Short and Sensible guide to… What is Programmatic in eCommerce?

by Chloë Thomas

programmaticProgrammatic seems to be 2015’s “big data”. A phrase invented to define a category of things that most of us already understand, but don’t realise has been renamed, so we assume it’s something we can’t do / don’t know about it!

Therefore I thought I should put together a very simple, short guide to what is actually is.

Starting with the technical definition of “Programmatic”

Dictionary says “of the nature of or according to a programme, schedule or method –eg “a programmatic approach to change”

I would define ‘programmatic ecommerce’ as:

A piece of software that uses an algorithm and lots of interesting data to improve performance

The performance improvement usually means:

  • Increase ROI by buying better data
  • Increase ROI by buying data for less
  • Increase conversion rate
  • Make savings on human time

Places where we’ve all been using programmatic for a long time

There are many things we’ve been using for years that can be considered to be programmatic:

  • The Google search engine itself takes tons of useful data (captured in the Google index by the spiders) and uses an algorithm to provide us all with great search results
  • The Adwords Auction is the algorithm google uses to work out which ad should show where in the search results (and how much we should pay for the click). This is tons of data being fed through an algorithm to provide a better result.
  • Searchandising (services provided by Attraqt, SLI Systems, Nosto etc and the whole Amazon system) these take past user behaviour add it to the product database, syphon it all through an algorithm to automatically working out what product someone should see on your website to maximise their conversion and / or AOV.
  • The Google Adsense network analyses your ads and keywords (and other decisions) to work out what ads to put on any of the adsense network websites. (aka the Display network)

So it’s everywhere, in tools we use all day long.

The reason it’s now getting so much press is because the technology that powers programmatic things is becoming easier and cheaper to build. So there are now coders specialising in it, and it is being applied to ever more diverse problems.

Some of the new and diverse places I’ve seen a programmatic approach being used include:

Phrasee

A new email marketing business (with fantastic pedigree) who have built a system that will analyse past email performance to generate subject line ideas for testing.

Stitch Fix

Who have used programmatic approach to automate personal styling for their customers.

Media buying

We’re used to the algorithmic approach to media buying with Google Display Network. But this approach is now also being taken to TV advertising and print too. As well as postal mailings.

Google’s Dynamic Remarketing

Takes searchendising off the website into the Google Display Network.

So… don’t be scared by programmatic – it’s everywhere! And you already know all about it, just not under this name.

What’s your favourite use of programmatic?