Pharma Starts to Get On Board With Programmatic Strategy

By | 2016-11-04T16:56:46+00:00 August 23, 2016|Innovation, Marketing, Technology, Viewpoints|

The ability to purchase online ads in real time – showing the right ad to the right customer in the right context – seems like a marketer’s dream. No longer do we have to blanket the Web in the hope that we might reach the right customer at the right time.

The recent Healthcare Ad-Tech and Programmatic Strategy Summit, held in August in Philadelphia, brought together some of the industry’s best advertising automation experts and pharma marketers. The two-day conference explored what is a brave new world for pharma marketers: the programmatic buying of online media. The technology is relatively new to pharma advertising, and usage is still low. But pharmaceutical marketers are discovering that there are technological solutions that can offset regulatory fears.

Programmatic ad buying is a rather simple concept: Your advertisement is provided to an automated ad placement service, called an ad exchange. An ad exchange is a technology that facilitates the buying of media advertising inventory from multiple ad networks. The ad exchanges match customer needs to your content through programming algorithms, hence the name programmatic buying. The program is able to determine what is displayed – and to whom. The program is also able to place your advertisement at an optimal price through an automated bidding system. Marketers are able to hyper-target consumers with enormous reach at a low cost, maximizing ROI.

But there is nothing simple about the technology. Programmatic technology determines the available ad inventory at any given time, and other technology – such as real-time bidding (RTB) automation – purchases the inventory in milliseconds. The heart of programmatic automation is a demand-side-platform (DSP) that serves as an automated media and data exchange. DSPs merge lifestyle data, purchasing data, online habits, demographics, and even offline behaviors to hyper-target consumers. Continuous optimization and “look-alike” buying can provide enormous reach at low cost. Automated media buys can be executed through ad exchanges (OpenX, AppNexus, DoubleClick, to name a few) or trading decks that bid on available media inventory from vast networks of online publishers in real time.

The Latest Advances in Programmatic Technology Have Changed the Game

Back in the 1990s and much of the 2000s, digital advertising deals were planned, bought, and executed by humans. Online media was bought on a cost-per-thousand (CPM) basis, a shotgun approach compared to today’s programmatic targeting and retargeting technology. Since waste was built into the process, the emphasis was on paying the minimal CPM for the ad inventory.

Fast forward to today, and machines have taken over. Complex algorithms crawl the Web and access an immense array of data to uncover consumer behaviors across a broad range of activities: online search, retail purchases, visits to healthcare and lifestyle websites, articles on news sites, video views, and more. Programmatic exchanges identify an advertiser’s likely targets in milliseconds, often overlaying demographic information that can predict the audience’s age, income, gender, and education.

Programmatic strategy is the polar opposite of a mass media approach. Programmatic strategies are an audience-first approach based on individual need – an individual is drawn to the content, as opposed to the content being served up to a massive, non-qualified crowd.

Why Marketing Automation Can Now Work for Pharma

In the recent past, the programmatic model has presented healthcare advertisers with challenges that simply aren’t faced by most other categories. In fact, most non-healthcare marketers want to do precisely what pharmaceutical marketers specifically can’t do – collect as much customer-specific data as possible in order to enhance the brand experience. Cookies have always presented an ethical and legal dilemma for pharma: Retargeting an individual who wants his or her condition to remain anonymous sets off regulatory alarm bells. Pharmaceutical ads can become intrusive when they are interspersed with a user’s online activities when he or she isn’t seeking health information. Another issue has been that pharmaceutical companies can’t completely control where the ads will run. For instance, pharma companies are prohibited from advertising to consumers outside the United States.

So How Can Pharma Take Advantage of Programmatic Buying?

Page-level targeting is a media strategy that gets around the problems of targeting individuals with cookies. Programmatic exchanges are able to score millions of pages based on numerous attributes, storing them as “inventory” in a database. A brand’s targeting criteria is entered into an indexing platform where it is matched to the most likely content for the audience. Behavioral targeting with cookies becomes a moot point with page-level targeting. An individual isn’t followed as he or she randomly navigates the Web, and because the page-level content is preselected it can be preapproved. The result in a sense is a return to the “safe” days when pharma marketers bought media across specific websites on a CPM basis – except programmatic buying eliminates the waste through hypertargeting technology. Additional technological advances identify the pages that have historically performed the best for a brand, ranking them higher.

Regulatory fears surrounding media automation and programmatic buying strategies are slowly being eroded by advanced technology that assures regulatory compliance. And in an industry that can use all the help it can get when it comes to effective yet compliant advertising and marketing, that’s very good news.

About the Author:

Robert Palmer
EVP, Digital Innovation Officer

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