See How Retail Can Use Programmatic to Personalise Advertising

Digital marketing has fundamentally transformed the retail industry, providing an unprecedented opportunity to engage with consumers on a 1:1,  personalised level.

In fact, it has even become a demand from consumers, with some studies revealing that 69% of online shoppers are interested in viewing personalised retail advertisements in the digital space, while 59% of consumers suggest that personalised ads help create the perception that they're valued by the brand.

Furthermore, technology market research corporation, Gartner, first shook marketers in the retail sector with the idea of personalisation in 2015 when they published the intriguing statistic that companies who have completely invested in all types of personalisation technologies by 2018, will outsell and outperform their competitors by 20%. Inevitably, since then, many big brand retailers have fully accepted the opportunity to be in front of their competitors, and therefore have consistently adapted with the ever-evolving digital world, as well as continuously shifting marketing budgets in order to invest in sophisticated personalisation technologies, including elusive programmatic advertising services. 

Digital media buying services such as programmatic have risen to the top of the shopping list for many retail marketers, with the industry spending significantly more on programmatic advertising inventory in comparison to any other sector. In fact, the US retail market spent $3.71 billion in 2015, which was representative of 24.9% of the entire programmatic spend for all sectors in the United States for the same year, and this figure has only continued to grow considerably in more recent times. Undoubtedly, programmatic technology has significantly altered the retail space, but what exactly is it, why should your retail business invest and how can programmatic solutions be applied to the retail industry for improved engagement, acquisition and conversions? 

What is programmatic advertising?

Undoubtedly, the digital space has resulted in increased competition for retail marketing, with companies looking for ways to win customers and impressions on their advertising efforts against their rivals. As a result, digital services have become focused on precision targeting, and ensuring the right messages are sent to the right audience in order to maximise results and minimise wasted advertising spend. Therefore, it should come at no surprise that programmatic media buying has had a significant influence on advertising, with brands expanding their budgets and increasingly sourcing programmatic advertising agencies.

As a relative infant piece of technology in the marketing world, programmatic advertising is often viewed as complex and ambiguous. However, simply put, programmatic technology allows for real-time, automatic and efficient digital media inventory purchases, by using intricate data sets, machine learning and decision making algorithms in order to deliver the right advertisement, to the right audience at precisely the right time. Therefore, it is unsurprising that budgets have increased towards this data-driven solution as such technology has removed the traditionally mundane and extensive process of human negotiations, and has allowed for the automation to buy, place and optimise digital advertisements through real-time bidding or direct deals instantaneously, creating maximum efficiency and return for brands. 

Why should retailers invest in programmatic advertising?

Already, in the approximately $58.6 billion digital marketing industry, programmatic advertising expenditure accounts for a sum of $14.88 billion. This figure is steadily rising as competitive businesses realise the potential and the benefits such technology provides in terms of achieving marketing goals and business profitability. Ultimately, programmatic advertising provides a more efficient way to reach omni channel consumers of today, by providing consistently personalised messages at an unimaginable scale. 

In fact, programmatic advertising is highly beneficial across the entire marketing funnel, so it's no wonder why some retailers are contributing to the large digital marketing spend in this area. As 51% of consumer's shop online and the path to purchase is longer linear as a result of online digital platforms, programmatic technology uses customer data to deliver advertisements, while in turn providing brands with valuable insights. After all, as consumer behaviour is variable and always fluctuating, programmatic can reveal brand affinity across multiple channels to retailers and help determine who, where, how and when to present potential customers with advertising messages. The algorithm based technology takes advantage of available aggregate data sets such as buying history, search history, interests, demographic and psychographic factors for precise audience targeting and distinguishes between brand curious individuals and consumers who are likely to convert. This, therefore, ensures that advertising dollars are focused in areas where it is of most value. In addition, purchasing advertising inventory programmatically can be purchased through real-time bidding, allowing for cost efficiencies as advertisers pay in accordance to what an impression is worth to them.

Not to mention, retailers who invest in this algorithm-based technology, whether it be in-house or through a programmatic media buying agency, are able to optimise their campaigns instantly and on a deeper level based on the insights provided, further accelerating and improving campaign results. 

Programmatic technology also further extends past its advertising capabilities, providing retailers with additional and exciting opportunities. For example, pricing models and loyalty discounts can be set programmatically in order to increase competition. Such technology has already been seen by companies such as Uber, who use real-time behavioural and geographical data sets to determine supply and demand along with customer value, automatically altering the price in accordance with the changes in consumer behaviour.

How can programmatic advertising be applied to the retail industry?

Evidently, through programmatic technology, the retail industry can target the right consumers, at the right time, on the right device in a personalised way, driving up conversion rates and sales. In fact, programmatic advertising can be implemented throughout the entire retail sales funnel in accordance with different marketing objectives. 

Retargeting, custom audiences, behavioural targeting and location targeting can all be facilitated through programmatic advertising, and are just some effective programmatic marketing and advertising services that retailers should explore.  

Retargeting

In the retail sector, 75.5% of marketers are expecting budgets for retargeting to increase over the coming year. The method is generally used by retail brands to generate further brand awareness or lead generation. By programmatically implementing retargeting, the data-driven algorithm can identify the precise time to display an advertisement and could possibly be all the customer needs to take the plunge, commit to the product and finalise the purchase. In fact, studies reveal doing this leads to increase conversion rates and an ROI of 3-10x when properly optimised. 

Custom Audiences

One of the major benefits of programmatic is the ability to deliver ads to a precise audience in order to minimise the risk of wasted advertising spend. In fact, programmatic allows you to target "custom audiences" based on CRM data which can re-engage inactive customers or create look-a-like audiences to discover new ones. In fact, many retail brands use data gathered from in-store loyalty cards, and use their provided email address to deliver programmatic advertisements in the online space, ensuring the customer is engaged with the brand across multiple touch points. This programmatic technique even provides a return on investment of 1-3x for retail brands, through ensuring the right audience is always targeted. 

Behavioural Targeting

Similarly to custom audiences, behavioural targeting through programmatic technology identifies new prospects that share comparable online behaviours to current audiences. The machine learning system creates models of browser behaviour to discover these new yet valuable audiences and delivers them relevant ads based on the data acquired. Through this method, retailers have experienced an ROI of 1-3x in comparison to developing advertisements for their already trialled audiences. 

Location Targeting

Location targeting uses geographic data to drive in-store purchases. Based on a collection of 1st and 3rd party data sets that are focused on location, demographics and interests, ads are programmatically delivered to a consumer through a digital platform, encouraging them to continue the consumer journey in-store. This method is extremely important and highlights ways in which brands can engage with their audiences both offline and online through the customer data collected. 

As the digital world continuously evolves, retail brands and seeking out ways to connect with consumers in personalised ways across their non-linear consumer journeys. Programmatic advertising has presented a great opportunity for retailers to engage with the right consumers, at the right time, with the right message and as the machine learning technology gathers more data, this capability is only expected to improve. Programmatic provides retail organisations with the opportunity to advance their engagement across multiple channels as well as boost conversion rates. 

RGC is a programmatic media buying agency based in Sydney and is dedicated to providing our clients with the best possible outcomes to reach their consumers. To find out more about how programmatic advertising can benefit your retail brand, please contact Richard on (02) 8883 2988 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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