How to Leverage Programmatic Advertising Trends This 2023 Holiday Season
Contributors
Erin Morningstar, Director of Strategy
Teka Phan, Associate Director
Adam Telian, VP of Performance Marketing
August 2023
Holiday 2023 Outlook for Consumers and Marketers
Inflation has been on the decline for over a year, and in June it fell to 3% - the lowest rate recorded since March 2021. Coupled with this is a steady rise in consumer confidence, which in June hit a high not seen since early 2022. And even though these trends are a step in the right direction, economic uncertainty is still expected to play a large role in the purchasing decisions being made this holiday season. Price-conscious consumers will look to cut costs by shopping the sale section, using coupons, downsizing holiday celebrations, and simply buying fewer items. With so many brands competing for share of wallet, it won’t be enough to differentiate on price alone. Instead, brands should make a concerted effort to secure share of mind right now so that they are top of mind during the holidays and beyond.
At a high level, the best way to accomplish this is twofold. First, it’s critical to embrace an audience-first, channel-agnostic mindset so that you are reaching the right audience at the right time. Once you’ve found your audience, it’s important to meet them with strong messaging that is centered on brand value. In this article, we make the case for programmatic channels as effective marketing avenues for expanding brand reach and, ultimately, nurturing long-term brand favorability (i.e., when the holidays roll around).
Changing the Narrative on Programmatic Advertising
Let’s start with some housekeeping - when we talk about programmatic, we’re referring to a method for buying ads on specific channels, including Display, Video, Audio, and Digital Out of Home. Within each channel, there are myriad ways to target audiences based on interests, behaviors, device, location, and demographics.
“When you bring up programmatic to a performance marketer, you might see their eyes glaze over - they’re imagining annoying banner ads placed on low-quality inventory that don’t drive results,” says Erin Morningstar, Director of Strategy at New Engen. This attitude is pervasive and, according to Erin, informs the two primary reasons that brands are wary of investing in programmatic advertising: concerns about brand safety and equity, and limitations of measurement. These reservations are understandable, especially if you believe that programmatic is strictly used for generating brand awareness. But Erin explains that "programmatic is more than banner ads or dynamic product retargeting - it’s the turnkey option for accessing the wealth of ad inventory outside of walled gardens and paid search."
Teka Phan, Associate Director at New Engen, adds:
It’s important to understand that programmatic buying is performance buying. It powers actionable insights into how this media drives actions and conversions across the entire marketing funnel.
The reality of digital marketing in 2023 is that brands can’t successfully grow on the Meta-Google duopoly alone (the aforementioned walled gardens). Instead, it’s essential to meet your customers, both existing and prospective, where they are. This begs the question - where are they?
Media Consumption is Changing (Rapidly)
The channel landscape is more diverse than ever, and consumers are increasingly discovering brands through podcasts, in-app ads, and music streaming services. eMarketer predicts that, by 2024, 20% of all time spent consuming digital media will come from audio. What’s more, CTV already constitutes more than 25% of the time consumers spend with digital media, yet accounts for less than 10% of digital ad spending in the US. To put this in context, Meta receives roughly 20% of ad investment despite representing just 7.6% of all digital media consumption.
This is precisely why we, as an agency, believe that brands can win on channels like digital audio, CTV, and yes, even display. It’s true that direct-buying channels are often part of a mature media mix for many brands. But the benefit of embracing a programmatic-first approach is that it allows marketers to keep an eye on performance at scale while maintaining a direct buy approach for branding-first initiatives.
The Benefits of Investing in Programmatic
Thought leaders at New Engen have identified four primary benefits to investing in programmatic:
- Control: Despite some preconceived notions, programmatic ad buying affords marketers tighter control over targeting, placements, and optimization. This level of control enables measurement testing in the form of geo holdouts, known audience split tests, and platform lift tools. Such exercises are critical to proving the value of channels outside of last-click.
- Flexibility: Budgets can be seamlessly moved around across channels and publishers on a daily or even hourly basis. In contrast, brands buying directly from multiple publishers are beholden to more rigidity driven by campaign minimums and contract terms.
