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Small or Large, Brands Are Betting Big on Programmatic Ads This Holiday Season

Automation and targeting find fans at all budget levels

As the holiday season approaches, merchants are gearing up for more automated ad buys. Getty Images

Programmatic advertisers are bullish on the holiday season, as retailers and packaged-goods companies look to hypertarget audiences more than ever. And while major brands have used big data for a while, the strategies are also beginning to benefit smaller retailers around the country, underscoring how automated marketing continues to gain traction.

For instance, Hunt's Photo & Video, an eight-store camera chain based in Massachusetts, has increased its holidays digital ads budget by 25 percent after getting 723,000 ad impressions for only $3,800 during a one-month test it ran with programmatic provider OwnerIQ. Targeting young moms, the merchant is looking to drive foot traffic into its shops by running promos on sites such as Gymboree, Toys "R" Us and Zulily.

"It's already clearly working very well," said Rich Yagjian, evp at WB Hunt Company, which competes with other local shops as well as Best Buy and Sears. "And we are appearing right there with the big boys."

Like Hunt's, activewear retailer Pearl Izumi is getting into programmatic to drive traffic this year for the first time, using former Crispin Porter + Bogusky creative director Alex Bogusky's Visibl, a new video-marketing platform. Geoff Shaffer, Pearl Izumi's vp of global brand marketing, said the results that came from hypertargeting segments so far have been "like nothing we'd ever seen before."

"To me, it's not about the impressions as much as it is the [video] completion rate," he added. "Our completion rate was 30 percent, so when you think of a completion rate at 30 percent, that makes me think we're in front of the right people at the right time."

Programmatic vendor Flashtalking, which has seen its business increase by 50 percent so far this year, will help merchants like Walmart and Kohl's this yuletide season. "I don't see people questioning whether targeting is a good thing," said John Nardone, CEO of Flashtalking. "I see them asking how fast can we move."

In 2015, U.S. mobile programmatic ad spending alone is expected to more than double to $9.33 billion compared to last year, per eMarketer. That accounts for around 60 percent of programmatic ad display spending.

"The programmatic train continues down the track and it can't be stopped," said Jeff Green, CEO of The Trade Desk.

Half of the consumers surveyed by The Trade Desk stated they wanted their personal information used to provide them with a better shopping experience. With that in mind, tech giants are getting ready to capitalize on the holiday season with more data targeting and automation. Google last week launched a tool called Shopping Insights, a service that combines search and mapping data to help brick-and-mortar retailers identify trending products in specific parts of the country. And Pandora is touting the ability to accurately target Spanish speakers, allowing its audio advertisers to utilize copy in the right tongue. It sees "huge potential" for programmatic spending in the fourth quarter, said Jack Krawczyk, Pandora's vp of ad product management, adding that it "is really allowing a data story to emerge to find the right audience for your message."

Challenges remain for automation-minded marketers. In a 2015 survey of 500 CPG brands and retailers, Cofactor and partner Altimeter Group found the most common problem brands face in executing digital campaigns is a lack of budget for an effective omnichannel endeavor. "There is a disconnect between their strategy and their ambitions," said Rebecca Lieb, an independent analyst.

This story first appeared in the Oct. 26 issue of Adweek magazine. Click here to subscribe.

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