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Scope Of Programmatic Buying In Healthcare Marketing

Programmatic buying is the future of media buyingData management programs enabled with technology has completely changed the way marketers buy media today. More and more companies are embracing technologies that facilitate media transactions in real-time and at a granular level. Programmatic Buying ecosystem is at the core of this revolution and has triggered a paradigm shift from a conventional non-personalized mass media buying to targeted ad placements based on user behavior.

Programmatic buying means sale and purchase of media in real time in an automated manner through software and algorithms. Automation is real time and accurate to such extent that it not only saves time but also improves efficiency in terms of ROIs and reaching target audience with laser-guided precision.

While Programmatic buying has not yet taken the healthcare domain by storm, buzz around the topic has started getting louder in recent times. Media buying in healthcare quintessentially has been done in a traditional manner through sales teams approaching publishers either offline or online and then go through a long process RFQs, negotiations, preparing artworks and specs modifications, purchase indenting, vendor on-boarding and eventually releasing payment. And all this convoluted process has to go through before the ad is even published. Hence there is a lag between purchase intent and actual media release. And that is what Programmatic is good at solving.

So how does Programmatic buying works and why hasn’t it caught the imaginations of healthcare marketer yet? Let us dig into details.

How Programmatic Buying Works? 

Image showing components of Programmatic Buying ecosystemFirst, let us understand some commonly used terms used in the Programmatic Buying world and also how the Programmatic ecosystem actually works

Step 1:

When a user clicks on a web page that has an advertising space on it, the publisher of the web page sends a cookie to user’s web browser (Chrome, Internet Explorer, Bing… whichever).

What is Cookie: Cookie, in simple terms, is a small data file that is sent from publisher’s web server to user’s web browser which serves to establish user’s identity

Step 2:

In case an inventory (advertising space on a web page) is available for sale, it triggers a request from publisher’s Ad Server to their Supply Side Platform (SSP) to fill the Ad slot

Definition of SSP: You may think of Supply Side Platforms (SSPs) like a library or storehouse of Ad Inventories available for placing your advertisement. It is a platform that connects sellers (web sites, blogs, directories etc.) with buyers or advertisers who compete against each other for available Ad space.

Some of the well-known supply side platforms are AppNexus, PubMatic, AOL or Google’s DoubleClick Ad Exchange.

Step 3:

SSP then issues a bid request to Demand Side Platform (DSP). This bid request contains information about the user who is about to see the Ad like her demographic profile, browsing history, etc. This information helps DSPs to make an informed decision about a user before making a bid.

What is a DSP? : Demand Side Platform or DSP, as they are referred in programmatic world, is a doorway to purchase advertising space in automated fashion. Think of DSPs as advertiser’s gatekeepers who matches inventories with buyer’s marketing objectives. DSPs make bidding decision on behalf of a buyer after evaluating parameters like publisher’s profile, ad placement, floor price of available impression, etc.).

Some of better known DSPs include DoubleClick Bid Manager by Google, AdMission, MediaMath etc.

Step 4:

Based on algorithm, DSPs assesses inventories to determine how valuable the impression is and whether to participate in the auction on behalf of an advertiser. If DSP decides to participate in bid auction, it sends a bid response back to SSP

Step 5:

SSP gathers all bid responses and picks a winner based on second-price auction, that means, the one who bids slightly above the second highest bidder.

Step 6:

SSP notifies winning DSP and the DSP in turn sends Ad serving code to SSP. Finally, SSP passes on Ad serving code to user’s browser and renders the Ad. The Ad is then served along with other content on a web page.

And all these steps take place at a lightning speed at the back end while the page loads! See the graphic below showing the inter-relation between stakeholders involved in the Programmatic Buying Ecosystem

Components of Programmatic Buying- The Programmatic Ecosystem

Types of Programmatic Buying

Types of Programmatic buyingProgrammatic Buying, as we know now, is automated buying of ad space on a web page. There are fundamentally 2 types of programmatic buying depending upon whether the ad space or inventory is bought through auction (Auction based) or by paying a fixed rate to the publisher (fixed price).

