If two of the top 3 online advertising channels are dominated by Google (Adwords) and Facebook (Facebook Exchange) respectively, that leaves programmatic as the 3rd channel available to most businesses testing online advertising.

To quote last installment’s explanation: “[P]rogrammatic [is] data-driven online ad exchanges that buy remnant display advertising space on almost every website and app out there, in online auctions that last milliseconds. Ever noticed local ads on national websites or ads that followed you around the internet? That’s programmatic.”

Google and Facebook both gather reams of information on your online activity. It’s how they are best able to target advertising to the right consumers while delivering more than 90% of each company’s total revenues.

So, what kind of targeting is available for programmatic?

There is much that can be learned about consumers based on their online behavior. There are three primary methods behind the targeting options available with programmatic, all of which are best used when matched with the information you have collected on current customers or prospects, your business objectives and your real world experience.

Time and Place Targeting

The first method is driven by time and place. That will set two important considerations when targeting your online advertising:

Day Parting

Set the times of the day you want your ad to be served. If you’re a restaurant, for instance, targeting the hours before lunch or dinner will maximize targeting hungry consumers before their next meal.

Geographic Targeting

Unless specifically blocked, internet devices (phones, tablets, desktop computers) will reveal their location by the network they use to reach the web. Geographic targeting serves ads by the location of the audience – from zip code, city, state and county to custom radiuses and geo-fencing.

Micro-Proximity Targeting

One type of geographic targeting is micro-proximity targeting. Micro-proximity reaches a precise level of targeting by using the information provided by location-enabled apps on mobile devices. Using that data from the app, ads will be served inside the app.

PioneerMedia is partnered with one of the pioneers (seriously, we can’t make this up) in programmatic, allowing us to target micro-proximity to 5 decimal places – down to 1 meter of accuracy. Most providers only offer geo-fencing technology to 2-3 decimal places – within 100 to 1000 meters.

Cookie-Based Targeting

The second targeting method is cookie-based, information stored by your web browser whenever you visit most websites. Cookies can track a lot of online activity and Data Management Platforms (DMPs) aggregate the data for modeling and targeting purposes.

Digilant has a good introductory overview of cookies. While most programmatic is cookie-based, it’s also the “loosest” of the targeting methods because of its widespread use and how different cookie providers parse and share their data. Not only is there a challenge separating robot traffic from human traffic, it’s also a challenge to separate different humans sharing the same browser on the same device.

It’s the only method, however, that actually tracks online behavior. There are broadly four types of cookie-based targeting:

Behavioral Targeting

Target consumers based on their behavior and tracked interest online. Based on your online activity, modeling will also infer your interests and overall profile. There is a wide-range of behavioral targeting options – from purchasing behavior to lifestyle interests. Brand affinity is a type of behavioral targeting, using brand preferences tracked by online activity as a targeting tool.

Retargeting

A type of behavioral targeting, this uses cookies to serve ads to anyone who has visited your website. If you’ve ever researched a product on a shopping website (like Amazon), you most likely have been followed by ads for the product you were researching, long after you’ve left that website.

Search Retargeting

Another type of retargeting that ties in search engine marketing (usually Google Adwords) with programmatic advertising, search retargeting uses cookies that track keyword searches conducted on the major search engines (Google, Bing, Yahoo, etc.) to drive online display advertising.

Content Targeting

Target consumers when they are interacting or viewing relevant content online. This requires the exchange serving ads to have a clear idea of the type of content being offered where the ad is being served. The range of content targeting options often matches the range of lifestyle interests. If there’s a magazine or online site dedicated to a certain type of content, then it’s probably a content targteting option.

Demographic Targeting

Modeling your online behavior and the content you consumer, basic demographic assumptions will start being made. Basic demographic modeled include age range, household income, gender, ethnicity and education.

IP-Based Targeting

While demographic modeling is relatively new in the cookie-based world, it’s been around for decades in the direct mail world. Our third method, IP-based targeting, bridges the gap between the two by tying online information to real world presence – specifically network nodes like the IP address on a wifi network and the unique ID every device provides on any network.

There’s only one company in the world that provides this type of information and PioneerMedia was an early partner. Long story short, technology and relationships developed to reduce credit card fraud have been redeployed to match IP addresses with physical addresses, effectively allowing businesses to target households and buildings.

You have to provide the addresses. Because wifi IP addresses can change and not every consumer can be tracked online, there is typically a 50-60% match rate. To maintain a minimum level of anonymity, a minimum number of households must be targeted. Both of these things also allow a healthy level of validation, however, allowing businesses to test response rates between matched and unmatched targets.

Venue Replay allows a business to map a location, say a sports stadium, by its wifi IP address and to gather individual device IDs that can later be matched to household IPs. This allows sports teams or sponsors, for instance, to follow the fans home.

These targeting options are invaluable to small businesses trying to attract new customers who are motivated to make purchases.

The use of programmatic targeting lets businesses pinpoint their target markets at an effective level never imagined before. Targeting maximizes marketing dollars, only presenting messages to those most likely to make purchases, based on your target market. It’s an excellent way to reach motivated buyers without first wading through people less likely to be interested in your product or service.

Compare the benefit of a marketing message tailored to specific consumers that appears on their devices with a blanket marketing effort that may or may not reach your intended audience.

There are only two things that can provide a higher return on investment (ROI) in digital marketing – a strong organic search position supported by search engine optimization (SEO) and content or an email campaign with a strong email list.

We can help you get started with programmatic targeting to grow your customer base quickly and efficiently.