- Value at Scale: Not only are CPMs generally cheaper when buying programmatically, but DSPs often provide access to a variety of inventory types, formats, and audiences - in turn, this variation powers the development of diverse, mature programs. The inventory is virtually endless and continuing to grow as more platforms and publishers open their inventory to exchanges.
- Actionable Insights: By investing in programmatic activations, brands can quickly gather learnings about what kind of inventory and formats are driving performance. While this may not be a unique function of programmatic channels, it’s differentiated by actionability - “Many people see programmatic as an upper funnel, impression-buy only. The value is that we can measure action (conversions, traffic, etc.) and then act on it in real-time,” Teka explains.
How New Engen Clients Have Found Success With Programmatic
Programmatic buying has driven strong results for New Engen clients, with brands finding synergy between their programmatic programs and other marketing channels, including Paid Search and Social. Below are two New Engen case studies that exemplify the benefits of incorporating programmatic into your marketing mix.
Unlocking Incremental Site Traffic Through CTV
In Q4 of 2022, our client, an outdoor apparel brand, tasked us with driving incremental site traffic through new channels. We first identified CTV as their target audience's top digital destination, then we built three rich consumer segments: in-market for outdoor apparel gear, recent competitor site and store visitors, and recent outdoor equipment purchasers. Ads were served across a variety of CTV platforms like Roku, Hulu, Pluto TV, and the Discovery Channel, and optimized based on insights from real-time incrementality studies.
Under this approach, our exposed audience was 2.5X more likely to visit the brand’s site than our non-exposed audience. What’s more, we achieved a 1.9X lift in checkouts. In other words, the brand was able to reach and capitalize on a more qualified audience through its CTV initiative. To top it all off, we identified a previously under-served audience as a standout performer - a learning that is pivotal to refining the program downstream.
Proving the Revenue Impact of West Marine’s Digital Video Awareness Media
In order to validate the direct revenue impact of digital video awareness media, we designed an audience holdout test for our client, West Marine. We activated precision media buys across CTV and YouTube in Florida, a key growth market for the brand. The audience segments included prospecting, retargeting, and lapsed customers, and were compared against national performance.
By the end of the two-week period, the target audience delivered a 1.7X lift in online lapsed user transactions and a 4.6X lift in in-store transactions. Omnichannel ROAS also improved, and West Marine measured a 1.4X increase in year-over-year omnichannel revenue from new-to-file customers.
Programmatic Advertising Best Practices for Holiday 2023
Whether you're bought into programmatic after reading this or just curious to learn more, we want to leave you with our recommendation for what to do next. Here's what New Engen leaders say are the most important steps to successfully incorporate programmatic into your Holiday 2023 strategy:
First and foremost, set clear objectives
→ Identifying what you want to accomplish and learn from your programmatic initiative is the most important step, as this will inform how to design your program. Before you can drive awareness with a new segment or increase AOV within an existing one, you’ll need to understand your audience - then, you can tailor your channels, targeting, and creative parameters to their specific needs. Once you’re aligned on the plan, stick to it.
Set expectations with your team
→ Know that every channel should have its own goals and benchmarks. Don’t track your programmatic performance against your Paid Search campaigns, because these are inherently different channels and so are their outcomes. Performance will even vary across, Podcast, CTV, and Display given their different mediums.
For example, a consumer who searches for “shoes” is more likely to make an immediate purchase because they are actively searching for the product. Programmatic channels, on the other hand, expose audiences to products before they are ready to purchase. So if that same consumer sees a CTV ad for a pair of shoes before they start their search, there’s a likelihood that they will have been influenced before their final purchase decision.
Launch early
→ We anticipate that the holiday season will stretch across Q4, and consumers will start their holiday planning and shopping early - you want to be there when they’re in the consideration stage. As a rule of thumb, you should be in market at least 4 weeks prior to your peak shopping period.
Anticipate different scenarios
→ As an agency practice, we create decision playbooks with our clients going into critical peak periods that allow our teams to move quickly when optimizing campaigns.
If you’re interested in chatting more about your programmatic strategy for the holidays or beyond, reach out to us at programmaticleadership@newengen.com. For more holiday insights and digital marketing news, subscribe to our newsletter and follow us on LinkedIn.