Blog / November 15, 2016

It’s about Value, not Price, When It Comes to Programmatic Media Cost

By Melanie Franke

One of the biggest challenges marketers face occurs when they encounter an unexpected media-buying opportunity, and they need to determine what value comes with the cost. With finite budgets planned out sometimes up to a year in advance, it’s easy to pass on good opportunities because the price tag is too high. Too often, marketers let good campaigns slip through their fingers because their current programs show promise and are much less expensive.

THE DIFFERENCE BETWEEN COST AND VALUE

Programmatic media cost can be a major factor in this equation. Banner ads are budget friendly, easy to track and allow marketers to target a specific audience while video ad inventory is much more expensive, thus automatically increasing the cost of the campaign.

Although banner ads save money in the short term, these campaigns are less effective overall. Instead of investing $100,000 to drive $600,000 in additional sales, a marketer can wind up spending $50,000 to generate a measly $20,000 in incremental revenues.

Marketers need to get the spend right, but it needs to be relative to the value the campaign brings, which will save them a major headache in the long run. 

Tip: When approaching digital media, marketers should think less about the programmatic media cost of a new campaign and more about the value that campaign will deliver.

When approaching digital media, marketers should think less about the programmatic media cost of a new campaign and more about the value that campaign will deliver. While price considerations are certainly valid, brands must carefully consider how different services and inventory types contribute to their overall return on investment. More often than not, a well-executed media campaign will pay for itself.

WHEN IT COMES TO QUALITY INVENTORY, VIDEO BEATS DISPLAY

One of the big benefits of programmatic technology is that it allows marketers to reach a given audience with relevant messaging across a wide range of platforms, formats and devices. However, a brand’s ability to make an impact with that audience varies a great deal based on what tactics they’re using to communicate their brand.

For instance, the programmatic media cost of a banner ad is pretty low, so a marketer can easily reach the right person at a low price. What this doesn’t account for is that the ad will have to compete for attention with the content the user is consuming and a number of other display ads on the page. At a time when 86 percent of consumers are ignoring banner ads altogether, brands will be lucky if a consumer focuses on their banner message for even a fraction of a second.

Enter pre-roll.

By contrast, pre-roll or mid-roll video ads takes up the entire screen, giving advertisers 15 or 30 seconds of uninterrupted time with the viewer. Additionally, viewer attention span is amplified when viewing premium video content. According to a recent report from FreeWheel, viewers watching premium video content complete 78 percent of the pre-roll ads they see.

Although programmatic media cost for this placement will be higher than for a standard banner ad, the ad experience is much more impactful and consumers are more likely to pay attention to the brand’s message, particularly when targeted at the right audiences.

MAXIMIZING RESULTS WITH AN END-TO-END CAMPAIGN 

The way marketers have traditionally broken video campaigns down into their various components doesn’t help with the cost/benefit equation. For instance, it’s quite common for brands to hire a creative agency to develop the video ads, then they go to the brand’s media agency where the audience is determined and finally, they make it to the media publisher to actually run the campaign. In this scenario, the media and target audience aren’t informing or talking to the creative at all, which creates a disconnect in the campaign.

This fragmentation makes it much harder to build a campaign in which the creative, audience and media-buying strategies work in cooperation to drive the advertiser’s intended results. While a retailer’s creative team can put together an ad touting its back-to-school specials, the content is only effective if it resonates with its various audience segments, such as parents of elementary school children versus parents of high school kids.

Marketers are more likely to see success if they can find a partner that manages the creative, audience and media all together. That way, all pieces of the campaign can inform each other as they launch, so if a certain creative is working really well with known buyers of the brand, then the brand can increase spend in that sector. In addition to benefitting from the unique expertise of a close partner, this strategy creates holistic, integrated marketing plans where every aspect of the campaign is linked together—from the creation of the initial KPIs, audience selection and content creation to the measurement of results after the campaign runs.

A SHORT-TERM INVESTMENT FOR LONG-TERM SUCCESS

Digital marketing is increasingly becoming an arms race, with more money flooding into the market in each passing quarter. In order to succeed in such a crowded environment, brands have to evaluate programmatic media costs in a necessary effort to reach the right people with the right message—and in a setting where the user is really paying attention to what they have to say.

By making decisions based on value rather than price, marketers can give themselves the latitude to acquire quality inventory and build sophisticated plans for influencing their target customers. Although they might miss the extra budget in the short term, they’ll be glad to have spent it wisely when their bosses measure the performance of marketing campaigns to determine budget for the next fiscal year.  

LEARN MORE ABOUT HOW 1-TO-1 VIDEO PERSONALIZATION WORKS TO CREATE THE BEST RESULTS.

More about the author

Melanie Franke Content Marketing Manager
 

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