Programmatic: An Opportunity, not a Threat

March 05, 2015

opinion

Media buying has been dramatically transformed by programmatic practices. Current technologies allow marketers to engage directly with their target audience in a more efficient way than ever. However, some professionals still see programmatic as a kind of threat that will replace human knowledge and lead to numerous job losses. This is not the case. The most knowledgeable specialists are fully aware that programmatic media buying is so powerful that the sooner they incorporate it, the better.

By 2017, programmatic is expected to be the only way that media is bought. In the most advanced markets, such as those operating in the US, programmatic already represents almost 50% of total display ad investment (10 billion dollars), according to eMarketer figures. It is also expected to grow to up to 63% of the total $20 billion investment by 2016. The growth forecasts are even more impressive for mobile, where inventory has traditionally been far more aggregated: In 2016 programmatic will form 70% of the $14.15 billion invested in digital display.

The huge potential of this new buying method has not always been clear for the majority of marketers and publishers. On mobile, the first to take advantage of programmatic media buying, in the form of Real Time Bidding in open marketplaces, were a) advertisers looking for direct response and b) long tail apps, or apps that had a lot of traffic but were lacking a strong brand.

Big brands, both on the advertising and publishing side, avoided programmatic, because they felt the open marketplace didn’t protect the value of their brands: advertisers were not confident in associating with a publisher brand that was compatible with theirs and publishers thought the premium nature of their brand would be wasted in the open marketplace, and actually cannibalise their existing business.

However, the attitude of big brands is now changing thanks to Programmatic Direct, which brings together the best of both worlds. Advertisers and publishers can now maintain those direct relationships that offer the control and accountability that is so treasured in the traditional media buying world – and ensure they associate with the brands they truly want to engage with. At the same time, by buying programmatically they can buy audiences effectively and optimise in real time, making buying decisions impression by impression and user by user.

I believe Programmatic Direct will finally win premium publishers and brands over to the programmatic cause, but there is still some resistance to overcome. This is especially the case on the agency side, where some still believe that programmatic means losing the human touch with algorithms taking over from professional instinct and recommendations, leading to the extinction of media planners

The reality is, as some agencies already understand, that programmatic is there to boost media planners’ capabilities. It actually empowers them and super charges their ability to build and control a campaign (and the data behind it) at a far more granular level. Where previously they were bulk buying media based on aggregated reports from various Excel spreadsheets, they can now have a direct view on the media, build and manage their own campaigns and obtain a detailed view on campaign and ad optimisation.

Clever programmatic algorithms mean this new detailed level of perspective can also be analysed on a real time basis and across many more variables than a human with an excel sheet could effectively process, allowing campaigns to be automatically optimised ‘on-the-go’. But the planner is still extremely important, to oversee what algorithms do and tweak campaigns on a regular basis based on the targeting that is working most effectively.

Equipped with the functionality to plan campaigns on an individual ‘per impression’ basis – planners can now learn about their audiences and plan smarter campaigns, like specific campaigns for new customers alongside different offers for dormant or legacy customers, for example, or campaigns segmented to users that planners know have shown certain previous behaviours.

Supercharged in this way, planners – and the agencies they work for – can bring far more value to advertisers. Media planners will certainly have to evolve to command all the tools and data at their disposal in this new super-charged state, but there is enormous scope for them in the new programmatic paradigm.

Ultimately, those companies and professionals that understand this new win-win buying paradigm, and consider it as an opportunity rather than a threat, will position themselves as the biggest and most effective players of the next few years.

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