decisions rather than active ones. Things consumers see, hear, taste, touch, and smell, can trigger positive or negative reactions which brands can use to drive sales. Consider how many brands use the color blue prominently in their logos. The color triggers a feeling of trust and security which brands can impart to their products by using it in their advertising.

During the purchase journey, a number of these factors can be in play. As such, it’s best that brands create diverse campaigns that transcend categories.

Catering to a Culture With Location-Based Mobile Marketing

Location-based mobile marketing allows brands to connect with a specific community and engage users based on the culture of that community. Levi’s gave us a prime example of this when they partnered with Disney and Snapchat on a location-based augmented reality campaign.

According to Visit Orlando, the city receives an estimated 70 million tourists on an annual basis. The vast majority of those tourists visit the region due to Walt Disney World or one of the many other themed Disney attractions. The culture in the area is decidedly Disney-centric, and as such, consumer buying behavior is very tied to Disney in this market. Levi’s recognized this and chose to capitalize on it by offering a limited time deal at their Orlando store.

Visitors to the store received a Snapchat notification through which they could access a limited time deal. Through an augmented reality feature, they were able to see and even virtually try on a Disney-themed Levi’s hat while at the location. Additionally, shoppers could order the hat through the Snapchat app and have it delivered to their hotel as a souvenir from their vacation.

While the location-based mobile campaign targeted individuals based on the culture of the market, it also worked on a psychological level by leveraging scarcity. Individuals visiting the store could only access the product for purchase while they were on the premises. Once they left, they lost their chance to receive a limited-edition, Disney-themed item. Since these individuals were on vacation and likely in a spending mindset to begin with, this made it far more likely they’d make a purchase rather than risk missing out on a deal.

Exclusivity and an understanding of the market culture helped to make this campaign a success. This is a strategy other brands can leverage by understanding their unique selling points and how they impact the market where they are available. By providing a location-based, limited-time deal, brands can drive consumers to make purchases and enhance the customer experience.

Engaging Social Circles With Interactive Campaigns

Many brands choose to work with influencers to reach a wider audience. However, such relationships don’t always pay off, as influencers may not have the capacity to inspire people to make purchases. It’s far more likely that individuals will be interested in the opinions of those they know. In fact, nearly half of consumers say that recommendations from friends and family members have driven their decision to make purchases.

Interactive content acts as a way to drive this word of mouth without leveraging costly influencer campaigns. Brands can leverage content that encourages consumers to participate when creating campaigns to drive awareness of products.

This is something that Kellogg’s leveraged with their Super Bowl LIII ad for their chip brand Pringles. The brand ran an interactive, livestreaming connected TV (CTV) campaign during the Super Bowl. The campaign served two versions of shoppable experiences, allowing viewers to interact with them via the CBS Sports app on Apple TV. One version of the campaign, which changed a city name based on a user’s geography and revealed different Pringles chip combinations upon swiping, generated over 6.4% engagement.  

Another creative element for the campaign included a shoppable experience with a QR code linked to Pringles’ online store on Amazon. Viewers could lift their phones to the screen and “connect” with the code, generating an automatic link to the storefront.

This strategy helped consumers remember the brand and participate, which also drove them to discuss it with friends and family who could be influenced by the second-hand knowledge. Additionally, the campaign reached consumers on a personal level. Such personalization humanizes brands and creates a connection which can drive purchases.

Using Personalization to Connect With Consumers

Personalization is a bit of a buzzword in the marketing space, and there are many definitions of what qualifies as “personalized.”  For some brands, it may mean merely adding the recipient’s name to the beginning of an email. To others, it might include targeted messages that take into account their favorite brands and previous search history.

Walmart is one company creating its own slant on personalization. The retailer chose to update its baby registry service with a unique feature which offers personalized advice via Hoo the Owl, an intelligent chatbot capable of providing recommendations based on the user’s questions. This type of information, explicitly aimed at expectant parents, creates a personal connection with the retailer which makes consumers more likely to choose Walmart for selecting items for their new family member.
This strategy allows the company to connect with expectant parents on a personal level. It also connects to their social circles by encouraging them to send their Walmart registry details to friends and family. It expands on the intimate connection by encouraging word of mouth advertising for the brand by keeping consumers on their site.

Registries are an excellent opportunity to both connect with consumers and gain the attention of their friends and family members. By adding an intelligent chatbot, Walmart made themselves stand out in a competitive space.

Creating a Positive Consumer Experience Through Virtual Greetings

One of the final factors influencing consumer behavior comes from psychological triggers. Colors, smells, and even feelings can put consumers in a positive purchase mindset which drives them to make purchases.

This is a strategy that Shopkick leverages in many of its campaigns, by using branded entrance messages to create both a positive experience for the consumers and top-of-mind awareness for brands. Bomb Pop chose to partner with Shopkick for such a campaign in the lead up to the Fourth of July.

On arrival, consumers visiting partnering stores were greeted with a Bomb Pop branded message which reminded them of their offerings while also putting them in a positive purchase mindset. Consumers were further incentivized to seek out the company’s products through additional rewards which encouraged them to find and scan product UPCs. The process of merely holding the product created a sense of ownership, which urged consumers to make purchases. Overall, Bomb Pop saw strong incremental results, with 68% of purchasers choosing to buy the products due to influence from Shopkick.
Mobile marketing strategies which provide incentives for purchase are in-store sales drivers because they casually remind consumers of products and encourage them to seek them out, even if they weren’t planning on purchasing them before their visit. These strategies also reach shoppers on a personal level, as the rewards are delivered to consumers based on their locations and shopping behaviors.

It’s possible to leverage multiple factors influencing consumer behavior to drive sales through a single campaign. Often, in attempting to target one of these factors, brands cross over into other areas. As such, these strategies are ideal for reaching consumers on multiple fronts, whether brands want to trigger certain psychological behaviors or connect to an entire market. By reviewing some successful marketing campaigns related to these factors, brands can better understand consumer purchase behaviors to improve their sales overall.

Shopkick guides our partners through the in-store factors influencing consumer behaviors through the use of our innovative mobile app. To see how brands have leveraged this for the best results, check out our success stories.