3 Programmatic Pitfalls to Avoid to Get the Most out of Your Advertising Budget
It is an exciting time for mobile programmatic. This year, US advertisers are projected to spend almost $60 billion on programmatic display, and two-thirds of that will be scooped up by mobile. But unfortunately, marketers didn’t all become programmatic experts overnight, and the result has meant that some of that 60 billion budget has been getting spent less than optimally.
Over the last few years, I’ve worked with many clients in the process of making the programmatic transition, and I realized there are a few pervasive misconceptions out there causing good people to overspend for subpar programmatic results. The problem is many marketers haven’t taken the time to understand the new programmatic landscape, incorporating its different rules into their strategies, and continue to apply old logic that worked for them in the past.
The benefits of well-managed mobile programmatic campaigns are well worth putting in the effort to overcome the challenges of starting, but it doesn’t have to be as hard as some people make it. Which is why I wanted to share 3 common mobile programmatic misconceptions and how to avoid them in order to put your budget to work and get the most out of your programmatic ad spend.
Pitfall #1: Clinging to inflexible pricing
You are in danger of falling into the first pitfall when it’s time to choose the payment model of your new campaigns. I was working with a client recently that was adamant that they wanted to run a fixed Cost Per Install (CPI) campaign, to ensure they didn’t overpay and minimize their risk. I explained that when you work with a transparent programmatic company, you pay less per conversion if the campaign is run with a dCPM as the campaigns mature, but they stood firm. We eventually agreed to run the campaign charging the client based on their desired fixed CPI, because I was confident that the CPI they were willing to pay us was going to be higher than what we were going to buy the ad inventory for using a dCPM.
After the first month of our “gamble”, I had the pleasure of showing the client that we were indeed getting a better rate with the dCPM than their original desired fixed CPI. I showed them that they were overpaying us with the fixed CPI model and we switched to the dCPM so that it favored the client. We were willing to be transparent even though it didn’t work in our favor because our business model aims to establish long relationships built on mutual growth, but if you aren’t careful many programmatic companies will be happy to be paid on a fixed CPI while buying on a dCPM and profit from big margins at their clients’ expense.
A dCPM with a transparent programmatic platform is the best way to protect yourself from overspending, cut out vendor margins, and get the best price.
Pitfall #2: Trash data in, equals trash data out
Programmatic campaign success is largely determined by the quality of the data fed into the system, so basically if you put inaccurate or irrelevant trash data in, you get trash results out. I was recently working with another client who came to us with a clear idea of the KPI they wanted. They were looking to increase installs, optimizing towards new users that purchased a monthly subscription. After some time running the campaign we were having difficulty scaling high converting audiences, the algorithm couldn’t figure out the target users and the results weren’t making sense.
It was only later, once we were able to access the full view of the client’s in-app purchase data via postbacks, that we found out that they had inaccurately established the conversion metric as only subscriptions, whereas in fact, ads were being served to users who were making many other types of in-app purchases. Because the campaign was lacking the feedback it needed, the machine learning algorithms were unable to see all the important data it needed to optimize towards the highest value users.
Moral of the story is, make sure to choose the right in-app actions to track the real value of your conversions, because programmatic technologies are only as good as the data put into them.
Pitfall #3: Looking at the big picture through a pinhole
The final pitfall is one that looms just after the launch of a programmatic campaign. Many marketers and advertisers who are used to micromanaging and manually optimizing their targeting and spending, end up having a hard time sitting back and letting their programmatic campaign enough time to optimize, and get spooked by any aberrations from their established comfort zones.
The hard truth of the matter is, the marketers who are able to be flexible with day-to-day spending fluctuations are the ones that win in the long run. It is the nature of programmatic buying and dCPM campaigns to fluctuate while the machine learning algorithms explore new inventory, scale and optimize towards the highest value audiences. Nontransparent vendors use arbitrage to overcharge and take fat margins in order to eradicate the appearance of fluctuations, but healthy programmatic spending and performance vary on a day-to-day basis. One week you may spend more, the next you spend less, but over time, advertisers who are able to be flexible get the most cost effective spend, because they do not pay middlemen to “stabilize” their campaign performance.
If you made it through reading all three of the common pitfalls I hope you found something useful and that you’ll feel more confident going into your next conversation about mobile programmatic strategies. Programmatic shouldn’t be scary, but it is different, and the strategy you build needs to be built from the ground up with the understanding that what has worked in the past, might not work the same way in the evolving world of programmatic.
