Programmatic is not a four letter word
The programmatic market continues to grow and shows no signs of slowing down. IAB research predicts that the share of ads bought through programmatic technologies is set to rise to 47% by the end of this year, reaching up to 60-75% of total digital display advertising by 2017.
This really is big. Programmatic is a huge growth area and has the potential to play a substantial part in addressing the issues in the digital system if managed correctly – and the key to this is education.
Without education and understanding at each level, programmatic faces the danger of becoming the next marketing buzz phrase, a bit like “big data.” For marketers and publishers alike there is a lot of noise, yet still, how many organizations have actually got a handle on what to do with the volumes of data they now have access to and what they can do with it to add real value to the business?
Programmatic’s initial problem was that it seemed way too complex and techie. From chief marketing officers to account handlers, there is an awareness, but many attitudes seem to be along the lines of, “it’s not something I need to understand or even ever think of getting involved in – we’re in the creative industry, right?”
So I see the education process working at a number of different levels. Firstly, a level of understanding, commitment and responsibility is required at the C-level. To date this has been a big focus for us – getting brands to understand that technology should be making things easier and having a positive impact on ROI when it comes to digital spend. Brands certainly shouldn’t be seeing – as many have – an increase in digital spend equating to budgets thrown into a black hole. Marketing executives for some of the world’s largest global brands are often accountable for budgets of up to and in excess of millions of dollars and really can’t ignore the need to have a fundamental understanding of programmatic to grasp the efficiencies and savings it can bring to the bottom line.
With even more urgency, the marketers that are managing and planning campaign media spend on a day-to-day basis really do require a deep understanding of programmatic in order to implement, manage and monitor an effective solution and maintain complete control. After all, it is only then that marketers can use advertising as a means to build lasting relationships with customers and potential customers through serving ads and messaging to the right people, in the right place, at the right time.
Although education is one of the issues standing in the way of programmatic realising its full potential, recent studies suggest that marketers are aware that across the board there is a weak grasp of the subject and there is a desire to learn more about the fundamentals of programmatic trading.
There are a number of misconceptions that have hindered a willingness to learn, from both marketers and publishers, when it comes to programmatic. At least now there is a wider acknowledgement that programmatic is not just for direct response advertising but for brand awareness too.
Another misconception that affects both publishers and marketers alike is the idea that programmatic means lower CPMs, which of course is not the case. Programmatic provides benefits to both buy and sell sides. From a publisher’s point of view, we just need to look at the Guardian’s programmatic strategy, which has shown that taking a risk and leaning in to programmatic from the start has been highly beneficial, bolstering revenues and supporting global growth.
A successful programmatic strategy for publishers is one with a clear commercial model that provides advantages for all parties while maintaining control of buyers and pricing. Technology is the enabler here, allowing brands to create direct relationships with publishers, and do it programmatically – and of course, vice versa.
Issues around transparency have also held back marketers and publishers from proactively seeking education around programmatic. This seems ironic, as it is programmatic that will ultimately drive balance and transparency across the ecosystem. As more brands and agencies begin to build in-house platforms, programmatic will evolve to become an essential marketing tool and those who are ahead of the curve will flourish.
Mark Connolly, chief revenue officer and VP international, AudienceScience