Welcome to Scout! Each week, our team tracks down the best digital marketing articles, POVs, and reports—so that you don't have to. Call it a weekly attempt to earn our "merit badge" for the marketing and advertising community. Check out the following links to stay ahead of the curve:
1. What Brands Can Do as Inflation Adds to Consumer Woes
With global inflation showing no signs of slowing, consumers are reevaluating their relationships with legacy brands in favor of lower-priced options. Here’s how brands can reassure weary consumers in these uncertain times.
2. The 4A’s is Telling its Members How to Crack Down on Unscrupulous Ad Tech Players
A recent whitepaper from the 4A’s advises members on how to reduce the complexity of programmatic trading, busts common misconceptions about the famously opaque landscape, and shares tips on how to find and exclude bad actors from media agencies’ supply chains.
3. Dear Men: Don’t Celebrate Us During Women’s History Month—Join Us
When March rolls around, we’re greeted by articles from women honoring those who shattered glass ceilings and bucked tradition to pave the way for future generations. But as Alexa McGriff writes in AdAge, to see real change, more men need to join in the fight.
4. Advertising Opportunities in the Metaverse
We’re still in the early stages of the metaverse, but that likely won’t be the case for long—and there are already several opportunities for brands to consider. Understanding and testing implementation now will help marketers get out ahead of the trend.
5. The 'TikTok Difference' Delivers—Here's How and Why
Given TikTok’s growth, engagement and performance metrics, it’s time for (most) marketers to add TikTok to their media plans and start testing performance marketing campaigns on the platform.
—
Check the Basis blog next Thursday for another edition of Scout!
The cannabis industry has seen explosive growth in recent years fueled by a wave of expanded legislative conditions and evolving consumer perceptions. Today, 18 states have legalized adult use while 38 now have medical marijuana laws. Last year, legal sales hit $25 billion according to estimates by analysts at Cowen, a number they predict will rise to $100 billion within the decade. We are also seeing various meaningful market-based progress in terms of shifting investment narratives, an ever-increasing global expansion of the supply chain, and premium publishers opening up to cannabis advertising (including Rolling Stone and Variety).
Despite all this, though, the category continues to carry some heavy baggage, and cannabis brands still have much to do when it comes to educating both the general public and potential customers.
To dissect all of that and more, Sam Hollander—the Chief Digital Officer at cannabis-focused company Enlighten—recently joined host Noor Naseer on our AdTech Unfiltered podcast series. Their discussion touched upon every aspect of the cannabis marketing landscape as it currently stands. Here are seven of Sam’s best insights:
(Answers have been edited for clarity.)
“If you are a new brand entering the market, you need to start with brand ownership. You need to put in the time to research and identify who your audience is, and whom you’re talking to.
There are several different ways to go about that:
“There are the traditional mechanisms of talking to your current and existing clients when they’re in the store or they’re checking out online. And then there’s also using other data providers, geo location tools, visitation tools, and historical purchase analysis to better understand where your product niche is and who the audience is that you’re targeting. Once you’ve done that, it’s about formulating your messaging around that so that you can better target those individuals.”
“It is a completely false misconception that people who smoke cannabis are lazy stoners. In fact, in August of 2021, there was a study done by an e-commerce company in the cannabis space called Dutchie that shows the majority of cannabis consumers are actually very successful, motivated, and health-conscious adults. There was another article by Insider, also last year, about a group of Peloton superfans who would like to smoke cannabis before they cycle.
“There is a myriad of different audience segments that are starting to come to the forefront in the industry. Gen Z was the largest growth segment last year—127% in terms of sales. Millennials grew 46% and Gen X grew 29%. And then additionally, women are becoming increasingly interested in consuming cannabis. About 35% of cannabis consumers are now female.”
“Education is a major, major piece for cannabis advertisers. It aids in providing a platform for potential consumers to learn about the benefits of the cannabis plant and what that looks like.”
“A great example of that is walking into the dispensary environment—most dispensaries are now fairly upscale retail environments that are built out with digital signage, kiosks, digital menus, and entertainment platforms. Those are all excellent opportunities for brands and retailers to use from a branding perspective, a messaging perspective, and an advertising perspective, where you can drive engagement and help visitors search and learn about different products. And bonus to that: that’s a great opportunity for a retailer slash brand to actually capture some consumer information. And by capturing that consumer information, bam, all of a sudden you have somebody that you can turn into a loyalist.”
“Fragmentation when it comes to measurement and attribution is huge. Yes, you can track online sales via standard universal pixels and other mechanisms, but ultimately there is not a unified ecosystem or approach that provides more of that one-to-one solution for cannabis brands and advertisers.
