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February 18, 2015

Programmatic advertising, the automation of media buying and selling using technology and data for hyper-targeting, is one of the ad worlds’ hottest trends. Research firm eMarketer recently estimated that digital display ads bought programmatically in the US grew 137% to more than $10 billion in 2014, and now account for 45% of all display ad sales. eMarketer expects programmatic spending to increase another 47.9% this year and by 2016 to reach $20.41 billion, or 63% of U.S. digital display ad spending.

Why the tremendous growth in programmatic? With the rapid increase in digital media over the past decade, there was simply too much inventory for humans, both buyers and sellers, to keep track of. Previously, the inventory that was hardest to monetize was aggregated into popular exchanges, bought and sold through real-time-bidding (RTB).

Buyers were purchasing “remnant” inventory via RTB. Premium inventory on premium sites was still limited. Enter “programmatic direct” or “automated guaranteed” – as the Interactive Advertising Bureau calls it – which allows advertisers to buy guaranteed premium inventory in advance from desired publishers. While programmatic direct made up only 8% of all programmatic sales in 2014, according to eMarketer, it’s expected to reach 42% by 2016.

And that’s where pharma advertisers should take notice. While RTB-based programmatic buying focuses on audiences, usually through some kind of cookie-based tracking, often behavioral in nature, programmatic direct brings the focus back to the editorial environment of context and content where pharma brands like to be.

DTC advertising, after all, has lagged behind every other category, as per Nielson reports citing a 22% decline in display ad spending from 2012 to 2014. For an industry specifically dubbed “direct-to-consumer,” DTC has often appeared to be neglectful of where consumers are actually looking for product information – online! eMarketer, after all, noted that since 2013, consumer digital use has even surpassed TV viewing.

The situation is compounded when you consider how quickly consumer mobile use is growing. comScore reportedin August that mobile use had overtaken desktop use. And while 44% of programmatic spending in 2014 was already on mobile, eMarketer projects that number will also surpass desktop this year.

DTC, alas, is also lagging in mobile. Funmobility’s Mobile Advertising Trends Report 2014 found pharma dead last in mobile spending amongst nine categories, and concluded: “This provides a gap in marketplace saturation that savvy advertisers can capitalize on.” The solution? “Preferentially target mobile ads to tablets, not smartphones. Tablet owners tend to have more disposable income, are 3x more likely to make a purchase based on a mobile ad, and use their devices primarily for web browsing – which is the behavior that health and pharmaceutical ads need to encourage, in order to educate users about their product.”

Of course, most pharma marketers are already vying for standard destinations and portals. But they can add programmatic strategically to improve the efficiency of their media plans, find relevant patients with larger reach, and get access to targeted consumers at lower cost. Here are some possibilities:

  • Contextual – Target via contextual analysis at the page level to reach patients in relevant environments along the patient pathway.
  • Overlaying first and third party data sources – IMS, Crossix and Symphony, to name a few, offer different products to better target relevant patients across the exchanges.
    • For Example, look-alike segments…cookie-based, without following patients
  • Geo-targeting – Use prevalence of a condition, script-level physician data, or patient data to improve campaign performance.

With safety being paramount to the placement of any campaign, the proliferation of brand protection services offiers pharma marketers the ability to verify context, block non-human traffic, optimize for viewability, and more.

So, for pharma media planners feeling the pressure from increased CPMs caused by lack of quality inventory and too much competition for premium inventory, adding programmatic placements to the media plan may well be the perfect prescription.

Bill Jennings