Auction based:

Open auction: This is based on real-time auction based bidding. Most prevalent of all programmatic buying

Invitation-only auction: This too is auction-based but bidding is limited to select advertisers selected by a publisher. More premium inventory sold at a higher price. Some publishers give ‘first look’ advantage to some advertisers before ad space is visible to others

Fixed priced:

Unreserved fixed rate: Price is prefixed but no ad space is set aside in advance

Automated guaranteed or Programmatic premium: This is an automated process of buying guaranteed ad space that doesn’t involve auction, where the price is prefixed and impressions are guaranteed. Generally this type is most premium of all types.

Scope of Programmatic Buying in Healthcare

Image depicting scope of Programmatic buying in healthcareProgrammatic marketing has not taken healthcare industry by storm yet by any stretch of imagination, especially so in India. Although this marketing phenomenon is discussed in marketing conferences and agency boardrooms but its role is still restricted to lexicons and concept rather than on actual spending of marketing dollars. Out of the global spending of USD 22 Bn on Programmatic buying in 2015, spending in India was a mere USD 25 M which makes it just above 1% share (Source: Media Global report cited in eMarketer)

By 2018, it’s projected that the healthcare industry will spend $2.2 billion on digital media. With roughly 40% of all media buys being programmatic, healthcare marketers have a great opportunity on their hands. Not only is programmatic the new buzzword, but it is estimated that 70% of all media buys will be programmatic in 2016. That’s significant growth over two years.

Healthcare media buying in India is still predominantly done through traditional spray-and-pray, at best loosely targeted media campaigns involving humans (read- sales team) that negotiates with publishers or media agencies to buy ad space or inventory. Programmatic buying on the other hand allows precision and previously not thought-of granularity to reach target customers with better engagement and lower costs. Let me present some real life scenarios to bring home the impact of Programmatic Buying in healthcare setting.

Imagine you are visiting nearby pharmacy store to buy sugar control medication after doing some online search about medicines dosage and side effects. Suddenly your smartphone buzzes. Curious to know, you check your inbox and find email message inviting you take a free diabetes check-up at a Clinic just a block away from where you are.

Almost scary, isn’t it! Well, this is what Programmatic can do. It reaches your predefined customers or audience at the right moment with a right message. And all this happens in milliseconds in automated fashion, thanks to footprints, or say Cookies, you left while searching web.

Programmatic buying has changed the approach from rendering same advertising message to millions of customers to creating unique message for individual customers based on her need at that moment of time. A proof of concept for this could be how health insurance could be bought using Programmatic platform.

While you were renewing health insurance policy online for your parents, an ad banner flashed across your laptop screen proclaiming to offer better coverage with add-ons at lesser premium. The message is so timely and apt that you could not resist but clicking the ad. It feels that ‘someone’ is following your foot trails online. It turns out that there is indeed ‘someone’ that follow users to deliver messages that are very apt and timely.

Data gathering at forefront of Programmatic advertisingImage depicting how data gathering and analysis is a key component of programmatic ecosystem

In a way, data analytics is the lifeblood of automated buying. Although enormous amount of data is gathered in healthcare industry, for instance a hospital, hardly any of it is used effectively to build effective data driven strategy.

First party data sources in hospitals like patient registration kiosk of Hospital Information System, CRMs or a Website can be used to capture customer intent by placing a cookie on customer’s browser which can then follow and track a customer’s online journey and place meaningful and compelling messages to drive engagement with patients or customers. This primary data along with a second-party data from affiliates or online subscription agencies and third-party data bought from outside data aggregators like telecom companies, other CRMs etc., is clustered to form homogenous group of audiences having similar traits like age, web browsing history, online purchases, content sharing on social media, medical content consumed, etc.