“Another major issue, or major hurdle I should say, is the regulations. A lot of marketers in this industry hear the words ‘digital advertising’ and they automatically go to Facebook, Instagram, TikTok, Snapchat—all the big social platforms—which we all know will not take cannabis dollars. So, as a result, they automatically assume they can’t advertise cannabis digitally. That’s actually not the case. There are now numerous different outlets they can use to advertise programmatically, like Enlighten.”
“In the U.S., there is no interstate commerce. What that means is, if you have a license in a certain state, you can only operate in that state. Now, let me clarify: there are companies called multi-state operators. Multi-state operators are essentially the largest of the large cannabis companies: Curaleaf, Canopy, Holistic Industries, and PharmaCann. Those companies have individual licenses to operate vertically within that state—meaning they can distribute and, in some states, have their own brands as well as sell in a retail environment.
“It is technically illegal to cross state lines, both from a consumer perspective and from a business perspective. So, as a result, you have to operate within the confines of that state. So, if you are advertising with a multi-state operator, a lot of times you have to look at multiple sets of creative and multiple different rules or regulations and almost operate as if you’re setting up three, four, or five separate advertising campaigns.”
“I think it's inevitable. It's a billion-dollar industry now and a billion-dollar industry equates to a lot of marketing dollars.
“So, I do think that it will ultimately happen. It's just a matter of when. Is that after safe banking is passed or some form of safe banking is passed? From a social perspective and a search perspective—meaning Facebook, Instagram, Google, Twitter, etc.—given everything that's going on in the microscope that they're under, I wouldn't be surprised if that didn't happen until federal legalization takes place in some way shape or form. Or the government comes out and basically says, ‘Yeah, even though we're going after you for all this privacy stuff, we're not going to stop you from going after cannabis dollars.’”
“The industry is evolving, which I think is very exciting. I also think that more and more brands, and that includes retailers, are starting to understand the value of multi-channel advertising—that's going to be very exciting to see the shift in evolution of what that becomes.”
~
For more insights and observations into the fast-growing cannabis industry, check our Sam and Noor’s conversation on AdTech Unfiltered in full. Click here to listen to the podcast.
Want to really up your cannabis advertising game? Download our guide, Cannabis Marketing in the Roaring 2020’s. It explores a range of subjects from cannabis consumer personas to best practices for cannabis brands, and everything else in between.
Every once in a while, something new comes on to the scene that sends shockwaves through the media and marketing landscape as we know it. The introduction of Facebook in 2004. The launch of the iPhone in 2007. The emergence of AR through Pokémon GO in 2016. These paradigm-shifting events—and there are many more besides—all fundamentally transformed how brands think about their go-to-market strategies. Today, if we are to believe the hype (and the billions upon billions of investor dollars that are fueling the phenomenon), it appears the metaverse is well-positioned to become the next “big thing” to join that esteemed list.
In digital advertising circles, the metaverse is one of the most noteworthy trends of the moment—and with good reason. For one, there is all the forecasts and research: many are writing about the possible reach and highly lucrative potential of this nascent medium. One recent study by Bloomberg Intelligence estimates the global metaverse revenue opportunity could approach $800 billion in 2024. Another by Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse.
Then there is the constant stream of dialogue around the subject. Be it stories exploring how heavyweight tech companies like Meta are going all-in on taking the metaverse mainstream, or news about major metaverse-related acquisitions and funds, there is a noise across the industry that is growing louder and louder.
For many (if not most) brands, the sensible approach to the metaverse right now is to learn, observe, and wait for the concept to become more tangible, as it is still far too soon to know which investments will be viable in the long term. But for those looking to be early adopters in the space, there are a few initial metaverse solutions that indicate potential use cases for advertisers. Although this medium will not be replacing the way we interact digitally any time in the near future, by exploring it now, brands can help take part in determining how this new reality unfolds.
At this moment, it’s difficult to pin down an exact definition of the metaverse because, for the most part, it does not fully exist. Some of the basic building blocks are already in place, including 3D gaming, blockchain technology, and virtual and augmented realities, while other necessary technologies are emerging all the time—like 5G internet, for example, or more intelligent hardware, or non-fungible tokens.
What we do know is that the metaverse is a place where the physical and digital worlds coalesce; a shared, interoperable, and collaborative virtual universe rendered in three-dimensional form. Many advocates see the metaverse as the natural evolution of the internet and smartphones, but rather than interacting via keyboards or touchscreens, users are immersed in dynamic, participatory environments that make them live actors in cyberspace. It is a concept that promises to transform the way people connect with one another, and it has the potential to disrupt a raft of everyday activities—from gaming and sports to business travel and education, and everything else in between.
So, just how can digital marketers start tapping into the metaverse?
