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Written on 07/18/16 10:00 PM

 

What did Facebook change on their Newsfeed?

Facebook is getting back to basics. Recently, the social media giant announced that it is tweaking its algorithm so that users see less content and ads shared by publishers and brands, and more posts from friends and family. This core principle is why Facebook got into the social media ecosystem in the first place. Publishers and advertisers are anxiously awaiting what it will mean for them. RPM is predicting that publishers will be the most affected as many have become reliant on Facebook as a major distribution channel.

Why did they make this change to their algorithm?

Facebook is constantly changing their algorithms and oftentimes they do not announce these tweaks to advertisers, publishers, or the public.

On the Facebook business marketing page, the company explains why it made these changes. “One of the main reasons people come to Facebook is to see what’s happening in their News Feeds. Our goal with News Feed has always been to show people the things they want to see. When people see content that’s relevant to them, they’re more likely to be engaged with News Feed, including stories from businesses.

“That’s why we often look to people on Facebook to tell us how we can improve. As part of an ongoing survey, we asked hundreds of thousands of people how they feel about the content in their News Feeds. People told us they wanted to see more stories from friends and pages they care about, and less promotional content.”

Without people constantly checking their Newsfeed because they aren’t getting what they want, Facebook doesn’t have an audience. And if Facebook doesn’t have an audience, it doesn’t have a product to sell. Keeping people happy is priority #1.

Below is a rough calculation of how the Newsfeed algorithm works:

What will change for consumers and businesses?

Consumers will start to see more posts from friends and family instead of news or pieces of content. Facebook is returning to its core principle of connecting the entire world, and if you can’t see posts from your friends and family, how can you make meaningful connections?

Facebook is also making significant investments to Business Pages. They are building in more features, enhancements, and customization. These changes will improve the consumer’s experience with individual businesses and make them more meaningful and robust. Facebook Business Pages have become an extension of companies’ websites and are often a substitute for having a site.

What will this mean for advertisers?

Many news outlets and advertising industry trades are saying that these changes will not affect PAID ads; those will remain a part of the News Feed. Where this will be most prevalent is the organic reach to people who are fans of a brand or publisher page. Facebook has stated that all pages that post promotional content will see their organic distribution fall significantly over time. Paid ads will now become even more important to both advertisers and publishers. In order to ensure reach and distribution, all posts must be boosted and all ads must have significant budgets.

Stay tuned for more updates from Facebook, you can be sure more tweaks and algorithm changes are coming down the line!

 

What is Programmatic Advertising? Programmatic is the automation of buying and selling digital advertising inventory, including real-time bidding (RTB), that has seen tremendous growth over the past five years. It has started to transform how we buy and sell ad inventory. While RTB has historically been associated with remnant inventory, this technology is now increasingly being applied to a wider range of inventory. There has been confusion in the marketplace over terminology with a number of terms being used interchangeably such as: “programmatic,” “programmatic direct,” “programmatic premium,” “programmatic guaranteed,” and “automation”. Many definitions abound and they vary from site to site and from partner to partner. Additionally, marketers are bombarded with a lot of acronyms when referring to Programmatic, for example RTB, DSP, DMP, SSP, and many more. We will attempt to decipher and provide definitions for many of these key terms.

In simplistic terms, another word for Programmatic is Audience Buying because that this is essentially what advertisers are purchasing:

instead of placements, they are purchasing Audiences regardless of where they may be browsing or surfing. The inventory is bought using algorithms, AI (artificial intelligence) and automated trading/bidding systems. At the core of Programmatic is the Ad Exchanges; they aggregate digital ad inventory from millions of sites and operate very much like a Stock Exchange. We’ll explore that in a later section.

The below graphic gives on overview of how programmatic is structured from the media agency side as well as the publisher side. Programmatic sits in the middle and makes decisions in real time as to how the inventory is bought and sold.

Why do we need Programmatic?

With programmatic buying, advertisers have access to vast amounts of inventory, data, and targeting options. According to eMarketer, by 2017 83% of all display ad buys will be purchased programmatically. Magna Global predicts that US programmatic ad spending will hit $17 Billion by 2017.

Programmatic buying allows advertisers to target audiences in a multitude of different ways, below are the main options for targeting display, mobile or video ads:

In the future, most buying will be done via programmatic; not only for display ads but also for video, TV, audio, social and native. Buying in this manner actually saves money because of the efficiencies brought about by automation. However, costs can quickly escalate the more vendors and technology companies that enter into the mix. Each will get a cut of costs which can quickly add up.

