What You Need to Know About Endemic and Programmatic Advertising

by Grant Cassiday
November 30, 2021
Ad placement is driven by customer data, rather than the buyer

Ad placement is driven by customer data, rather than the buyer

This post was originally published in July 2020. It has been edited to reflect industry updates.

When it comes to planning the use of digital media to reach farmers, specifically display, marketers are now viewing ad placement the way they view the farmer – multifaceted. Where we used to assume display ads were best suited to appear on websites specific to the ag industry, the rise of Big Data and analytics now enable us to reach customers wherever they are.

For example, you might place display ads for ag equipment on the site of an ag equipment publisher. This is endemic advertising, meaning that the publisher or site itself is contextually aligned with the topic of your ad. But you might also see that ad on a seemingly unrelated site, such as a weather website. That’s not by accident. This approach, called programmatic, can be just as or even more successful.

In this blog, we break down the differences between endemic and programmatic advertising to help you see what goes into how you use display to reach your current and potential customers.

Endemic advertising has competition

When display advertising was first taking off, endemic ads were the only way we targeted online audiences. The assumption was that only people interested in a certain industry and its products, such as agriculture, would visit certain websites, so that was the best way to target them. We would reach them in the only place we could guarantee they were, so our ads were contextually relevant to boot. This guarantee of the right audience in the right environment enabled endemic publishers to charge a premium for direct buys with advertisers.

The introduction of programmatic advertising changed all that.

Programmatic is all about the targeting and optimization – finding the right person regardless of where they are on the internet and what kind of content they are consuming, getting them to take the action we want – whether it’s visiting the website or signing up for an email, and then looking for more people like that.

The premise related to the inventory is that audience targets are engaged with content relevant to them as people, even if it is not directly related to the advertising brand. This is why an equipment ad might show up on a weather site. Since programmatic partners aren’t tied to specific websites, they can find the audience for almost any business vertical based on data and algorithms that analyze their holistic online behaviors. Using the example above, at some point, the algorithm found that person interested in both ag equipment and weather. And because of the scale of inventory found across the entire internet, the cost per thousand impressions is a fraction of what endemic publishers are charging.

Beyond just inventory and pricing are the issues of technology, innovation and sophistication. Because of their roots in traditional media and premium audience targeting, many endemic publishers have not needed to become tech savvy to keep up. From this standpoint, programmatic vendors also have a leg up in terms of optimization capabilities and unique opportunities.

The world is an advertiser’s oyster in terms of programmatic targeting in that there is a first, second or third-party data segment available to target nearly any audience, from soccer moms to left-handed red headed Icelandic teens that listen to heavy metal. However, matching up data points across data providers and applying them to buys in real time bidding situations is not a perfect science. That’s why endemic sites still charge the premium they do for their guaranteed audience.

Programmatic buys come close to finding the right audience with initial targeting parameters, and then optimize over time to reach the exact niche audience. It is critical to help advertisers new to the programmatic space understand this targeting and optimization process.

There’s still unique value in endemic advertising

We wrote about the rise of programmatic advertising in 2017 when nearly three quarters of U.S. display advertising spend was directed through programmatic media, according to eMarketer, though a typical ag digital mix had much less. The latest eMarketer report, US Programmatic Digital Display Ad Spending, shows that number has risen to more than 89 percent.

Though programmatic advertising has emerged as the most efficient way to target customers, endemic sites are still the best place to align with relevant content. In this example, those that focus on agriculture are a place for brands to benefit from association with the media brand of the publisher that owns the website.

Endemic sites have also become a place where information from relevant brands is expected and even welcomed. Building a content experience for a brand in an endemic website–or a path to one–aligns with the audience expectation to find that type of content there.

The evolution of ag publishers: audience extension

Some endemic ag publishers are starting to put their best digital foot forward and are looking to bridge the gap between themselves and programmatic by offering audience extension products, sometimes marketed as “site retargeting.”

With audience extension, advertisers can reach a publisher’s core audience of readers on other sites they use. This execution, where the endemic audience is reached via programmatic inventory, requires endemic partners to have a relationship with a programmatic partner operating in the background. By sacrificing the onsite contextual alignment, costs fall in between the high costs of endemic site direct buys and the efficiency of programmatic, while still reaching that premium audience.

Audience extension is not to be confused with traditional “site retargeting,” which reaches those who have been to the advertiser’s site with an additional advertising impression accessed via inventory elsewhere on the web.

If you’re trying to determine whether endemic, programmatic or audience extension is the best approach for your business model and products, always start with testing. Our paid media team is happy to work with clients on the best way to make this achieve measurable results. You can reach us by contacting our Business Development Director Gino Tomaro at gtomaro@rkconnect.com.

Grant Cassiday
About the Author – Grant Cassiday

Executive Director, Paid Media. Grant has the ability to perfectly match the diverse needs of his accounts with appropriate media channels. Since joining R+K 12 years ago, Grant has been responsible for media plan development for Sandvik Mining and Construction, Caterpillar, Central Garden & Pet, DePaul University, and Aurora Health Care. Previously, he worked in-house at Allstate, and at Jordan, Tamraz , Caruso Advertising and Starcom MediaVest Group on clients including LaSalle Bank, Kraft Foods, McDonald’s, Kellogg’s, Lego and ComEd.

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