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This interview was conducted via video with Aaron Gomeztrejo, Group Director of Programmatic Marketing at Wpromote. His responses have been transcribed and edited for written clarity.
The Interview
Tell us a little bit about your background, how you got into marketing, and your journey with programmatic.
I started in nonprofit and social work of all things. I was nowhere near digital media until about 10 years ago when I had a family member reach out about an opportunity at a DSP. I was looking for a change— something a little bit more serious for a career. So I went in and took a DSP programmatic campaign manager job, leaving my social services role. Ever since then, I’ve hit the ground running. I love the tech aspect of getting to play with different software and tools. It just seemed like a lot more fun and more perks!
How did you learn the skills to be a campaign manager?
A lot of those skills came from being proactive and working with other divisions as I continued to grow my craft. For example, I didn’t know Excel formulas or even pivot tables, so I spent time with the data wizards to learn to master the basics. I felt knowing how to manually own and operate a campaign from ad trafficking, pixel placement, campaign optimization, and comprehensive media analysis would help me understand “the game” and differentiate myself from most. From there, it was really all about soft skills. I used to supervise a lot of case managers as part of my previous role. I was used to having up to 20 “clients” at a time which were all a high priority for me given the nature of the work. The job really just came down to reading people and situations and being able to communicate or articulate effectively. Now that I’m 10+ years into my career in programmatic, I’ve seen how those learnings from social service have helped me be successful today. I found so much value in that and so much return on that time spent. I wouldn't trade it.
Let’s dive into programmatic marketing. First of all, what does programmatic even mean? What channels does it encompass?
Programmatic is all about bringing data and media buying together. Outside of search ads or logged-in social media environments (we call them “walled gardens”), programmatic media is all media that is digitally accessible. It includes popular channels like online display ads, native banners, podcasting, and streaming television. It also includes other inventory, like the digital screens you see at airports and baggage claims. They're created and monetized by programmatic partners, and therefore they allow us to buy ads there. So if there's an audience you want to meet with a specific message, programmatic is the means to do that, especially when you don't want to reach them on just social media— you want to reach them anywhere, anytime, on any device.
At what point should brands explore entering into programmatic?
From a size of revenue or media spend perspective, I often see programmatic experts recommending that brands who have annual marketing budgets as low as $1M enter programmatic, and I disagree with that— it’s way too low. For brands that are small to mid-size and have larger competitors to try and counter, programmatic is going to be very expensive. They typically just want direct response focused advertising and haven’t hit a point of diminishing returns channels like paid social and search.
I think brands should be closer to $10M/year in spend before exploring programmatic. At that level of spend, you know what works for your brand on search and social almost to the point of saturation and are ready to start exploring new, scalable channels.
I think brands should be closer to $10M/year in spend before exploring programmatic.
Once brands are starting to see diminishing returns on existing channels, programmatic is primed to help. Programmatic can help those brands scale significantly because of its ability to reach larger audiences through a variety of mediums. In fact, I’ve worked with over a dozen programmatic partners that have a broader reach than even Meta does.
What’s the minimum budget required to run a test in programmatic?
Ideally, I like to see at least $250K in spend over 3 months. At that point, you’re going to get some impactful learnings quickly. At a bare minimum, you want at least $50K/mo, but as you want to add in more media types and ad formats, that’ll need to go up. Programmatic is one of the most expensive means to buy media in terms of total dollars spent, so it shouldn’t be entered into lightly. You can’t come into programmatic with $5-10K budgets and try to create an effective campaign— that’s not how it should be used.
How did you get to those numbers? Why $250K? Why 90 days?
You want hundreds of thousands of actions as data points within a programmatic platform. Impressions are good, but in this case, you want to see clicks and conversions. Since programmatic isn’t a true direct response channel, those actions will take time. With smaller budgets, most brands test channels for just a couple weeks. Within that time frame, you’ll never get to see the value of a programmatic platform. The high entry number is not to scare brands off, but you need to have enough to actually move the needle in major markets against bigger players. You want to make sure you can compete and get a statistically significant read. At $50K a month, we can get a good idea on a single channel like display (the least expensive programmatic channel), but even with that, you’re going to want at least 90 days so you can see the true value of programmatic technology.
How do you measure the results of a programmatic marketing?