Let us conjure up a probable scenario for a hospital that is about to launch Diabetes Management Program and wants to reach targeted audience using their primary data base gathered over past years. Data points like e-mail address and contact numbers of patients undergoing care under endocrinologist would become a good audience pool to run targeted messages using GSP (Gmail Sponsored Promotions) or RLSA (Remarketing Lists for Search Ads) campaigns. While a GSP would enable messages to be delivered at prospective patient’s Gmail inbox, the RLSA campaign would ensure that message is rendered on user’s SERPs wherever they go online.

The best part of programmatic advertising is that it can integrate all media delivery options and deliver message to right audiences wherever they live online be it video, search ads, mobile, display or social media. Such media optimization gets captive and engaged audience to marketers resulting in maximum value out of marketing dollar spent.

Say you want to target women in their early 40s living in North Bangalore for promoting breast cancer screening.  Programmatic-way of doing this is deliver your message to in-market audience directly by capturing basic patient’s intent and then tracking their online behavior. For instance, say a 45-year old women who visited your Oncology web page and is searching information online on “prevention of breast cancer”.

Programmatic Buying allows you to cater to your specific target audience who is at the far end of buyer’s journey and has higher propensity of buying if your message touches their cord. Programmatic Buying helps tracking investment or in other words makes returns attributable. Advertising has become a niche endeavor and Programmatic Buying has come as a potent tool in marketers purpose to unravel key steps to niche marketing.

Challenges of Programmatic buying in healthcare

Programmatic Buying comes with its share of challenges and unethical practices that digital marketers have to stand guard against. Such bad practices permeate across the Programmatic ecosystem and are omnipresent across industries including healthcare.

In a highly regulated healthcare sector, these challenges are even more evident. So let me address some burning issues plaguing the Programmatic Buying in healthcare

  1. Restrictions on retargeting: Hospital industry has been slow to adapt programmatic buying because medical ethics restrict any form of advertising to patients, even the audience retargeting using cookies
  2. Ad misplacement: Ad placement while trying to reach a prospect, say a Physician in a non-clinical environment like a Game Center or Expedia Travel site may actually dilute importance of brand and message
  3. Control: As previously mentioned, Demand Side Platforms are aggregators of inventory and make them available for Advertisers. However, in healthcare industry, not many reputed medical publishers like PubMed, WebMD, The Lancet, NEJM etc. may renounce control over their inventory to let open ad ecosystem like Programmatic take over. That is the reason why most medical publishers still prefer reserved, non-auction based of programmatic buying like either Programmatic Direct.
  4. Higher costs: Due to publisher’s reluctance towards open-auction bidding in healthcare for reasons stated above, cost per impression (CPM) is higher than in other industries like retail and travel.
  5. Inventory scale: Since ad spaces on medical sites is limited and finite, mostly they are bought via direct 1-to-1 Publisher-Advertiser model leading to inflated CPMs and suboptimal performance parameters (read ROI)
  6. Stale-on-Sale: General impression is that a media bought through Programmatic model is often a leftover, remnant inventory. This is not entirely untrue in healthcare either. Media space buying in healthcare predominantly is either through direct buyout involving humans or direct buyout involving automation, called the Programmatic Direct. Hence, what is left is a less coveted, tier-2 inventory. Although buying this inventory may help derive engagement at much lower cost.
  7. Private Healthcare Ad Exchanges: In view of medical data security, misplacements and privacy issues in healthcare, some proponents of exclusive healthcare ad exchanges have emerged. In fact there are already some media buying platforms in healthcare like MM&M, Compas that allow automated buying to healthcare publishers. However, given that transparency and neutrality of open buying platform would be compromised with such agencies, there is little incentive for advertisers to work with such private ad exchanges. Besides, scale and inventory available with such private exchanges is also limited compared to full-service media agencies.

