Programmatic advertising, like any business, requires trade-offs. A la the iron triangle, a project management principle postulating that a product can’t be simultaneously high-quality, cheap, and quick to produce, programmatic advertisers have to make strategic sacrifices.
A recent piece in Advertising Age used the iron triangle to illustrate the relationship among personalization, quality, and cost for a brand. Programmatic advertisers face a similar balancing act.
Programmatic allows marketers to target with unprecedented precision. For optimal results, marketers accompany that targeting with customized messages tailored for each audience segment.
But the more an advertiser focuses on personalization, the less it can focus on ad experience. Because there are more variations of each ad required, these personalized ads aren’t as complex and high quality as other types of creative.
Alternatively, brands can invest in a high-quality ad experience, but to do so, they sacrifice a degree of personalization because fewer ads means more generalized messaging. Marketers have to find a balance among the personalization of the message, the quality of the ad experience, and the cost of the required resources.
It’s the Programmatic Creative Triangle, and deciding which trade-off to make is the “trilemma.” For most marketers, sacrificing budget just isn’t an option, so let’s focus on the other two triangle points and the relationship between personalization and ad experience.
The Trade-Off: Personalization And Reasonable Costs, But Lower-Quality Experience
The most common example of this trade-off is retargeting. Retargeting strategies are generally very dynamic and customized based on a user’s prior behavior. They are often high value. In fact, the average click-through rate (CTR) for a retargeted ad is 10 times higher than the average CTR of a standard banner ad.
The better marketers are at segmenting their audiences, the better the results. When someone visits Amazon.com, puts a coffee mug in the cart but leaves before pulling the trigger, the goal of that retargeting campaign is to complete the transaction. “Following” the user around while he or she visits other sites or apps with a simple reminder of the “mug that got away” can be quite effective. The complexity of the creative isn’t as important as its specificity.
The effectiveness of these ads lies in their ability to be updated easily and frequently, but at a certain point, advanced personalization affects a marketer’s ability to ensure quality. These ads look formulaic, and they don’t work for all brands and objectives. And if an ad has typos or poor formatting, it won’t matter how precise the message is.
The Trade-Off: High-Quality Experience And Reasonable Costs, But Less Personalization
Then there are campaigns that project a little more heart or character. Perhaps it is more of an emotional sell or a more sophisticated message, but something about it requires an experience that is less rigid than the previous scenario.
Marketers should consider their objective as well as their brand ideals. If a campaign’s purpose is to build a long-term relationship with a user, the marketer may want to lean more into the experience. That doesn’t mean it needs to sacrifice personalization entirely. If it leans too far, it could end up sinking a lot of time and money into a single concept that isn’t universal or scalable. Proctor & Gamble recently announced its Facebook advertising delivered subpar results. That could be because its messaging was too general for its targeted approach. It may have sacrificed a required level of customization in exchange for higher ad quality and reasonable costs.
Creative management platforms (CMPs) are another type of tool for customizing programmatic creative. They afford fewer variations than dynamic creative optimization (DCO) platforms but better ad quality overall. Marketers sacrifice a degree and frequency of personalization for a higher-performing ad experience.
For example, if a car company concludes that its modern design is an important selling point to a majority of its customer base, it makes sense to invest in beautiful, high-quality creative and sacrifice some of that customization. That story just wouldn’t be properly told via a lower-quality ad.
Advertisers can’t have it all, but it is not quite an all-or-nothing proposition. Campaigns can have a reasonable extent of personalization and still provide a great experience. It’s a continuum that brands must explore. When they understand the pros and cons of the different programmatic creative approaches, the balancing act will feel less like a sacrifice and more like a purposeful marketing strategy.