I’d have brands provide some of their top markets and focus a test on those. I’m not the biggest fan of splitting up markets on an ongoing basis, but it makes sense as a test to see if programmatic is a viable channel. I’d take a set of markets to understand baseline metrics, then add display and online video to a section of that market pool. I’d use at least a 2-week lookback window after the test runs and evaluate how the test and holdout markets compare. Alternatively, if you’re hitting the $250K investment level I mentioned, you could probably get platforms to run true conversion or sales lift studies for free.
Let’s talk about creative. How much should brands be spending on creative for programmatic channels?
5-10% of total media spend is in-line with best practices, with 10% being the gold standard for the overall digital marketing space. Programmatic tends to be the bottom of the barrel when it comes to dedicated creative budget as a % of spend while paid social is typically the highest.
I’d be happy with 3-5% of media spend for programmatic. That’ll typically be enough for a good number of content variations. It also depends on the brand; some run new promotions every 2 weeks and others can get by with evergreen content for up to a year.
In terms of types of creative, static is the first thing that comes to mind for most brands, but I like to push away from that. If we can get animated content and videos that would be preferred. Of course, when looking at audio-based channels, like podcasts, the channel partners will typically provide that for you.
Lots of e-commerce brands are expanding into physical retail. How would a programmatic strategy differ based on the sales channel?
Driving in-store purchase vs. online traffic and sales is a significantly different campaign. I would look at audiences, channel partners, and creative completely differently based on the ultimate goal, because getting someone to walk into a store instead of purchasing online is a drastically different behavior and may even be a different audience.
Let’s dive into a specific example. The first brand that comes to mind is Magic Spoon. It’s a “better-for-you” cereal brand that operates an e-commerce store and sells its products in stores like Target. What would be the differences in the creative, channels, and overall approach you would use for Magic Spoon to drive sales online vs. in-store?
The biggest differences are going to be in audience, call-to-action, and how you’re showcasing your product. There is a need to meet consumers online and offline with tailored messaging to promote the right action.
When driving to stores, ads will often include co-branded elements, “nearest location”, and other engaging features that will not make much sense for an e-commerce play. The focus for e-commerce campaigns is on digital/online triggers demonstrating buying intent (searching for products, visiting relevant pages, blog content etc). For in-store activations, mobile device IDs presence in a location during a set period of time becomes a priority audience tactic.
If you want somebody to show up to Target, you’re going to want to know that the audience you’re targeting actually shops there. We could use a data partner like Factual and AdSquare that can tell us who shops there and how often. We can then overlap that audience with one that is likely to buy your product. That’s very different from an online strategy, where you’d want to target an audience that has been to your site or shown intent in your product category.
When has programmatic not worked for brands?
The primary reason is brands not wanting to get to a $50K/mo spend threshold. If that spend is too much of a stretch, programmatic likely isn’t the right fit for you. Also, if you have a very niche audience and your product doesn’t have wide appeal, it wouldn’t work well because programmatic is designed to reach large audiences. If you only have less than 100,000 potential customers, for example, I don’t think programmatic can make you money because there aren’t enough people to reach. The more mass appeal your product is, the higher the chances of success.
What trends are you seeing in the space that marketers should be aware of?
The biggest trend for me is cookieless and how media providers are developing solutions around it. This is going to bring room for new entrants and providers in the technology space.
Cookieless is the removal of 3rd party pixel/cookies for tracking in place of more compliant & updated methodologies. Previous audience targeting and reach along with media measurement is impacted as less revenue is attributed to paid media efforts. The industry is moving to this direction over the next year, so we have to test and expand cookie-less options across media programs to grow and concurrently demonstrate impac. Many of these cookie-less audience/data offerings are primarily achieved via integration with media supply partners. I highly recommend testing out offerings with and without media supply attached to the cookie-less audiences offered.
Finally, what channel are you most excited about in 2023?
I’ve really enjoyed seeing some of the higher reaching formats like digital out-of-home really blossom and make their way past just being “reach” channels. Now they can actually be used as more assisted touch, revenue-driving channels. Performance marketing focused brands now have the appetite to try these channels and reach people with a direct response message and call-to-action, whether it be a QR code on the screen itself or retargeting those audiences through device ID capture. Seeing more of these brands open up to the idea has been encouraging.
The Wrap Up
Key Takeaways
- Aaron believes brands typically preemptively enter into programmatic marketing; per his guidance, brands shouldn’t enter into it if they don’t already spend $5-$10M / year in media
- In order to run a programmatic test, you need to allocate at least $50K/mo over 3 months to see real impact
- Programmatic campaigns differ widely depending on the ultimate sales goal— don’t try to run a single campaign that impacts both in-store and e-commerce sales
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