Aside these challenges that are specific to healthcare industry, Programmatic Buying has some inherent issues that are pervasive across industries. Such as some outlined below:

  1. Non-human traffic: Non-human traffic or the NHT as is commonly referred in Programmatic world is the most prevalent form of fraud whereby programs imitate desired online behavior and register false matrices like impressions, views or clicks. Bots pretend to be actual humans while actually they are piece of malware that inflates the performance matrices by masquerading as organic activity. Common examples of this is paid ‘likes’ or ‘+1s’ on social media.
  2. Viewability: Viewability is the probability of an ad to be seen. Many times a large proportion of impressions that advertisers pay for goes unseen either due to below-the-fold placement or user might scroll a page too quickly to see the ad.
  3. Ad blocking: Today’s sophisticated programs allow users to remove advertising while browsing the internet or using apps. Most publishers and professional bloggers depend on advertising as a main source of their revenue. And with ad blocking in place, a blogger would lose incentive to create free-to-consume content unless alternate stream of revenue is available to them. Likewise publisher websites lose interest since their revenue model based on content-for-advertising is compromised

Way forward

Chart showing Worldwide spending on Programmatic buying platformMagna Global has projected that worldwide programmatic ad spending will reach $32.6 billion by 2017, with the United States accounting for 50 percent of that. See below the trends of spending in Programmatic Buying over the years and how even countries outside United States have started spending more in Programmatic platforms.

Automation in media buying has upended the way today’s digital marketers deliver messages to customers. The evolution of Programmatic Buying has been at such a breakneck speed in past decade that mass media buying, channel advertising and even search engine optimization have become passé.

Within the Asia Pacific region, Japan, China and Australia hold lion’s share in Programmatic spending. In India, Programmatic spending in year 2015 was only USD 25 M.

Chart showing Programmatic spends by country

However, the Programmatic penetration, which is percentage of marketing spends on Programmatic buying compared to overall marketing spends is 20% in India and higher than in China and Singapore. See the below snippet from Magna Global report:

Programmatic buying penetration by country

Reason behind India’s slow pace to catch up with programmatic is because of variable data bandwidth across regions in India and also low ad spend. The per capita ad spends in India is just 6 USD which is even lesser than in Indonesia’s USD 26.

That being said, according to Magna Global’s Programmatic Forecast, India would see 60% annual growth in Programmatic Buying in coming years, higher than its APAC counterparts like Australia, Japan and China as depicted in the chart below.

Chart showing country wide growth in marketing spends on Programmatic buying

One core reason for this transformation has been the usage of data. Data has already been around us but its effective capturing and usage of technology to transform datasets into real-time buying, ad placement and campaign optimization has really made the difference. Sectors like healthcare is slow to adapt this change due to regulations and privacy issues, as mentioned earlier.

Even social media juggernaut like Facebook is focusing on healthcare to drive engagement on their site by creating online communities based on health interest or ailments. Such online communities gives marketers opportunities to create target audiences and reach out to them with precise messages using retargeting campaigns.

Winding up:

Programmatic buying has been a prominent inclusion in marketer’s quiver since last decade. Healthcare industry has been slow to wake up to this phenomenon due to industry-specific challenges. However, adoption of data, involvement of social media companies and proliferation of healthcare specific ad networks to manage automated buying in healthcare would only mitigate these challenges.

Healthcare sector including hospitals and pharmaceutical companies would be wise to consider programmatic buying as part of a core marketing strategy and move from broad, segment-based marketing to specific fine-grained messages crafted to attract, nurture and convert potential customers or patients.


So what are your thoughts on the prospects of Programmatic Buying and its role in healthcare? Did I cover the essence of the topic through this blog or have missed some points? I would be glad to hear your views.

Please share your thoughts. I promise to acknowledge!

The post Scope Of Programmatic Buying In Healthcare Marketing appeared first on MedTreatServe.



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Scope Of Programmatic Buying In Healthcare Marketing

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