One great place to look for guidance is the video game industry, where marketers are already exploring how the social aspect of virtual realities can enhance brand engagement and create fresh avenues of data collection. Of course, not all video games fall into the metaverse category, but some of the most prominent ones today showcase core metaverse attributes such as personalized avatars, multi-player modes, and the ability to interact with fellow gamers in real-time. Roblox, Fortnite, Decentraland, Somnium Space, and Animal Crossing are a handful that tick all these boxes, making them ripe grounds for marketers looking to experiment with both paid and organic activations.
Let’s breakdown three of the most popular approaches brands are adopting:
Gucci was one of the first big names to plant an early flag in the metaverse, teaming up with Roblox to create a virtual, two-week-long immersive art installation titled The Gucci Gardens. Inside this dreamy experience, users could wander around multiple themed rooms that paid homage to famous Gucci campaigns, throughout which they could try on and purchase digital Gucci items such as bags, clothes, and sunglasses. This time-limited campaign became a viral success after select in-game NFTs went Roblox limited (aka only available on the platform for a limited time and in limited quantities), and it ultimately helped Gucci gain some valuable early exposure for both its brand and its products before Roblox’s very young user demographics—i.e., the next generation of consumers.
Other companies have taken this concept of temporary activation in the metaverse one step further by building permanent in-game spaces. Vans, for example, has created a virtual interactive skatepark it has called Vans World, where fans can go to socialize, take on daily challenges, and acquire exclusive Vans gear. Nike, too, has entered the fray with NIKELAND, a digital arena inspired by the company’s real-life headquarters that offers users the chance to compete in various mini-games and check out new product offerings.
Together, these examples symbolize how forward-thinking brands are beginning to address changing consumer behaviors and deliver new, meaningful experiences. Marketing organizations today are typically meeting their audiences on their website and social media channels (or, in the retail sphere, in-store). But as we hurtle towards Web 3.0, these virtual in-game worlds may be one of the calling cards of the future. With this new touchpoint in their arsenal, media buyers can do a host of valuable things, including:
Obviously, not every brand needs to create its own distinct micro world, or even has the means to. Indeed, many are testing the metaverse waters with something more modest.
Case in point? Just look at the fashion and beauty industry, where numerous heavy hitters are attempting to revolutionize their go-to-market strategy by creating virtual flagship destinations accessible through VR headsets. Lancôme, Nars, Charlotte Tilbury, and Dior represent just a small sample of those tapping into this trend, and initial consumer perceptions look promising. The ability of these immersive stores to mimic real-life retail spaces and facilitate the effect of browsing is an extremely attractive proposition for consumers and brands alike. Today’s standard 2D e-commerce interface—typically based around a grid model—is great for purposeful shopping if consumers know exactly what they’re looking for, but it is not necessarily conducive to discovery or inspiring spontaneous purchases. Consumers don’t always go shopping because they need something specific; sometimes, they do so simply to peruse what’s on sale, keep abreast of the latest trends, or learn about new discounts. Virtual 3D stores can encourage these things in ways traditional websites cannot.
In certain metaverse realms, opening such virtual hubs is becoming a huge business. Platforms like The Sandbox, Decentraland, Cryptovoxels, and Somnium Space are all virtual worlds that specialize in this area, offering users opportunities to buy or rent digital real estate with cryptocurrency. Celebrities, companies, media agencies, art galleries, and countless others are rushing to snap up parcels of land in these metaverses, and some of the numbers involved are mind-boggling. For instance, Swiss fashion house Philipp Plein hit headlines recently with the news they had bought a plot of land in Decentraland worth a massive $1.4 million. And they’re not alone: Adidas, Care Bears, Samsung, and even more buttoned-up brands like JPMorgan Chase have all opened virtual spaces on these platforms.
What these pricey endeavors embody is a deep commitment to an enduring virtual presence. They are evidence that some brands don’t see the metaverse as some passing craze, but as something that is here to stay and worth investing in.
Away from the glamor and glitz of world-building, there are other, more subtle opportunities for media placements in the metaverse through in-game advertising. This is not exactly a new concept: even going back 15 to 20 years, advertisers had the ability to show ads relevant to the moment in virtual settings. One of the most famous examples was when Barack Obama purchased ad space in a number of games from Electronic Arts to support his first election bid.
The same idea exists now, only it has been expanded into the metaverse. Companies like Bidstack and Anzu enable game developers to showcase ads within their worlds, offering sponsorships on advertising hoardings within sports stadiums or on digital billboards that dot the streetscapes in Roblox City. In good news for advertisers, gamers are actually fairly receptive to seeing brands as they roam about in the metaverse, yet they would expect product placement to be relevant to their environment—just like in the real world. Particularly for smaller brands, this type of metaverse advertising is a chance to get their foot in the door without having to invest upfront in large-scale projects à la Gucci, Philipp Plein, and co.
