Data management programs enabled with technology programmatic inventory has completely changed the way marketers buy media today. More and more companies are embracing technologies that facilitate media transactions in real-time and at a granular level. Programmatic buying ecosystem is at the core of this revolution and has triggered a paradigm shift from a conventional non-personalized mass media buying to targeted ad placements based on user behavior.
Programmatic buying means sale and purchase of media in real time in an automated manner through software and algorithms. Automation is real time and accurate to such extent that it not only saves time but also improves efficiencies in terms of ROIs and reaching a target audience with laser-guided precision.
While Programmatic buying has not yet taken the healthcare domain by storm, a buzz around the topic has started getting louder in recent times.
Media buying in healthcare quintessentially has been done in a traditional manner through sales teams approaching publishers either offline or online and then go through a long process RFQs, negotiations, preparing artworks and specs modifications, purchase indenting, vendor onboarding and eventually releasing payment. And all this convoluted process has to go through before the ad is even published. Hence there is a lag between purchase intent and actual media release. And that is what Programmatic is good at solving.
So how does Programmatic buying works and why hasn’t it caught the imaginations of healthcare marketer yet? Let us dig into details.
How does Programmatic Buying Works? The Programmatic Ecosystem
First, let us understand some commonly used terms used in the Programmatic Buying world and also how the Programmatic ecosystem actually works.
Step 1:
When a user clicks on a web page that has an advertising space on it, the publisher of the web page sends a cookie to user’s web browser (Chrome, Internet Explorer, Bing… whichever).
What is Cookie: Cookie, in simple terms, is a small data file that is sent from publisher’s web server to user’s web browser which serves to establish user’s identity
Step 2:
In case an inventory (advertising space on a web page) is available for sale, it triggers a request from publisher’s Ad Server to their Supply Side Platform (SSP) to fill the Ad slot
Definition of SSP: You may think of Supply Side Platforms (SSPs) like a library or storehouse of Ad Inventories available for placing your advertisement. It is a platform that connects sellers (web sites, blogs, directories etc.) with buyers or advertisers who compete against each other for available Ad space.
Some of the well-known supply side platforms are AppNexus, PubMatic, AOL or Google’s DoubleClick Ad Exchange.
Step 3:
SSP then issues a bid request to Demand Side Platform (DSP). This bid request contains information about the user who is about to see the Ad like her demographic profile, browsing history, etc. This information helps DSPs to make an informed decision about a user before making a bid.
What is a DSP? : Demand Side Platform or DSP, as they are referred in programmatic world, is a doorway to purchase advertising space in an automated fashion. Think of DSPs as advertiser’s gatekeepers who matches inventories with buyer’s marketing objectives. DSPs make bidding decision on behalf of a buyer after evaluating parameters like publisher’s profile, ad placement, the floor price of available impression, etc.).
Some of better-known DSPs include DoubleClick Bid Manager by Google, AdMission, MediaMath etc.
Step 4:
Based on the algorithm, DSPs assesses inventories to determine how valuable the impression is and whether to participate in the auction on behalf of an advertiser. If DSP decides to participate in bid auction, it sends a bid response back to SSP
Step 5:
SSP gathers all bid responses and picks a winner based on the second-price auction, that means, the one who bids slightly above the second highest bidder.
Step 6:
SSP notifies winning DSP and the DSP, in turn, sends Ad serving code to SSP. Finally, SSP passes on Ad serving code to user’s browser and renders the Ad. The Ad is then served along with other content on a web page.
And all these steps take place at a lightning speed at the back end while the page loads!
Types of Programmatic Buying
Programmatic Buying, as we know now, is automated buying of ad space on a web page. There are fundamentally 2 types of programmatic buying depending on whether the ad space or inventory is bought through auction (Auction based) or by paying a fixed rate to the publisher (fixed price).
