Combining SEM and Programmatic Advertising to Drive Better Performance

Hello and welcome to The Simpli.fi Webinar Series. I’m David McBee. Thanks for joining us each month for industry news, interviews, product rollouts and training on all things related to targeted advertising and connected TV. The Simpl.fi webinar series is available on demand with new episodes posted each month at simpli.fi/webinars along with all of our previously recorded episodes. It's May of 2023 and this month we’ll be talking about the valuable combination of search engine marketing, AKA Google AdWords, and Programmatic Media, AKA Targeted display, video and CTV ads. I’d like to start this month’s webinar with a quick story from my past. When I first started my career in advertising sales, it wasn’t in the glamorous world of radio or TV. I didn’t sell newspaper or outdoor. No. I was a yellow pages rep. And as unglamorous as it was, I was proud of it. In their day, yellow pages were an absolutely vital part of an advertiser’s marketing mix. Still, there were occasions when advertisers asked me to cancel their ads, often because they misunderstood the role that yellow pages played. I remember calling on an attorney one year, and he told me that because he had just signed up for a huge television promotion, he wouldn’t be needing his half page ad in the yellow pages. Knowing that would be a huge mistake, I convinced him to give his ad one more year by offering to place a call tracking number in his ad in order to prove that it was generating phone calls. A few months later, when the book came out and his commercials were running, we checked the numbers. He was getting dozens of calls each month – more than he expected and more than enough to warrant the investment in the book. And while I would have loved to have taken credit for all those calls, I think you and I both know where those calls came from. Still, there’s more to this story. You see, his half page ad was on the bottom half of the page, meaning a different attorney’s ad was right above his. It just so happened that this other attorney also had a call tracking number that was… get this… receiving less than half the amount of calls of my guy’s ad. And it’s not like their ads were all that different, nor was there anything particularly special about either of them. The only difference that I could see, was that my guy was running television commercials. You’ve probably already figured out where I’m going with this. My guy created awareness and branding that the top-of-the-page attorney didn’t. So, when prospects saw his TV commercial, they went to the yellow pages looking specifically for my guy by name. Either that, or when prospects opened the yellow pages to find an attorney, they recognized my guy from his presence on television. Clearly the yellow pages didn’t generate those calls, but it did capture them at the time of purchase. What would have happened to my guy if he had canceled his yellow pages? Have you ever gone looking for an advertiser, struggled to find them, and then chosen one of their competitors because it was more convenient? I can’t say for sure that’s what would have happened, but I can tell you one more quick story about an advertiser who took advantage of his competitor’s failure to leverage a legacy media campaign with a solid yellow pages presence. In this story, Advertiser number one ran a ton of outdoor billiboards and did not advertise in the yellow pages. Advertiser number two ran a big yellow pages ad and had the best year his business had ever had – because he was capturing the leads that advertiser number one was driving to the yellow pages and missing out on. I’ve never forgotten those stories and they have both informed many of the campaigns I’ve recommended over the years. Both of these stories exemplify the value of both creative media and directional media. If you’re not familiar with those terms, real quick… creative media creates awareness or creates a need. When you see a furniture store advertising their Labor Day sale for example, it creates an awareness of the brand and, in a perfect world, creates the need for a new fridge you didn’t even know you wanted. Most legacy media, digital media and social media fall into this category. Directional media starts with the consumer having a need (like a broken fridge) and then looking for a place to buy it. Back in the day, that was yellow pages. Today, that’s search engines, most often Google. The dynamic between directional media and creative media still exists, very much like it did when I convinced my attorney that, despite his investment in television, he still needed his ad in the yellow pages. They both play a vital role in the purchase cycle. It really comes down to this. Even though media has changed, the purchase funnel really hasn’t. Brands that create awareness and need for their product are often responsible for getting prospects into the purchase funnel to begin with. This is usually accomplished with campaigns that include lots of