As things stand, we are still very much in the early stages of the metaverse, but that will likely not be the case for long. Things tend to move at lightning speed in the tech industry, and there are already a number of opportunities for brands to consider. Understanding and testing implementation now will help marketers get out ahead of the trend.
Want to learn more about how you can prepare for potential advertising opportunities in the metaverse? Check out our webinar.
The digital ad industry has flocked to programmatic advertising in recent years. According to eMarketer, programmatic display spend is expected to reach $150 billion in 2024. And for good reason: Adopting programmatic ad buying into digital strategies has become a necessity for marketers looking to leverage data and technology to target their customers with relevant messages at the right place, right time—and the right cost.
And higher education institutions, facing an increasingly competitive market and needing to find innovative (and cost-effective) ways to bring quality, prospective students to their programs, are the perfect programmatic candidates.
Programmatic is a broad term representing automated technology infrastructure that is happening across media buying through different technologies that are available to us, like a DSP. In plain speak? Programmatic advertising is using technology to help you buy digital media.
Because higher education clients make up a large part of the business at Basis, we understand the unique set of challenges these marketers face. Our teams have worked with a wide variety of higher education clients and institutions, including both undergraduate and graduate programs, as well as online degree programs, and regional and national university campaigns.
Common sets of challenges have surfaced across all programs: the need to increase enrollment, drive qualified applicants to websites, promote awareness of programs, degrees, and certifications, and a lack of visibility into marketing budgets across universities. One of the biggest challenges our clients face is selecting KPIs and knowing how to best consolidate budgets between building awareness and driving enrollments—which are often conflicting goals.
The complexity extends beyond the schools to the students themselves. Prospective students are leveraging a lot of touchpoints, research tools, and devices in their decision-making process. They’re on their smartphones, their desktops, their laptops, and their tablets. Research takes place on school websites, search engines, digital brochures, and social networks. And don’t forget about old school tactics like word of mouth, open house visits, and school tours, and getting recommendations from their friends and family.
As you can imagine, decisions don’t come easily—or quickly. When does that final decision take place? That depends on the student. Some prospective students pick their program months before enrolling, and others make the final call the day before, which makes campaign timeframes more complex and significantly longer than other industries.
This means it’s more critical than ever to deliver the right message to the right consumer at exactly the right time.
That’s where programmatic media buying comes in. However, programmatic advertising knowledge and know-how across the industry varies wildly. Often marketers and higher education clients have plenty of questions about programmatic advertising, specifically around brand safety, cost, efficiency, and its general value and role in the digital ecosystem.
So, how can education marketers and higher education institutions approach programmatic ad buying?
Whether you’re just learning about digital or already have an established digital media plan, there are some common digital best practices, tips, and programmatic strategies that solve for all types of marketing challenges in higher education. We gathered a few below:
1. Engage Prospective Students
Your programs and curriculum are directed at specific consumers, and it’s important to make sure your message is reaching a qualified, prospective student.
2. Drive and Measure Meaningful Conversions
Don’t waste impressions. No matter what business problem you’re trying to solve for, it ultimately doesn’t matter unless you’re able to connect your marketing investment and dollars to measureable business results. Testing, tweaking, and optimizing will bring the most bang for your buck.
3. Don’t Forget About Creative
Programmatic ad buying should not replace personalized messaging. If you’re using the tools correctly, marketers should be able to leverage both data-driven tech and dynamic creative to develop campaigns that stand out.
4. Don’t Limit Yourself
The higher education audience is typically mobile-focused and pretty tech-savvy, making this audience a bit harder to pin down. These individuals gravitate to diverse digital platforms, and they should be able to find you there, too.
With the right digital partner, you can take a programmatic approach and make the grade in every category that matters to your organization. Interested in other Basis resources that will help you understand programmatic and earn the highest marks with your digital strategy? Learn more about the programmatic advertising opportunity with Basis here.
Misinformation, disinformation, alternative facts, and big lies—all are uncomfortable realities that advertisers must contend with in the Post-Information Age. With brand safety at stake, how can marketers sidestep questionable content and position their brands responsibly?
Cedar Milazzo and Matt Rivitz of NOBL Media join the webinar this month to help us delve into the issue of misleading content from an advertising perspective. Tune in to learn how marketers can use tools like NOBL to ensure that their campaigns avoid misinformation and propaganda while supporting high-quality journalism.
NOBL Media and Basis Technologies have partnered to provide solutions that empower advertising clients to run campaigns on highly trustworthy content.
Frequent reporting, quick experimentation, effective optimization, flawless execution.
This is the basic blueprint for success for any digital advertising campaign. Of course, there are great nuances to each stage, but this is essentially what a successful advertising strategy in action looks like.
