Programmatic Advertising as a Priority
B2B companies are spending more on programmatic advertising and this is a trend that is expected to continue in the coming years. The increased focus in this area is being driven by a combination of improvements that B2B companies feel benefit their advertising goals, and changes in how these companies are now approaching their marketing.
Programmatic Advertising Definition
- Programmatic advertising is defined as the "use of Artificial Intelligence and machine learning to buy advertising in real time, instead of going through traditional means like human negotiations and pre-set prices."
- Another definition is "machines purchase ads autonomously based on the requirements set by an advertiser."
Major Growth of Programmatic Advertising
- EMarketer reports that 88% of spending on display ads in the U.S. will be from programmatic advertising in 2021. Although the eMarketer report is included for completeness, the data could not be accessed without providing contact information.
- The publicly available information did not provide a breakdown by industry, but with almost 90% of spending coming from programmatic advertising, it is safe to assume that this also applies to SaaS companies.
- EMarketer forecast that in 2019, B2B companies would spend $6.08 billion on digital advertising, which was an almost 19% year over year increase.
- While almost 60% of overall spending for programmatic advertising is on ads for mobile devices, mobile spending only accounted for 37.3% of total digital spending for B2B companies. Experts do not believe that mobile will ever account for more than 50% for B2B companies.
- According to a 2018 report published by SaaSCoach, 39% of tech companies were spending money on tech automation. There are still barriers to adoption as only 10% of respondents believed that programmatic advertising gave the highest return on investment compared to other types of advertising.
- While some BTB companies are still successfully marketing with sponsorships and podcasts, the more advanced BTB companies are utilizing programmatic advertising to target both accounts and people. In order for more companies to move in this direction, they will need to have the right internal technology and data to make these targeted purchases feasible.
- When programmatic advertising began, the lack of data was a problem for many B2B companies. Now the data ecosystem has advanced and it allows for more specific targeting that B2B companies are interested in.
- One way programmatic can help with targeting is by allowing advertisers to spend more time making creatives that are personalized. By spending less time on the ad buys, companies can spend more time on the actual ads to ensure they are engaging to the target customers.
- The B2B Advertising & Marketing Report 2018 by Adage and Dunn & Bradstreet found that 63% of surveyed companies were using programmatic advertising in 2017. Of the companies that were using it, 64% planned on spending more in 2018 than they did in 2017.
- There are several reasons that B2B is focusing more on programmatic advertising when they initially felt that it was not a good fit. One reason is the fact that B2B customers often want their buying experience to look similar to what it is for a B2C consumer. As mentioned above, programmatic ads are everywhere in B2C marketing and that is now moving into the B2B market.
- Another reason that B2B companies are more interested in programmatic advertising is because the media mix has expanded to offer more options. While it was initially focused on display advertising only, now marketers can use "programmatic to purchase native advertising, video and sponsored content," which are better suited for B2B companies. Additionally, Cisco estimates that by 2022, "82% of internet traffic will be video," which may make the ability to purchase video programmatically more appealing to advertisers.
- Finally, advances in reporting capabilities are helping to increase B2B interest in programmatic.
Availability of Private Marketplaces
- One of the concerns B2B companies have had in the past with using programmatic advertising was brand safety. The increase in the number of private marketplaces has alleviated some of this concern. Private marketplaces are typically run by trusted individual premium publishers, and are only open to certain buyers. This gives the companies increased confidence that the ads will be targeting real people on trusted platforms, which has resulted in increased spending.
- Forty five percent of advertisers indicated that they were moving spend to premium publishers. For many advertisers this feels like a happy medium between traditional ads and open exchanges.
We began our research on how SaaS companies are prioritizing programmatic advertising in the next one to five years by examining sites and publications with expertise in the area of B2B marketing. This included eMarketer, MarTech Advisor, and Digital Content Next. While these resources provided a large amount of data on the growth of programmatic advertising and its importance to companies, there was nothing publicly available on how and why SaaS companies are prioritizing programmatic advertising.
To provide the needed information, we then expanded the search to B2B tech companies as well as general B2B companies. All data provided above is focused on these specific areas unless otherwise noted.