reach and frequency. Traditional media like radio, TV and outdoor are ideal for this, along with non-targeted programmatic media, and of course, social media. (I know I’ve made some questionable Instagram purchases for things I definitely didn’t need.) Later, when an interest is created, the prospect is considering the product or has shown some interest in the product – maybe something like reading articles about the product or even visiting real life locations that sell the products, targeted programmatic media can really shine by placing ads in front of this person as they surf the web or watch connected TV. Social media, both organic and paid, play a big part here as well. When the prospect has finally decided they want what the advertiser is selling, that’s when search comes in. 68 percent of consumers turn to Google for information when shopping for a specific product. (Source: drip.com) And of course, loyalty is created by getting consumers to become social media followers and by retargeting them with programmatic media. Here’s what that story doesn’t tell us. When a solid creative media plan is in place, prospects often search for the product or brand by name. And anyone who has ever run a Google AdWords campaign knows that brand searches are often a great deal less expensive than product and service-related keywords. And in fact, most of the time, the brand ranks very well organically for their own name and may not even need to pay for those clicks at all. In preparation for this webinar, I interviewed several agencies about their experience combining SEM and programmatic media, and the one consistent thing I heard across the board was that when programmatic media is added to an SEM campaign, brand searches go up significantly. And that, is great news for advertisers because brand searches mean really inexpensive or often free traffic. Speaking of inexpensive, Let’s compare the investments in SEM and programmatic media. In the world of Google SEM, the cost per click is determined by the market and the most valuable keywords can be expensive. Here are the estimated costs per click for home loans, mortgages and refinance for mid to top of the page ranking. Worth every penny if the advertiser has a quality website and can convert even a small percentage of those clicks into leads. Still, even a good click through rate is around 6 to 8% meaning that over 90% of the people googling those keywords are not going to click on the ad. And there’s pretty much no branding value in a text ad. Do you remember the google ads you didn’t click?! As one of my interviewees told me, “Even when you’re winning at SEM, you’re still losing.” Meanwhile, in a programmatic bidding environment, the price of an ad is mostly related to the publisher where it is placed, not the keywords used to build the target audience. Sure, there is a cost for data and some audience segments may cost more than others, but there’s not a huge difference in the mortgage audience and the restaurant audience. So cost is based on the CPM or cost per thousand impressions. Display ads can run anywhere from $3 to $10 CPMs, meaning the ads themselves cost less than a penny apiece. Video ads can run around 2 and a half cents, and CTV ads might cost a nickel apiece. And while some will argue that the click through rate of a display ad campaign is poor - .1% is an average CTR for display campaigns. Retargeting, video, and social display do better than .1%, and connected TV’s CTR is 0% (because they can’t even be clicked.) But there’s BRANDING value to every one of these ads that SEM simply doesn’t’ have. That’s why I say that programmatic ads that aren’t clicked, still work. Unlike text ads on Google, display and video include imagery and logos that impact awareness and brand recall. We can Look to traditional media for evidence of this. Legacy media can’t be clicked… but that doesn’t keep McDonalds from being the number one seller of hamburgers in the world. SEM also has its limitations. An advertiser can only reach those directional media prospects that are actively looking for them. That number is finite and often, advertisers come to realize they can only invest so much into SEM. Certainly, the advertiser can add more keywords to their campaign, but eventually, it will cap. Meanwhile, with all the different tactics and ad creatives available, advertisers have a nearly endless well of prospects that they can target with programmatic media. Here is just one example of an Addressable Geo-Fencing audience targeting “Young Consumers in the Market for a Mortgage” Why is this audience larger than the SEM audience? Think back to the purchase funnel. There’s a reason it’s shaped like a funnel. There are more prospects at the top. And if this audience isn’t large enough, look what happens when we add more data segments to the mix. We’re now looking at over 150,000 homes where the residents are in market for a mortgage or home equity loan. In this next part of the webinar, I’d like to share the point of view that has