Two decades ago, this cycle was fairly simple to manage. Marketers only had to concern themselves with building a couple of creative iterations, reaching one device, measuring a handful of cost types (for example, CPM or PPC), and utilizing a few tracking methods. However, today’s reality couldn’t be starker. The explosion of digital intermediaries, coupled with the continued emergence of new channels, has irrevocably changed the media landscape—enabling a proliferation of touchpoints and breeding an environment rife with fragmentation.
To combat these challenges, many marketing organizations have simply added more and more single-point solutions to their technology stacks—the theory being that separate, bespoke systems built to master individual channels or specific devices will ultimately drive the best results.
This tactic was once powerful enough to satisfy consumers who wanted nothing more than the basics, like quality service and competitive pricing. But meeting the needs of today’s consumer is a far more demanding proposition. They assume the promotional code they see on Hulu will be valid both on a website and in-store. They believe if they fill up their basket online and close the desktop window, said basket will automatically transfer to the mobile app. They presume an online chat agent will have full knowledge of the complaint they lodged days ago on social media. As such, unified cross-channel experiences and cross-platform mobility are now overtly baseline requirements for brands.
These evolving consumer expectations—driven by tech-savvy millennials and Gen Z—are perennially pushing marketers to improve the seamlessness of their advertising operation. Those that fail to do so will fall behind the curve.
Consider these statistics:
Together, these numbers highlight just how important it is for brands to embrace an omnichannel marketing strategy that works by breaking down silos and putting audiences at the very center of the advertising experience. By doing this, media buyers can get hyper-granular and more precise with their execution, delivering relevant messages that meet individuals right in their moment. Examples of this in practice might include:
The benefits of this approach are both profound and wide-ranging—heightened operational efficiency, improved customer retention, and increased customer lifetime value, to name but a few.
However, these sizable rewards don’t come easily, and the path leading to them is riddled with complexity. Many companies have attempted to implement an omnichannel strategy, yet few have truly succeeded in constructing a sweeping, unified experience for the consumer. Some don’t even bother initiating the process due to the perception that the effort would demand an unreasonable amount of time and personnel resources, while those that have done so often stumble because of immature implementation methods, competing priorities, slow progress, and spiraling costs. The most significant hurdle, though, is technology: legacy systems designed to run basic single-channel consumer interactions lack the necessary interconnectivity inherent to a true omnichannel experience, which can create massive holes in the ambition for single, holistic campaigns.
The good news for media buyers is that novel solutions are coming onto the market equipped with everything required to nullify all these barriers simultaneously: genuine omnichannel advertising platforms.
This new breed of cognitive technology is a game-changer for advertisers. The omnichannel platform empowers marketers by connecting all the major digital channels—programmatic, site direct, search, social, and connected TV—in one centralized ecosystem, thereby simplifying campaign management and execution. It ultimately consigns the days of multiple single-point solution logins to the past: with omnichannel platforms, marketers can buy programmatic audio inventory, negotiate guaranteed direct page takeovers, and run a series of dynamic carousel ads on Facebook from one interface.
To be clear, this technology should not be confused with omnichannel programmatic platforms that deal solely in the programmatic sphere. An omnichannel platform can do everything those systems can and then some, pulling together all the core components of an omnichannel campaign and adding on top a combination of solutions like workflow automation, integrated reporting, and other AI-powered functionalities built to enhance collaboration and partnership both internally and externally.
By leveraging this type of all-in-one digital media technology, marketers can gain instant access to every tool they need to power data-based growth and unlock massive time-saving benefits that can transform the way they communicate and engage with consumers.
For marketing organizations large and small, the practice of data consolidation has never been more important. It is the key to building the kind of data-driven culture that’s fundamental to success in a severely fractured industry. Data itself is a dynamic asset, and marketers rely heavily on its accuracy to run effective programs that drive overarching business goals. Unfortunately, many still find themselves perpetually handicapped by incomplete analytics, where siloed data lies scattered in a mix of disparate systems, email chains, Excel spreadsheets, and other communication channels such as Slack or Teams. These limitations are time-sapping and inefficient and make it nearly impossible for marketing organizations to maximize ROI.
With the implementation of an omnichannel platform, marketers can remove such hindrances from their day-to-day by activating a system of record that automatically consolidates, aggregates, and stores campaign data in one centralized hub.
It is a move with two major advantages.
First, it presents a better investment in human capital. By effectively untying talent from tedious, task-oriented manual data cleaning processes, marketing leaders can unleash their team on more meaningful strategic initiatives that create real impact—a shift that’s likely to open a direct path to employee fulfillment (and retention).
Second, it promotes better collaboration. When data consolidation is the working model, all groups under the marketing umbrella can see valuable data sets that would have otherwise been sitting inaccessible across multiple venues. This simplification of campaign intelligence can ultimately unlock synergies and reveal unforeseen opportunities for interoperability.
