TROY, MICHIGAN, August 25, 2016 — By Wesley Young, Local Search Association Insider
On its face, programmatic advertising promises a lot. It makes the ad placement market more efficient, helps sell unused inventory, reaches buyers or sellers that otherwise would not be accessible, provides numerous filters to customize orders and works 24/7 through automation.
But there have also been criticisms. Naysayers claim programmatic lacks visibility or transparency, leads to greater opportunity for fraud, is vulnerable to bots, and generally lacks human intuition to place ads that make the most sense.
Those concerns have not slowed adoption of programmatic advertising. Accordant Media has been tracking performance of programmatic advertising and released its latest findings in its Q2 2016 Programmatic Media Market Pulse report. Overall, the volume of ads bought and sold through the programmatic marketplace rose over 150% in the last year.
That’s not to say that the criticism is without merit. But it appears the marketplace is improving in areas of ad viewability and bot traffic. Accordant found that viewability rates increased 31% since last year and non-human traffic rates decreased by almost 60% over the same period.
Most importantly, Accordant found that advertising placed through the programmatic marketplace resulted in a huge lift to conversion and offline sales. When compared to a control group that had not been exposed to ads, the digital programmatic campaign resulted in an incremental increase of 35% more offline sales. This represented a 55% lift or increase in conversion rate.
Lift in conversion occurred at all stages of the purchase funnel, but was most effective down funnel. Measured in three phases, awareness, consideration and lastly transaction, Accordant found that the campaign drove conversions at the highest rate in the transaction phase. Here are the numbers:
- Awareness phase: 20% incremental increase and 25% lift.
- Consideration phase: 44% incremental increase and 78% lift.
- Transaction phase: 44% incremental increase and 79% lift.
- The conversion rate for the transaction phase was also 2.8 times higher than the consideration phase.
So why is programmatic advertising experiencing such high returns? I believe it is the ability to finely tune the targeting of ads and accurately serve them to those who advertisers know are their best prospects.
For local businesses this may require a deeper dive in understanding and categorizing customers into those fixed filters used in programmatic advertising platforms. Some examples of broad targeting categories within which there will be a number of specific data filters include site visitation data such as keywords, interest or lifestyle data, behavior, geography and demographics.
If targeted right, the Accordant report demonstrates that digital ads greatly impact offline sales and should be used not just to drive awareness for a brick-and-mortar store, but to drive traffic and ultimately sales to offline locations.