Auction based:
Open auction: This is based on real-time auction-based bidding. Most prevalent of all programmatic buying
Invitation-only auction: This too is auction-based but bidding is limited to select advertisers selected by a publisher. More premium inventory sold at a higher price. Some publishers give ‘first look’ advantage to some advertisers before ad space is visible to others
Fixed priced:
Unreserved fixed rate: Price is prefixed but no ad space is set aside in advance
Automated guaranteed or Programmatic premium: This is an automated process of buying guaranteed ad space that doesn’t involve an auction, where the price is prefixed and impressions are guaranteed. Generally, this type is most premium of all types.
Scope of Programmatic Buying in Healthcare
By 2018, it’s projected that the healthcare industry will spend $2.2 billion on digital media. With roughly 40% of all media buys being programmatic, healthcare marketers have a great opportunity on their hands. Not only is programmatic the new buzzword, but it is estimated that 70% of all media buys will be programmatic in 2016. That’s significant growth over two years.
Healthcare media buying in India is still predominantly done through traditional spray-and-pray, at best loosely targeted media campaigns involving humans (read- sales team) that negotiate with publishers or media agencies to buy ad space or inventory. Programmatic buying, on the other hand, allows precision and previously unthought-of granularity to reach target customers with better engagement and lower costs. Let me present some real life scenarios to bring home the impact of Programmatic Buying in a healthcare setting.
Imagine you are visiting nearby pharmacy store to buy sugar control medication after doing some online search about medicines dosage and side effects. Suddenly your smartphone buzzes. Curious to know, you check your inbox and find email message inviting you to take a free diabetes check-up at a Clinic just a block away from where you are.
Almost scary, isn’t it! Well, this is what Programmatic can do. It reaches your predefined customers or audience at the right moment with a right message. And all this happens in milliseconds in an automated fashion, thanks to footprints, or say Cookies, you left while searching the web.
Programmatic buying has changed the approach from rendering same advertising message to millions of customers to creating a unique message for individual customers based on her need at that moment of time. A proof of concept for this could be how health insurance could be bought using a Programmatic platform.
While you were renewing health insurance policy online for your parents, an ad banner flashed across your laptop screen proclaiming to offer better coverage with add-ons at a lesser premium. The message is so timely and apt that you could not resist but clicking the ad. It feels that ‘someone’ is following your foot trails online. It turns out that there is indeed ‘someone’ that follow users to deliver messages that are very apt and timely.
Data gathering at forefront of Programmatic advertising
In a way, data analytics is the lifeblood of automated buying. Although an enormous amount of data is gathered in the healthcare industry, for instance, a hospital, hardly any of it is used effectively to build effective data-driven strategy.
First party data sources in hospitals like patient registration kiosk of Hospital Information System, CRMs or a Website can be used to capture customer intent by placing a cookie on customer’s browser which can then follow and track a customer’s online journey and place meaningful and compelling messages to drive engagement with patients or customers. This primary data along with a second-party data from affiliates or online subscription agencies and third-party data bought from outside data aggregators like telecom companies, other CRMs etc., is clustered to form homogenous group of audiences having similar traits like age, web browsing history, online purchases, content sharing on social media, medical content consumed, etc.
Let us conjure up a probable scenario for a hospital that is about to launch Diabetes Management Program and wants to reach targeted audience using their primary data base gathered over past years. Data points like e-mail address and contact numbers of patients undergoing care under endocrinologist would become a good audience pool to run targeted messages using GSP (Gmail Sponsored Promotions) or RLSA (Remarketing Lists for Search Ads) campaigns. While a GSP would enable messages to be delivered to prospective patient’s Gmail inbox, the RLSA campaign would ensure that message is rendered on user’s SERPs wherever they go online.
The best part of programmatic advertising is that it can integrate all media delivery options and deliver the message to right audiences wherever they live online be it video, search ads, mobile, display or social media. Such media optimization gets a captive and engaged audience to marketers resulting in maximum value out of marketing dollar spent.
Say you want to target women in their early 40s living in North Bangalore for promoting breast cancer screening. Programmatic-way of doing this is deliver your message to the in-market audience directly by capturing basic patient’s intent and then tracking their online behavior. For instance, say 45-year old women who visited your Oncology web page and is searching information online on “prevention of breast cancer”.
