Programmatic display: From villain to local hero?

For the last 13 weeks, most of us have been confined to our local area. We haven’t gone to work, we haven’t travelled, and have relied on local businesses and the occasional Amazon delivery to supply us with food and essential items.

Having spent time locally we have come to appreciate it, with 63%[i] of us pledging to support our local businesses more in the future. More than half of us feel a sense of community to our local area[ii], and 25% of us say we will volunteer for our local community. And at least for the foreseeable future, many of us are staying local, with 60% wanting to travel less[iii] and 30% expecting to Staycation in our local area as a holiday this year[iv].

As advertisers, we can see the power of this trend – messaging that offers membership of a club in Blackheath to audiences in SE3 is obviously more effective than a message about joining the same national brand. The jeopardy however is that just as the need for local media is greater than ever before, the supply is shrinking. Local radio audiences are down by up to 20% since lockdown, OOH audiences are down by 40%+, and are climbing by only c.1% per week.

The good news for advertisers is that since lockdown, we are spending c.18%[v] more hours per day online which means more digital display advertising inventory is available (a potentially contentious issue if you follow the commentary in the current marketing press).

Most display is sold programmatically now, and that has a very poor reputation amongst advertisers at this moment in time. A recent PWC report highlighted that only 50% of spend actually ends up with media owners, the other half being lost in an opaque techno ecosystem. That lack of transparency is one of the reasons that we invest very little in programmatic display for clients. That and the fact that in a performance world it is seen as rarely effective.

At The Kite Factory, we have tackled both of these issues head on.

Firstly, as the first independent agency to be IAB Gold Standard Accredited with the aim of reducing ad fraud and improving brand safety for our clients, we are completely transparent in our digital buying contracts and treat programmatic display as we do all media investments – setting clear measurable KPI’s and reporting and optimising against them.

Secondly, in seeking new growth for clients, we were intrigued by a global report from WARC in 2019 which highlighted the effectiveness of geo-targeted programmatic display. Tight geo-targeting, ideally combined with dynamic creative drove increased effectiveness for advertisers in Russia, USA and Germany.

We tested this strategy, setting up a geo-targeted programmatic display test for each location of our clients’ 100+ local physical “stores”, and quickly found very effective results which has led to scaled investment. It produces new customers at c.50% of the CPA of other media, and at three times the response rate of an equivalent national campaign.

So, our advice? If you are returning to local advertising as lockdown eases, or if you want to accentuate local messaging within your media mix, don’t just default to historically effective channels like OOH, local press and radio. Do consider testing programmatic display, with tight geo-targeting and dynamic creative as part of the media mix. It may reach audiences and generate growth that is not available elsewhere in this new changed world we live in.

For more information on how programmatic display can drove growth for your brand, please contact us.

[i] Source YouGov Covid-19 tracker May 20 [ii] Source: Rare consulting tracker June 2020 [iii] Source YouGov Covid-19 tracker May 20 [iv] Source: GWI May 2020 [v] Source: ComScore MMX April 2020