Advertising beyond walled gardens - Part 1: Programmatic advertising with The Trade Desk

In our guest interview with Monika Kusch, we talk about how programmatic advertising can lead to more flexibility, transparency and objectivity in media buying.

This interview was translated from German. You can find the interview in the original language here.

In our new blog series, "Guide to advertising beyond walled gardens," we explore how advertisers who wish to scale their business can diversify their media buying outside of walled gardens. Through regular interviews with our partners, we'd like to introduce you to advertising opportunities outside of GAFAs.

In our kick-off article, you'll learn what walled gardens are, what advantages and disadvantages the platforms offer, get an initial overview of other media opportunities, and also learn why brands shouldn't limit themselves to walled gardens. After all, walled gardens represent less than 40% of the time spent online in the US according to Openx and 40% in the UK according to WARC, Statista reports 27% of daily internet usage for social media in Germany in 2019. Despite these facts, Facebook, Google and Amazon attracted 67,9% of ad revenues in the US in 2019 according to eMarketer.

In this article, we focus on programmatic advertising and were able to enlist the help of our partner The Trade Desk. Founded by the pioneers of real-time bidding, The Trade Desk provides a self-service technology platform for managing data-driven digital advertising campaigns.

Many thanks to Monika Kusch, Lead Associate Account Director at The Trade Desk, for sharing her extensive knowledge on Programmatic with us today and talking about how brands can be present in the rest of the internet sphere.

Lauriane Tiard-Caillaud from MMT in interview with Monika Kusch from The Trade Desk:

Thank you Monika for sharing your insights on programmatic advertising with us and our readers, and for talking to me today about how brands can be present in a variety of other media channels beyond walled gardens.

If you had to choose one media beyond walled gardens, which would you pick?

To be very clear: there is no such thing as one channel or one medium. You should always be aware that different channels are used individually by the target group. Of course, there are certain behavior patterns that are influenced by the time of day or routines. Typical media usage throughout the day makes this clear: for example, the news is read at breakfast, web radio or podcasts are listened to in the shower or on the way to work, websites are browsed during working hours and connected TV at home in the evening is enjoyed. The mix of media consumption by people is diverse and they spend the majority of the time outside the walled gardens.

The ongoing pandemic changed media usage significantly in the past year and will have a lasting effect this year as well. This also changes the way brands get in touch with their target groups. Formats such as mobile, digital audio and connected TV have grown in importance and brands are following their customers into these channels.

Media usage has evolved in the past 20 years more than ever before thanks to digitalization and the technological innovations from mobile. Globally, there is still strong non-digital media penetration in various countries. But we will come to this with the following participants in our series. It illustrates the importance of consumer-centric knowledge - as you mentioned - to select the relevant routes and moments to address an audience. 

Monika, from your point of view, what are the major benefits of programmatic when compared to walled gardens?

The walled gardens make it very easy for advertisers to book advertising. However, many brands are blinded by this convenience and overlook the disadvantages. Loss of control is a critical problem. In walled gardens environments, advertisers give up the steering wheel and leave (own) data and the evaluation of the campaign to a black box. You put information into a system, but you hardly get any data back yourself. In addition, you have to rely on information, for example on campaign performance, without being able to see the database. Campaigns should therefore not be driven by convenience, especially since the argument is no longer valid today. It is now very easy to book campaigns via the web, mobile, digital audio, CTV and even digital out of home even on the open Internet.

In general, advertising today should be intelligent, data-driven, and carefully targeted in order to reach specific audiences in the places they are in at certain times. The example above should have made this clear. With The Trade Desk alone, advertisers can reach around a billion more people on the open Internet than on other platforms - and across various digital channels.

In addition to the enormous range, in contrast to walled gardens solutions, two aspects are decisive:

1. Objectivity: It cannot be a good thing that certain stakeholders control the entire supply chain. Platforms should either offer or buy media inventory - it is not in the interests of advertisers for them to do both, as this creates a natural conflict of interest. At The Trade Desk, for example, as DSP, we only take care of the buyer side. This means that we are completely focused on the campaign goals of our customers instead of selling a specific inventory on them.
2. Transparency: As an open platform, we stand for transparency, also in performance measurement. In a recent survey by The Trade Desk and Advertiser Perception, 85 percent of marketers said that they now have to justify advertising spending to the CFO more than ever in order to prove its effectiveness. Since walled gardens do not provide enough transparent insights, advertisers are increasingly shifting their media budgets to open advertising ecosystems. Brands should be able to easily activate their first-party data for digital advertising and - at least as importantly - also win back insights. We want brands to get added value from our tools so that their data works even better for them and so their media strategy becomes even more successful.
   

Only when advertisers hold their partners accountable and demand transparency and objectivity can they ensure that their interests are protected. We are therefore already seeing an increasingly strong movement by brands and advertisers to focus their campaigns on the open Internet and then also to book in the walled gardens.

Thanks for addressing the point of convenience, this is exactly what MMT Mercury is aiming at every day: making omni-channel campaigns easy to plan, buy, monitor and report in a transparent fashion. 

What are the major benefits of programmatic vs. other non-walled-gardens environments?

The great advantage of programmatic advertising over other marketing approaches is its high degree of flexibility. Programmatic advertising enables advertisers to react quickly to changes. This is shown by a look at the current pandemic. Here, media consumption has changed massively within a very short period of time: While out of home and print have declined, digital media use - especially in the area of ​​connected TV - has increased rapidly. People are currently more at home and at the same time consume significantly more “on demand”. Classic advertising measures such as TV advertising make it very difficult to react quickly to changed circumstances and to adapt messages due to the rigid structures of the advertising booking. With programmatic advertising, advertisers can quickly adapt both the messaging and the media mix and thus react to changing needs.

