Bob Arnold is Associate Director of Digital Strategy at Kellogg. His responsibilities include co-creation of digital strategy for Kellogg brands, building digital marketing capability and leading large scale digital projects. Arnold is also a 10 year digital marketing vet from Procter & Gamble, where he led digital strategy for several Global Business Units.
We spoke with Arnold about how he’s utilizing digital programmatic media buying to revolutionize the digital media planning and buying process across Kellogg.
Brandon Gutman: What are the digital programmatic buying results for Kellogg?
Bob Arnold: We’ve seen tremendous results when using programmatic buying. Depending on the brand, the digital media ROIs have increased as much as six times, according to our 3rd party market mix models. Compared to two years ago, we’re aggressively leveraging it today.
Great results, yet I’ve read reports that less than 10% of brand marketers have even heard of programmatic buying, let alone know what it is. What is digital programmatic buying?
There are many ways to define it…from an advertiser point of view it’s the automated bidding of digital media. Using a stock exchange as a metaphor, the simplest way to explain this ecosystem is, websites have unsold inventory they pass to an ad exchange, similar to a stock exchange, and advertisers utilize demand side platforms, similar to a stock broker, to purchase the inventory. The DSP makes the decision to buy for an advertiser based on a number of parameters- price, data, context, placement- all faster than you can blink your eyes. The most interesting aspect of this ecosystem is a DSP’s ability to ingest a client’s digital media plan- brand, budget, success metrics, etc.- while layering on other data sources and decisioning algorithms to find the impressions that deliver the right consumer when they are most receptive to the message. This is a high level description, with a lot of details glossed over, but that is the gist of how it works. One bold, yet somewhat common prediction is that programmatic buying will eventually be used to purchase traditional media- like TV and Print.
Does it scale?
Absolutely. All the big media tech players are heavily invested into the space- Google, Facebook, Microsoft, Yahoo, etc. In fact, I’ve read estimates of over several trillion digital programmatic impressions are served monthly, and it’s still growing at an incredible clip.
Why do you think your ROIs from digital programmatic buying have skyrocketed so much?
Bottom line, programmatic buying is more efficient, more effective and more transparent than the traditional digital media buying model. It’s more efficient because it’s automated and eliminates expensive overhead. Additionally, the bid process allows advertisers buy at true market rates for each individual impression, rather than a large group of impressions, which may vary in degree of value. From an effectiveness standpoint, the use of data allows our brands to find the right consumer when they are most receptive to our marketing message. Finally, the systemic nature of digital programmatic buying enables the transparency of costs and data allows the advertiser to examine the end-to-end model to wring out non-value added processes and costs.
For brand marketers who are unfamiliar with the space, what’s the best way to get up to speed?
Obviously I’d encourage brand marketers to talk to their digital media buying agency partners. That said, I’d also encourage brand folks to do their homework in the space- online research, talk to vendors, etc. The more brand folks look to understand digital programmatic buying the faster the industry will move to adopt it, and, therefore, drive innovation. I’m a huge believer in that a rising tide can lift all boats.
Sources I’d recommend for brand marketers to understand the space include Adexchanger.com, Exchangewire.com (more European perspective) and Quora. Additionally, there are a number of videos online of Terence Kawaja at various conferences talking about the space- he seems to always be a step ahead of everyone.
Follow Brandon on Twitter: @brandongutman