How Programmatic Advertising Can Make Christmas Come Early for Small-to-Medium Retailers

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By Mikael Kreuger, CEO of Match2One, part of Verve Group

Retailers are experiencing the pressures of a weaker economy: when three-quarters of the world’s largest advertisers feel their budgets are subject to intense scrutiny, this will only be magnified for businesses with fewer resources. However, it’s not all doom and gloom — with only one in five consumers intending to cut their Christmas spending and the majority of consumers looking to spend,  the festive season looks set to remain the biggest quarter of the year.

To win a slice of consumer spending, larger retailers are leveraging the benefits of automation in their online ad campaigns. Also known as ‘programmatic’ this offers a way  to reach the right audience while making the most of budgets, as well as streamline complexity.

So, how can it help small-to-medium sized retailers maximise the potential of their seasonal ad campaigns in this uncertain economic landscape?

Programmatic advertising explained

Programmatic advertising, streamlines the ad buying process through automation. It uses data and algorithms to enable retailers to reach their desired audience at the best moment with the most cost-effective ads. This automation lets businesses execute digital campaigns with greater efficiency than traditional ad buying, which is slower and more labour-intensive.

Alongside creating efficiencies, automated capabilities can also offer retailers more control over what ad space they purchase, ensuring ‘brand safety’. Brand safety is compromised when digital ads appear beside negative, harmful, or inappropriate content, as this risks a retailer’s reputation through association. With programmatic solutions, retailers can avoid having their ads placed in inappropriate environments or alongside content featuring undesirable keywords by including these keywords in blocklists, which then prevent their ads from being served in these spaces.

Additionally, programmatic solutions allow retailers to be more precise in their planning and targeting, driving campaign performance and minimising wasted ad spend. Here’s how:

Increased efficiency 

Retailers can set requirements for programmatic ad buying such as which audiences they want to reach, which geographic locations they want to target, the size of their campaign budget, and what kind of ad space they want to purchase. They can then deliver ads to desired audiences at the optimal time and place for driving consumer action.

Programmatic trading cuts out the manual work of human negotiations and contracts. Instead, retailers can use automated technologies to select the best ad space from online media owners that matches their preset parameters. The entire process occurs in a fraction of a second, drastically streamlining how small-to-medium retailers execute their campaigns.

This can offer businesses a critical advantage, especially with major retail events such as Black Friday around the corner. More than two-fifths of UK consumers view Black Friday as their main opportunity for Christmas shopping, while 45% intend to have a bigger and better Christmas than ever. Using automation tools, retailers can react to opportunities quickly and maximise campaign performance.

Real-time optimisation 

Automation tools provide the ability to measure campaign performance and use these insights to optimise ad buying in real time. This creates a positive feedback loop that improves campaign results.

For example, if a business is looking to increase traffic to a specific product landing page, they can set up automated ad buying solutions to purchase ad space that delivers on this goal. Meanwhile, businesses aiming to boost conversions or increase purchase values can leverage the real-time optimisation capabilities of programmatic to identify and buy the most cost-effective ad space for achieving these objectives. The ability to monitor the performance of ads against any metric means retailers can continually maximise results and minimise wasted budgets through agile ad buying.

Access to the same type of technology and inventory as competitors 

By leveraging automated digital advertising capabilities, even retailers with limited resources are able to take advantage of a huge wealth of ad inventory. With 43% of publishers placing a strong focus on programmatic ads towards the end of 2022, they can seize greater opportunities to reach their desired audiences through the ad space these publishers offer. Larger retailers with the resources to hire media agencies have long been able to include programmatic digital advertising as part of their seasonal campaigns and tap these opportunities. With the right tools, however, retailers with smaller budgets can also transform their online advertising at a fraction of the cost using automated technologies.

What small-to-medium retailers should consider when adopting programmatic

Barriers — Although programmatic is far more efficient than traditional ad buying, it has gained a reputation for being inaccessible to many. For the most part, this is due to resources. The investment typically needed to set up automated digital advertising capabilities has created a high barrier to entry for programmatic. Solutions that help businesses overcome this barrier by being affordable and accessible will support smaller retailers on their automated digital advertising journeys.

The different entry points — Platforms such as Meta and Google provide accessibility and scale for smaller retailers, but these platforms strictly control data on their audiences, limiting the insights available for optimising campaigns. Retailers looking to understand their consumers better can do so through user-friendly programmatic tools, which offer them control over their audience data.

Usability — For retailers that don’t have external teams to run their advertising operations, tools that can be used without previous automation experience will accelerate the execution of successful programmatic campaigns. This allows even the smallest retailers to reap the benefits of efficient digital advertising, ensuring they can compete for a slice of consumer spend during the festive season.

Programmatic advertising offers small-to-medium retailers the opportunity to maximise advertising budgets, boost campaign performance, putting them on a level playing field with larger players.

Brands that embrace this approach will put themselves in a strong position to seize sales opportunities during the most competitive time of year and beyond — whatever comes next for the economy.