Creative type A resonated well in California but performed poorly in Michigan. Customer Y browses online but always moves to in-app before purchasing. Prospect Z was in a campaign targeting utility buyers but actually purchased a luxury product. Creative type B converts 75% more from Forbes over Yahoo Finance.
When organizations adopt an omnichannel platform equipped with a robust reporting engine, they can give their marketing and media buying teams unprecedented granular visibility at scale. In simple terms, this analytical architecture can surface real-time correlations and customer behaviors that were previously invisible to the naked eye. It automates the process of merging disconnected reports and displays them in dynamic, interactive dashboards that break down media performance on both micro and macro levels.
This type of omnichannel platform can radically change the day-to-day working lives of media buyers and analysts. No more manual data stitching. No more missing spreadsheets. No more guesswork required. Everything automatically unified. With this technology in their arsenal, organizations can essentially do six hugely important things:
The actionable intelligence this reporting engine can provide is startling. It enables campaign optimization on levels that are virtually impossible to reach without it.
A 2021 survey revealed the majority of advertisers use seven platforms in a typical day and nine platforms over the course of a typical ad campaign. The findings are evidence that for all the incredible progress the industry has seen around digital processes and the development of AI-powered support—particularly over the last 10 years—there has been a stark lack of any proportionate upgrade to the technology and procedures designed to help marketers manage it all.
Omnichannel platforms remedy this growing imbalance. By deploying campaigns across all programmatic, site direct, search, social, and connected TV channels from one singular interface, media buyers no longer need to bounce around between multiple disparate systems in order to simply do their job. The real-world implications of these efficiency gains are massive—shortened workflow processes allow marketers to be nimbler with their movement of media weight and can help them adapt digital spend around unplanned events more quickly to improve profit margins. Whether it is uploading new media to a specific channel, iterating on creative within existing assets, altering the segmentation of targeting parameters, or pulling entire omnichannel campaigns from the market, procedures that once took days—or even weeks—now take mere hours.
All of this increases a brand’s ability to keep pace with the forever-changing demands of consumers and deliver impactful advertising that flows freely across channels.
Today, success with omnichannel marketing is not the daunting, seemingly unachievable aspiration it was. An omnichannel platform makes it all possible by providing marketing organizations with all the functionalities they need to create a customer-centric, journey-focused approach that is now so vital in the fight to win hearts and wallets.
The data shows that the demand for seamless experiences is high and utilizing multiple disconnected single-point solutions simply won’t meet them. It is now up to marketers to evolve with the times and deal with these expectations head on. This all-encompassing technology is the starting point.
Each month, Basis Technologies’ Programmatic 101 series tackles a different facet of programmatic advertising—from best practices for buyers, to competitors in the space, to trends you should know.
One of the most complex aspects of programmatic buying is the ability to decide how much you’re willing to pay for an impression. As the advertising industry has evolved, so too have the bidding models and strategies available. Below, we dive into the evolution of bidding models, from waterfall auctions and header bidding to first- and second-price auction models and bid shading.
Before we get into the different bidding methodologies, let’s get clear on the meaning of real-time bidding, or RTB. Contrary to common misconception, RTB is not synonymous with programmatic!
RTB refers to a buying method used to purchase a single impression via an auction-based system in real-time. Programmatic, on the other hand, is a broad term that represents the automated technology infrastructure that enables media buying.
So, you can use RTB to buy inventory programmatically, but there are other ways to buy inventory that are not in real-time, such as programmatic direct and preferred deals. In other words, RTB is always programmatic, but programmatic encompasses more than just RTB.
Now that we’re clear on what RTB entails, let’s talk about the various models under the RTB header.
When RTB was first introduced, inventory was sold to one ad network at a time. The term ‘waterfall auction’ describes the norm for bidding during this time.
In a waterfall auction, publishers reach out to ad networks one by one, giving priority to larger networks and networks that have yielded more revenue for a publisher in the past. This means that major players like Google Ad Network receive more exposure to auctions, even if there are other networks willing to pay a higher cost.
Header bidding was introduced to address the inequitable nature of waterfall auctions. In the header bidding model, all buyers bid at the same time. This model provides an equal playing field for all buyers despite their size or revenue yield. Today, header bidding has almost achieved the level of an industry standard.
First-price and second-price bidding models are yet another variable to be considered in RTB. In the first-price bidding model, the buyer pays the exact amount they placed for their bid. For example, let’s say Advertiser A bid $4.00, Advertiser B bid $3.00, and Advertiser C bid $3.75. Advertiser A would win the auction because their bid was the highest, and they would pay $4.00. Since buyers have no idea what their competitors are bidding, this method leads to higher bids.
In the second-price bidding model, the buyer pays $0.01 more than the second-highest bid. Using the example above, in a second-price auction, Advertiser A would pay $3.76, or $0.01 more than the second-highest bid.