The advantages are:

• Economic Efficiency

• Targeting

• Organizational Efficiency

• Measurement

• Transparency

 

How does it work?

At the core of Programmatic is the Ad Exchange. Similar to the stock market, ad inventory on the Exchange is placed into a bid auction system where advertisers can bid on ads based on location, demographics, psychographics and a range of other criteria. The inventory options that are available go far beyond display ads including: Video, Mobile, Native, Social and Audio.

The graphic below demonstrates how all of these platforms and systems work together in a complex ecosystem that operates within milliseconds of an ad being delivered to a users screen. Both agencies and publishers are feeding in buys and inventory on either side. In the middle stands a system of Trading Desks (owned by agency holding companies), DSP’s (Demand Side Platforms), Ad Exchanges, Data Providers and Management Platforms (1st party and 3rd party), and SSP’s (Supply Side Platforms).

 

Definitions:

Trading Desk: large agency holding companies that have their own programmatic buyers that purchase directly from the Exchanges for their list of clients.

DSP (Demand Side Platform): enables advertisers to purchase ad inventory via RTB exchanges (examples are MediaMath, Turn, Invite Media, The Trade Desk)

Ad Exchange: a digital marketplace that enables advertisers and publishers to buy and sell advertising space, often through real-time auctions (Doubleclick, AppNexus, OpenX)

SSP (Supply Side Platform): a technology platform that enables web publishers to manage their advertising space inventory, fill it with ads, and receive revenue

DMP (Data Management Platform): provides the function of data collection, translation, classification, indexing and storage. In simple terms the ‘plumbing’ part of data-driven marketing online. (Oracle BlueKai, Neustar, Aggregate Knowledge)

Data Usage:

Programmatic buying allows the inclusion of many data sources to inform targeting and optimization decisions. It allows the buyer to show one ad impression to one anonymous viewer in one context. In the current programmatic landscape, the most common data used is leveraged on the buy side. Buyers layer both third-party data, as well as advertiser first-party data, onto campaigns. In addition, some publishers offer their first-party data.

Protecting against Fraud

Industry research has shown that an average of 55% of all digital display ads are not seen at all. This could be due to many factors: ad is below-the-fold and the user did not see it, fraudulent non-human traffic that comes through from bots or other computer programs.

Moving toward Viewability is RPM’s #1 priority moving forward and we are setting up systems to ensure that all of our advertisers are getting the highest percent of viewable impressions. Verification companies including 3rd party ad servers have viewability measurement built in to measure whether an ad is viewable or not on desktops or PCs. Mobile measurement will follow shortly but is not ready for primetime.

More and more high quality inventory is being made available programmatically like private marketplaces and publisher direct. By accessing this inventory, we can improve the quality of our ad placements and also improve viewability.

Programmatic Vendors

As you can see by the below Lumascape chart, there are an enormous number of players in the Ad Tech space. More come to market every day and also get acquired by other companies or change business models. Keeping up with the rate of change is very challenging, however, RPM keeps abreast of these changes by attending industry events, researching technologies and scheduling regular vendor meetings.

How is it Measured?

Programmatic buying can be purchased in different ways depending on campaigns goals. Below are the most common goal and cost structures:

 

• Awareness: CPM or Cost-per-Thousand (used most frequently)

• Performance: CTR (click-through rate), CPA (cost-per-acquisition), CPL (cost-per-lead), ROI

• Viewability metrics by the 3MS (MRC, IAB, ANA and 4A’s) have established the following measurement standards to assess whether an ad is viewable:

• Display: 50% of ad pixels must be viewable on desktop/PC for 1 continuous second

• Video: 50% of ad pixels must be viewable on desktop/PC for 2 continuous seconds

• Mobile: Viewable Impressions guidelines are currently being decided upon

Recommendation

Due to the enormous amount of inventory and opportunities Programmatic has to offer, it is an area for growth and exploration for all PNG properties. RPM is already working with Programmatic partners and has begun testing these vendors to determine reliability, volume and performance. We will continue to test new DSP partners to determine which ones fit our needs and comply with our quality standards. RPM is researching future opportunities for establishing its own trading desk using the latest technology with 100% transparency while also ensuring the highest quality inventory.

Next Steps

• Viewability Approach

• Determine and test new Programmatic partners

• Share goals and objectives with new partner

• Implementation

• Shared Analytics

• Evaluation