Programmatic buying and customer experience go hand in hand

When we talk about the customer experience, we mean the overall experience that a customer has with a brand. For example, if they come into contact with the brand via an advertisement, this is referred to as a touchpoint. A complete customer experience includes all brand touchpoints, from the first time a customer becomes aware of the brand to a conversion. The aim is to satisfy a customer need at each touchpoint in order to create a positive feeling associated with the brand, and more and more large companies are recognizing the value of a successful customer experience. For the Lünendonk study "The market for integrated digital customer experience services in Germany", the CxOs of 121 large companies and groups were surveyed. The result: investment in digital customer experience is set to increase by around 46 percent in the current year. Those responsible are thus following the example set by major online players such as Amazon, Airbnb and Facebook. It has long been standard practice there to address users individually and according to their behavior.

The customer experience

A positive customer experience strengthens the loyalty of existing customers and increases the satisfaction of new customers. In order to be able to manage these perceptions, it is necessary to know the wishes and demands that are placed on a brand. This requires a data-driven approach. But which data can be used for this? Traditionally, 1st, 2nd and 3rd party data are used as data sources. 1st party data refers to data sets collected by the company, 2nd party data is data that is collected via an external source on the basis of strategic partnerships. There is also 3rd party data. This data is collected by third parties and is therefore also referred to as external data. certain data sets are more suitable than others depending on the objective. For example, 3rd party data is recommended for the initial approach of a user. It can be used to address anonymous users, i.e. users who do not yet have a cookie from your own website, on a gender-specific or location-specific basis. This can visibly increase brand awareness and relevance in the purchasing process. Ideally, dynamic advertising media are used for this purpose, with which the right message can be displayed directly, depending on the data set transmitted.

Retargeting can have a negative impact

If known users, i.e. website visitors such as shopping cart abandoners, are to be addressed again, this is done via retargeting. Retargeting is already a relevant and firmly established marketing tool in many companies, as retargeting website visitors promises the highest conversion rate. This in turn has a positive effect on the ROI (return on investment). However, anyone who thinks it is a good idea to simply address potential customers as often as possible is wrong. In particular, the use of numerous retargeting measures across different partners can have a negative impact on the brand in the long term, as frequencies are not coordinated. A user quickly feels "followed" in the truest sense of the word - which is the exact opposite of a positive customer experience. 1st party data can be used for retargeting measures. However, if the aim is to generate very specific audience segments, such as shopping cart abandoners with a certain net household income, this is achieved by combining data sources.

Individualized customer experience plays a significant role

However, it is not only the correct approach that plays a significant role in the data-based customer experience. A user experience on the website that is tailored to the user is also relevant for the customer and buyer experience. For example, Amazon has developed different payment methods to better meet the needs of different personas. The dynamic, often younger user has the option of making a quick purchase via "one-click", whereas the traditional user still has the option of completing the purchase via the classic shopping cart. The bottom line is that a good data-based customer experience means analyzing existing customers or prospects and dividing them into different customer segments. This enables an individual and coordinated approach or purchasing experience. If there is already a solid basic framework for the customer experience, it is important to constantly review and improve it in order to keep the quality high.

The programmatic pyramid

Figures from English-speaking countries (USA, Canada, UK) show that around ¾ of digital display advertising was purchased automatically in 2017. Forecasts that assume that programmatic ads will account for around 67% worldwide by 2019 are therefore absolutely realistic. In order to operate programmatic buying successfully and effectively, companies must first create certain prerequisites - comparable to building a stepped pyramid: the first step begins with the establishment of a solid foundation that enables the seamless expansion of all structures based on it. Translated into the world of online marketing, this corresponds to the implementation of a holistic tracking concept. The aim is to collect all available data within one tool in order to be able to evaluate campaign results from a cross-channel perspective. In addition, duplicates can be identified and conversion paths monitored, while a good onsite tracking tool also makes it possible to analyze important target group segments. In the next step, the lessons learned in this way can be applied in the individual purchasing tools, for example to specify targeting settings.

Use of the right purchasing tools

Once the foundations have been laid and error-free tracking is guaranteed, the next stage of the programmatic pyramid can be set up: the use of suitable purchasing tools. Once a certain volume has been reached, the purchase of a demand-side platform (DSP) can be considered. Although the use of a DSP is often complex and therefore costly, the advantages justify this additional expense: segmentation is far more precise, and access to additional inventory sources and formats that can be used in both the performance and branding areas is possible.The choice of a DSP should always take into account the tracking tool used in order to avoid friction losses due to incompatibility and to exploit integration potentials that enable greater automation. It represents the heart of the infrastructure, in other words - to stay with the image - the burial chamber of the pyramid. An ad server enables not only click-based data to be accumulated and compared, but also impressions and the associated effects on other key performance indicators (KPIs), and non-display measures can also be measured via the ad server so that a comprehensive view is possible. However, the ad server is more than just a tracking tool. Rather, it is a tool that can deliver banners, videos, rich media or dynamic advertising media and enables individual rules such as frequency settings, audience-based delivery or rotation testing. These are important components of a successful customer experience in the field of programmatic advertising.

Now comes the finishing touches

As soon as these three stages have been completed, the detailed work can begin. This includes the integration of all tools. These include tools for brand safety, viewability, ad fraud checks and feed management. This shows how important it is to consider the compatibility of the technologies to be purchased as early as the planning phase. The top of the programmatic pyramid could be a data management platform (DMP), i.e. a platform that makes it possible to combine different data sets with each other and thus create new segments for the purchasing process. Offline data (e.g. via the company's own CRM) can also be used here. Another option would be to integrate data from a data lake. This also aims to refine segments in order to achieve better performance.

The connection

So what is the connection between customer experience and programmatic buying? The answer is that they are interdependent. If programmatic buying works optimally, a suitable ad that is personalized for the respective user is displayed at exactly the right moment and in exactly the right place. This creates a positive touchpoint, as the advertised brand appears in the right environment for the user. If the ad also offers added value beyond the mere provision of information, for example a discount promotion, the positive impression is reinforced. The ad has therefore contributed to a successful customer experience and data forms the basis for programmatic buying. Its use enables specific audience segmentation and therefore the right approach for different users. Creating this basis is a sub-goal of a positive customer experience. Users who associate positive experiences with a brand like to spend time on its websites, possibly interact with interactive content, subscribe to newsletters or read relevant online articles on third-party websites. They therefore generate valuable data, which in turn is used for future programmatic campaigns. Customer experience and programmatic buying therefore go hand in hand on the way to more conversions and satisfied customers. *Jennie Hagen is Head of Paid Media at Artefact. Artefact (formerly Artefact-Netbooster) is a listed marketing agency (Alternext Paris, ALBNT) that brings together marketers and technologists. The agency works with the biggest global brands to reinvent the customer experience of tomorrow through modern technologies.