While second-price bidding has historically been the standard, giants like Google Ad Manager have moved to the first-price model in recent years.
For buyers to remain competitive in a world of first-price auctions, bid shading has emerged as an automated method for bidders to better determine bid amounts. Bid shading algorithms analyze historical bid data, looking at factors like site, ad size, exchange, and competitive dynamics to inform bid recommendations. Bid shading is so nuanced that it can help predict bid prices by tactic, which allows publishers to receive the highest bid while ensuring buyers keep their bids as cost-effective as possible.
To learn more about the benefits of bid shading, check out Why Bid Shading Should Be Part of Your Programmatic Strategy.
There you have it: from waterfall auctions to the introduction of bid shading, RTB has seen many evolutions since its beginning.
Hungry for more? Check out Basis’ Programmatic Advertising Essentials Certification to gain a fundamental understanding of the programmatic landscape.
Plus, keep your eyes peeled for next month’s installment of Programmatic 101 to learn more about Private Marketplace deals, another form of real-time bidding!
The following is adapted from the Basis Audio Advertising Guide. To get even more audio advertising insights, strategies and statistics, download the guide today.
Have you heard the latest on audio?
This year, US adults will spend an average of 99 minutes per day listening to digital audio. That’s a 20% increase compared to just three years ago and almost a half hour more than they’ll spend on social media.
Whether you’re a podcast-binging fiend, a workout playlist obsessive, or a regular on Twitter Spaces, audio advertising is increasingly finding its way into our everyday lives. Accordingly, it is also accounting for an increasingly significant slice of many digital advertising budgets, with marketers eager to reach audio consumers on their platforms of choice.
Want to find out more about the different audio channels you can use to reach your target audience? Let's dive right in!
Think traditional radio is a dinosaur? Then we might as well be living in Jurassic Park, because ancient or not, traditional radio is still a beast in the audio world.
Traditional radio includes both terrestrial (AM/FM) and satellite (SiriusXM) radio. While perhaps not as new or sexy as digital audio, traditional radio still makes up the majority of audio ad spending.
About three-quarters (76%) of total time spent with ad-supported audio happens on AM/FM radio. However, the number of Americans who are regularly listening to traditional radio is ever-so-slowly creeping downward, dropping from 88.3% of the population in 2019 to just 84%— and it’s projected to slip even further in the years ahead.
Of course, this is still a sizeable portion of the population, making it a sensible part of any marketing mix. If impressions are your KPI, then terrestrial radio is still a premier audio channel, with Nielsen finding that AM/FM radio generates 3x the impressions of Pandora and Spotify combined. However, due to the nature of terrestrial radio, the impact of those ads is harder to track than, say, ads placed on a streaming service.
The COVID-19 pandemic accelerated the downward trend in traditional radio listeners and, with it, radio ads’ share of the overall audio ad—from 66.7% in 2021 to an estimated 59.7% in 2025—as advertisers begin to shift their budgets elsewhere.
Streaming platforms like Spotify and Pandora are to radio what CTV is to cable: a disruptive digital force that offers advertisers new opportunities to target and reach specific audiences. Whether it’s rocking out to a favorite band in the car, working out to a high-tempo playlist at the gym, or discovering a new artist while you cook, streaming music is a welcome companion to millions.
After an initial dip at the start of the pandemic, streaming music has taken off in recent months. People are streaming more and more music from a variety of devices, including phones, work computers, smart speakers, and smart TVs. The result: in 2021, digital audio finally surpassed traditional radio in total audio time. Indeed, as Bob Dylan might croon from your Spotify playlist: the times, they are a-changin’.
While many streaming platforms offer ad-free listening (or, in the case of Apple Music, are entirely ad-free), a 2020 survey found that 55% of Spotify users and 79% of Pandora users opted for ad-supported tiers. Overall, the number of US digital audio listeners is growing—from 218.6 million in 2021 to an estimated 230.8 million by 2025. Spotify is expected to grow by nearly 20% in the next four years to 100 million US listeners. And US ad revenue for both Spotify and Pandora is on the rise: in 2022, Spotify ads are expected to take in $685 million, and Pandora’s an astonishing $1.25 billion.
Active listening has rising steadily risen since the start of COVID, as people spent more of their time at home instead of commuting. Behold: podcasts, an episodic series of digital audio files that users can download to a personal device for easy listening. They can tell a story, educate and inform, incite emotion—or do all three at the same time. They’re a perfect place for audio ad placement/spend, and right now, podcasts are booming.
An estimated 116 million Americans, or 41% of the U.S. population over 12 years old, are now monthly podcast listeners—an 11% increase over 2020, according to Edison Research and Triton Digital.
Podcast ad spending in the U.S. will cross the $1B mark this year, and its ascent will continue in the years to come: projections state that ad spend will exceed $2B by 2023.