Challenges of Programmatic buying in healthcare
Programmatic Buying comes with its share of challenges and unethical practices that digital marketers have to stand guard against. Such bad practices permeate across the Programmatic ecosystem and are omnipresent across industries including healthcare.
In a highly regulated healthcare sector, these challenges are even more evident. So let me address some burning issues plaguing the Programmatic Buying in healthcare
1) Restrictions on retargeting: Hospital industry has been slow to adapt programmatic buying because medical ethics restrict any form of advertising to patients, even the audience retargeting using cookies
2) Ad misplacement: Ad placement while trying to reach a prospect, say a Physician in a non-clinical environment like a Game Center or Expedia Travel site may actually dilute importance of brand and message
3) Control: As previously mentioned, Demand Side Platforms are aggregators of inventory and make them available for Advertisers. However, in healthcare industry, not many reputed medical publishers like PubMed, WebMD, The Lancet, NEJM etc. may renounce control over their inventory to let open ad ecosystem like Programmatic take over. That is the reason why most medical publishers still prefer reserved, non-auction based on programmatic buying like either Programmatic Direct.
4) Higher costs: Due to publisher’s reluctance towards open-auction bidding in healthcare for reasons stated above, cost per impression (CPM) is higher than in other industries like retail and travel.
5) Inventory scale: Since ad spaces on medical sites is limited and finite, mostly they are bought via direct 1-to-1 Publisher-Advertiser model leading to inflated CPMs and suboptimal performance parameters (read ROI)
6) Stale-on-Sale:General impression is that a media bought through Programmatic model is often a leftover, remnant inventory. This is not entirely untrue in healthcare either. Media space buying in healthcare predominantly is either through direct buyout involving humans or direct buyout involving automation, called the Programmatic Direct. Hence, what is left is a less coveted, tier-2 inventory. Although buying this inventory may help derive engagement at much lower cost.
7) Private Healthcare Ad Exchanges:In view of medical data security, misplacements and privacy issues in healthcare, some proponents of exclusive healthcare ad exchanges have emerged. In fact there are already some media buying platforms in healthcare like MM&M, Compas etc. that allow automated buying to healthcare publishers. However, given that transparency and neutrality of open buying platform would be compromised with such agencies, there is little incentive for advertisers to work with such private ad exchanges. Besides, scale and inventory available with such private exchanges is also limited compared to full-service media agencies.
Aside these challenges that are specific to healthcare industry, Programmatic Buying has some inherent issues that are pervasive across industries. Such as some outlined below:
8) Non-human traffic: Non-human traffic or the NHT as is commonly referred in Programmatic world is the most prevalent form of fraud whereby programs imitate desired online behavior and register false matrices like impressions, views or clicks. Bots pretend to be actual humans while actually they are piece of malware that inflates the performance matrices by masquerading as organic activity. Common examples of this is paid ‘likes’ or ‘+1s’ on social media.
9) Viewability: Viewability is the probability of an ad to be seen. Many times a large proportion of impressions that advertisers pay for goes unseen either due to below-the-fold placement or user might scroll a page too quickly to see the ad.
Ad blocking: Today’s sophisticated programs allow users to remove advertising while browsing the internet or using apps. Most publishers and professional bloggers depend on advertising as the main source of their revenue. And with ad blocking in place, a blogger would lose an incentive to create free-to-consume content unless the alternate stream of revenue is available to them. Likewise, publisher websites lose interest since their revenue model based on content-for-advertising is compromised
In conclusion:
Programmatic buying has been a prominent inclusion in marketer’s quiver since last decade. Healthcare industry has been slow to wake up to this phenomenon due to industry-specific challenges. However, adoption of data, involvement of social media companies and proliferation of healthcare specific ad networks to manage automated buying in healthcare would only mitigate these challenges.
The healthcare sector including hospitals and pharmaceutical companies would be wise to consider programmatic buying as part of a core marketing strategy and move from broad, segment-based marketing to specific fine-grained messages crafted to attract, nurture and convert potential customers or patients.
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