But not only the time component should be mentioned here. The possibility of using several channels adequately for a campaign from one platform speaks for programmatic advertising. It is becoming easier and easier for brands to buy inventory on the open Internet because most digital channels can be accessed via a shopping platform such as The Trade Desk. These platforms integrate a variety of digital channels, such as B. the web, mobile apps, digital audio, connected TV and digital out-of-home. By applying data through these channels, advertisers can set up their campaigns and choose which channels to include in a campaign with one click.

The important thing here is not just to rely on instinct but on data. Marketers now have access to extensive knowledge in order to optimize campaigns and also gain new insights into the digital behavior of their target groups. With our open API, advertisers can also develop their own solutions based on our software so that they can get even more value from their first-party data. Your own data in particular should be made usable in order to address the right target groups and, for example, to create lookalike models. This enables brands to increase their reach and generate new customers.

You offering a great opportunity to mention the importance of agility in media campaign management. We still all know media professionals who struggle every month to monitor activity because they run on so many platforms at the same time, the benefit of our partnership is to offer the capacity to run beyond walled gardens campaigns benefiting from The Trade Desk’s features but without duplicating platforms. 

What developments do you currently see in programmatic advertising? Where is the greatest potential for brands that want to use the technology?

Connected TV is clearly a growth area. As people spend more time at home, the appetite for Connected TV content grew enormously. New routines in the everyday life of the "new normal" have led to increased consumer demand to watch what they want when they want. Connected TV has thus become mainstream, and broadcasters are in a hurry to keep up with brand demand. The same is true for advertisers, as they follow their target audiences into the new channels. The past year has shown that marketing plans need to become much more flexible, and advertisers can no longer justify making expensive, uninformed bets - especially when CTV allows them to activate "big" TV advertising in more flexible, high-impact ways. The Trade Desk was an early adopter of the CTV trend and is already working with a number of leading broadcasters and partners on this.

From an advertiser's perspective, 2020 will be remembered as a watershed year for television. Within just a few months, innovations and developments were driven forward here that would probably have taken another five years without the global pandemic. Close collaboration between all parties is now key to ensuring that the new golden age of TV is as brilliant as the last.

Which target groups can be addressed with programmatic advertising via your demand-side platform?

In principle, every target group can be addressed digitally. With our demand-side platform, advertisers can use data to test a smarter strategy before spending a budget and then reach more of the best-fitting consumers. In addition, our customers receive complete transparency about the performance, so that the campaign goals can be optimized in real-time.

Advertisers define their goals and target audience, but at the same time should remain open to data insights. Programmatic advertising provides additional insights into the target group that might not be apparent at first glance. The desired target group may, for example, be overly podcast-affine or particularly open to advertising messages in the DIY and gardening environment. Based on the data, advertisers can then adapt their campaigns quickly and effectively and at the same time use the knowledge gained to optimize other campaigns.

Data insight helps us to define the reach and weight to which we can address each audience digitally. The capacity to address every public digitally has been growing dramatically thanks to audio and connected TV, even if adoption is not yet high, it is growing.

How is the success of programmatic advertising measured?

The right measurement and attribution are the key to real campaign success. As mentioned earlier, an overwhelming number of advertisers are under pressure from CFOs to justify marketing spend and measure it against business goals, according to our study. 50% of advertisers question their typical measurement methods. As a result, most intend to implement data-driven measurement strategies. Under the close supervision of CFOs, more than three-quarters (77 %) of marketers now spend significantly more time proving that their investments are producing credible business results. In this new budget-conscious era, eight in ten marketers say their budgeting process is being scrutinized more closely than ever due to the pandemic.

Discerning marketers recognize the value of premium content and are shifting attention and budgets away from walled garden platforms for user-generated content (UGC) - also out of fear of being associated with controversial or factually incorrect content. According to a survey by The Trade Desk in September 2020, only 10 percent of advertisers said they wanted to rely on UGC in the long run. Most intend to shift spending from UGC to premium content like Connected TV. Despite the new pressures marketers are facing due to accelerated disruptions in 2020, advances in data-driven measurement mean:

• 60 % of marketers are feeling "very confident" about relating their digital ad spend to brand awareness
• 32 % expressing some confidence in this connection.
• In addition, marketers also see results when their work is linked to specific business goals:
• 84 % of those surveyed for our study stated that they can safely link their advertising spend to sales.
• 87 % had similar views about going to stores.

We work with all leading, independent measurement partners so that advertisers can choose the most suitable measurement option for tracking their campaigns, depending on the campaign goal. This also enables optimization during a campaign based on an independent assessment of how ads are performing and how they contribute to overall business goals.

Great! You are right, the right measurement method for the right objective is also one of our favorite topics, seeing within our client base how complicated the KPI selection process can be. Through our solutions, we also wish to help present the right KPIs in the right context, so your campaigns receive the praise they deserve. We have developed a Multi-touch attribution approach that can model the effectiveness of each placement (when we have the right data granularity) for all CMOs who wish to impress their CFOs ;)

Monika, thank you very much for your time, the fascinating conversation, and your assessment of the use and development of programmatic advertising. We are very much looking forward to further collaboration with you and your team at The Trade Desk.

We hope you enjoyed the interview with Monika Kusch from The Trade Desk and that you were able to take away useful information for you and your company. To discuss your individual challenges and how you can scale outside the walled gardens with our leading media management platform MMT Mercury, I am available for a personal meeting.