Target – an expert in understanding the purchasing habits of consumers – rapidly is changing the way it buys display advertising from the online publishers that compete fiercely for its dollars.

"If we take the core mobile display/desktop display world, today we're probably bumping up against 50% of that being purchased using a programmatic methodology," Patrick Reiter, the firm's group manager/digital, told delegates at MediaPost's OMMA Programmatic Display conference held during New York's Internet Week.

This quantitative metric represents one demonstration of programmatic progress. A potentially more important indicator on this measure, however, concerns how the Minneapolis-based organisation consistently secures high-quality inventory.

And it is here that the Bullseye Exchange – a private hub for acquiring digital display ads constructed by Reiter's team – enters into play.

Like most ad exchanges, this marketplace pulls together the available inventory from various sources, and lets buyers sort these possible placements by:

category (e.g. sports, fashion and baby care);
demographic (e.g. women, Hispanic consumers, and so on);
channel (e.g. desktop or mobile);
"impact" (which, for Target, incorporates a rating of several rich media formats).

But while independent exchanges often represent hundreds (if not thousands) of outlets, Target's bespoke platform houses approximately 70 hand-picked media brands. "It's really about a way to programmatically connect Target to publishers," said Reiter. "It brings all that together in a single place that we can manage."

Many companies might regard such streamlining as a sufficient payoff. But Target – which has been actively innovating in areas from consumer privacy to event sponsorship and TV production – has considerably larger ambitions for its service. "Our goal is to create an ecosystem that allows us to make better decisions," Reiter reported.

The Bullseye Exchange supports this objective, he proposed, in four main ways:

Consistency
Accountability
Transparency
Brand safety

Consistency

Fulfilling the first of these programmatic tasks involved injecting greater rigor into Target's display advertising by repeatedly working with the publishers inside the Bullseye Exchange.

"That provides consistency," said Reiter. "We came out of this campaign world where we did a hundred campaigns a year, and on some level there was an amnesia that takes place: a campaign starts and ends, and, on the whole, you pick up from scratch again where you left off. And we felt like there was a loss there.

"What we saw was the promise of having consistency through inventory: the campaigns come and go, but the relationships with the publisher, the inventory and the data that's contained therein is consistent – and we can improve this over time."

An equivalent degree of constancy has been essential when promoting the Bullseye Exchange within the company itself, he added. "As my team built products for the marketing team … we sold them this notion that products were consistent and can be well-defined. And we can improve products, and we don't have to be as concerned with improving campaigns – the agency plans the campaigns.

"Brand marketers today at Target understand what programmatic is. They make investment decisions – at a high level, but they make investment decisions – in programmatic. And even our merchandising group has an awareness of it. And it hasn't been by accident: there's been a concerted effort to spread the word."

Accountability

Establishing a preferred slate of publishers simultaneously boosted Target's attempts to address issues such as viewability (link ARF story) and the speed at which its ads are served.

"When you have a direct relationship with a publisher, you've got somebody you can call, and you can have a conversation about that. So there's this notion of accountability," Reiter told the Internet Week audience.

"And that goes both ways. I've got a person in my team who just builds the marketplace and handles the relationships. That's his day-to-day job. He gets calls about, 'Why did spending go down last month?' … And so there's this accountability that I think is beneficial there."

In formalising that agenda, Target also now delivers a programmatic "report card" to several of its media affiliates on a quarterly basis. "We're working to scale that, but I think that's really important, because, again, the goal is to incentivise both parties to increase performance over time. That's the core premise," said Reiter.

Transparency

A close relative of accountability is transparency – another two-way process, and one that depends on the two advertising partners lowering their business defences.

"I think a publisher, typically, is more willing to share things directly with a marketer than maybe they would share with somebody else – [and] certainly somebody who would be viewed as an intermediary," said Reiter. "Because we're an end user, we're their ultimate client, there's advantages in terms of transparency.

And the flipside of this arrangement for the media specialists? "A publisher has a look into what our priorities are: what's on our road map? What do we value? What do we not value? So, ultimately, it all snowballs into mutual accountability and an incentive to really improve the relationship overall," he continued.

Such relationships, however, cannot take shape without significant attention. "There's a very long torso and tail out there, and from just a human investment standpoint, it takes a lot to manage, upkeep and – hopefully – improve those relationships and the outcomes they produce over time," Reiter said.

Outcomes of this kind might include media owners supplying Target with proprietary data, giving the company first refusal on fresh programmatic opportunities or temporarily offering lower prices via the Bullseye Exchange. But, most valuably of all, it builds trust.

"The transparency has been fantastic. And, again, I think having that direct partnership and creating a safe zone for a publisher is really important, certainly, for transparency so they can feel secure that their data and the insight into their inventory is safe with us," said Reiter.

Brand safety

In the case of the Bullseye Exchange, safety means ensuring that Target's brand messages ultimately are not situated alongside inappropriate content or placed on unsuitable platforms. "We like to call it a 'safe neighbourhood'," said Reiter of its programmatic hub. "One of the primary rationale points was to build what we call a 'safe neighbourhood'."

The need for reassurance came with the growing knowledge that identifying exactly where its ads were served was almost impossible before the Bullseye Exchange. "We got sick of having those moments, and, quite honestly, the bar was raised on us as a team. And it was the point where, 'This is going to happen again: what are you going to do make sure it doesn't happen again?'"

If witnessing "zero discrepancies" between the brand's ideal and the pages hosting its messages is perhaps unrealistic, doubling down on this matter has substantially reduced the frequency of these incidents. "It has helped a ton," Reiter informed the OMMA audience.

The next big programmatic project for Target involves building a video-buying platform running on the same principles as the Bullseye Exchange. "Right now," Reiter told the OMMA assembly, "we're not focused on any more publishers in those existing media types. We're focused on building a premium video marketplace."

And Target's lessons from developing the Bullseye Exchange, he asserted, have proved invaluable here. "A lot of what we were doing was helping publishers along – so, explaining deal IDs, putting publishers in contact with a DSP, going over how we would measure it, communicating the value proposition, illustrating how it will work over time, a lot of selling and operational partnerships.

"I think that's where video is today … And so, really, that's where all of our efforts are today: it's building a premium marketplace and then better assigning and extracting value out of the existing marketplace."

Source: Warc, Stephen Whiteside