convinced more SEM advertisers to consider programmatic than anything I’ve already described. I’m talking about simple time on site. Here’s what I mean. The average person spends about 11 minutes a day on the website google.com. eleven minutes. Do you spend more than 11 minutes a day on the internet? The average person spends over 8 hours a day with digital media. That includes surfing the web, hanging out on social media, watching videos and CTV, and so on. So to the advertiser who says that they don’t need programmatic media because they have a great SEM campaign, I say, “great! For eleven minutes a day, you’re all set. But what about the other 8 hours a day that your prospects are online? Do you want to completely miss out on that?” The final benefit that comes from running both SEM and programmatic media is the ability to compare and contrast results, to optimize and move budgets around until you really get the campaign singing. Ideally, your SEM and your programmatic media are being run by the same company so that you can have these conversations. It’s why Simpli.fi rolled out SEM management this year. Consolidating under one roof minimizes the number of people involved and puts your billing all in one place and everyone loves that. As for Simpli.fi’s SEM management, one of my interviewees mentioned how happy they were with the competitive fees and how they like leveraging Simpli.fi’s established customer service. They know their SEM rep by name and aren’t dealing with someone new every week. Lastly, I’d like to share this excerpt from The Simpli.fi Webinar Series. The speaker is Jorge Cordova, Senior Vice President of Paid Media at Zeno Group. In this clip, Jorge describes what often happens when an advertiser chooses to run SEM without targeted ads. Jorge Cordova: We were working with a larger fitness brand and the CFO got, and it’s a short story, CFO got involved and said, “Why are we spending so much money on programmatic display if all the money is coming in from search and social, and this is where the leads are coming in,” and he said, “Turn it off.” And we were like, “We highly recommend not doing that because we’re going to see a dip and this is what we’re doing.” We had geo-fence campaigns, we had conquesting campaigns, we had remarketing, we had prospect, we did the whole debut and so he saw it as a waste and we said, okay, and so we had to turn it off. And for this we were at a very aggressive cost per lead campaign and we needed about a 100 leads a day and so we turned it off and said, okay, we’re going to turn it off, we’re going to let it go for a little bit. So that was again, high funnel, all the prospecting pieces, all of the remarketing was off and we saw leads dip within I believe it was four to five days of 31% immediately and we were like, hey, it’s proving out not the right way that we want to do it, cost per leads were going higher, we were pushing all the search and social as much as we can but we weren’t feeding it, right? We weren’t feeding and we weren’t continuing that conversation with a prospect that doesn’t know about the brand and they saw us a week ago and now we’re remarketing to them and we’re hitting them up on social, but if you take away the top part of the funnel, we have to pay a lot more for it, so we saw a big decrease. It took us a couple of weeks to get back to where our normal cost per lead plus lead volume was, took about 30 something days because we literally shut off the faucet and just kept churning through this group. So it’s one of those exercises that I always talk about, I bring out with me every single time I talk about programmatic and how important it is to that conversation. And Justin you said it’s like that user journey, all that we’re doing is kind of supporting that user journey and just nudging people along because there’s so much noise out there that right after this call I’m probably going to have to jump to another meeting and now my mindset’s changed and I forget about it. I need that reminder to bring me back to whatever I was thinking about before and that’s where that programmatic piece, number one, it’s supports feeding the funnel, number one, but then also kind of pushing them through. So that was one of those things where I tell prospective clients, current clients, the people that are not thinking about programmatic, I’m like, hey, how are you going to think about something and then go buy it without kind of looking at it or reading about it. That was so good, maybe I should have started with that! Well, I hope by now you’ll agree that combining SEM and programmatic media drives performance. And with that, I’ll let you get back to work. This webinar and our full library of webinars are available on-demand at simpli.fi/webinars. Be sure to follow us on social media so you don’t miss out on new content. If you have questions about Simpli.fi’s offerings, please reach out to your Simpli.fi account manager or send an email to hi@simpli.fi. I’m David McBee. Be awesome and we’ll see you next time.