While the podcast realm is undoubtedly a huge opportunity for marketers, only about a quarter of large advertisers are investing at scale in this space today. However, programmatic podcast ad spending is expected to more than double between now and 2025, so advertisers would be wise to work podcasts into their digital audio advertising strategies soon rather than later.
Audio on social media is still gaining traction, but it’s already providing new ways for users to stay connected. It seems that almost every social platform is considering their own take on the function and how it could be integrated into their respective app. While social audio inventory is not yet available programmatically, this is a fast-growing space and definitely one to watch in the years ahead.
Meet some of the latest and greatest players:
Clubhouse is an audio-based social network where people can spontaneously jump into audio chat rooms together. Users can view unlabeled “rooms” of all the people they follow and join to talk, listen along, or just look around to see what piques their interests. High-energy rooms attract larger crowds, while slower ones notice more participants slipping out to join other chat circles. Worldwide downloads of Clubhouse soared to 10.1 million in February 2021, but appear to have mostly slowed in the months since.
Reddit is currently testing its own take on audio social with ‘audio rooms’ in subreddits. The self-proclaimed ‘discussion website’ has been working on more options to boost real-time engagement and interactions over the past few years, with the additions of live-streaming, in-app messaging, and random group discussion to better connect users with similar interests. Audio social rooms provide a way for Redditors to enhance community connection and engagement by dropping into real-time chats about their favorite topics among other Redditors whom they already know and follow in the app.
Facebook also wants you to start talking and listening on its platform. The platform’s audio plans include an array of new products, including:
• An audio-only version of Rooms, a video-conferencing product it launched a year ago (amidst the mid-pandemic race to Zoom)
• A Clubhouse-like product that lets users listen to and interact with speakers on a virtual stage
• A voice message product that allows users to post audio in newsfeeds
• A podcast discovery product that will be connected to Spotify.
Twitter launched its own version of social audio, dubbed Spaces, in April 2021.
LinkedIn, Discord, and Instagram are also starting to embrace social audio, as well as a variety of startup apps, like Fireside and Stereo.
Audio is everywhere, and the advertising opportunities are endless. Check out our Audio Advertising Guide to learn more about the world of audio and see why digital audio advertising should be a larger part of your media conversation.
Historically, programmatic advertising has operated on a second-price auction model. In recent years, however, giants like Google Ad Manager have moved to a first-price auction model, citing transparency and simplicity as reasons for the switch.
So, what’s the difference between first-price and second-price models, and what does it mean for programmatic marketers?
Let’s say you want to get your best friend something really special for their birthday. You find the perfect gift on an auction website—a signed, out-of-print record from their favorite band.
You see that a couple of other people have already bid on the record—Bill bid $50, and Jane bid $75. Your maximum budget is $100, so you bid that amount. Depending on whether the website uses a first-price or second-price auction model, here’s how your bid will play out:
First-price auction model: You’ll pay the exact amount that you bid—$100.
Second-price auction model: You’ll pay $0.01 more than the second-highest bid, or $75.01.
That second-price bid sounds a heck of a lot better, right? The question is, in a world where first-price auctions are the standard, how can buyers save money while still submitting winning bids?
Let’s back up a few steps and say that you’ve developed an algorithm to assess the optimal bid. You tell the algorithm your maximum budget is $100. It then analyzes historical bid data for vintage records and estimates the lowest possible bid within your budget that’s sure to win the auction. With the help of your algorithm, you end up bidding $85—a price that’s lower than your maximum budget, but higher than the highest current bid. You win the bid, get the record, and your best friend is elated.
In media buying, the vintage record is an impression, and the algorithm you use to assess the optimal price is a bid shading algorithm that lives within the DSP you’re using to buy media. DSPs that offer bid shading automate the bid optimization process and aim to reduce the bid price that a buyer pays to win an auction.
So, why utilize bid shading? For brands and agencies, the benefits come down to time savings and cost efficiency.
Bid shading reduces the time that media buyers spend manually analyzing bid pricing to find the perfect bid and updating that bid throughout a campaign. This frees them up to do more of the high-skill, strategic and, frankly, enjoyable work that it takes to run effective campaigns.
In addition to the time efficiency bid shading affords media buyers, it also creates opportunities to win more impressions at lower prices, resulting in more efficient CPMs and more impressions at the same budget. As a result of lower CPM’s, bid shading can improve CPC, CPA, and CPV. According to AdExchanger, buyers save about 20% on average with bid shading.
Like programmatic advertising itself, bid shading is an example of automation at work. By automatically optimizing bids, it saves brands money and frees up media planners’ valuable working hours.
Bid shading is just part of Basis’ optimization suite, which saves time and increases efficiencies through AI and workflow automation. Learn more about how Basis is transforming the media buying experience.
