Everything you need to know about programmatic series featuring extracts from our co-authored guide with ISBA - This extract is taken from Vol One ... Download the full guides here.
We are currently seeing dramatic changes in the process of buying and selling of online advertising. With it being unfeasible for agencies to pick up the phone to all the players
in the ever increasing ecosystem, programmatic advertising has been heralded as an algorithmically driven replacement. With its focus on technology and data, the media
being traded programmatically has grown from a base of zero five years ago to $14.2bn globally in 2015, with this predicted to rise to $37bn by 2019 (Magna Global, 2015).
One of programmatic’s key strengths is its ability to target advertising 1-to-1 to achieve the media goal of the right person, at the right time, in the right place with the right message. However, does this targeting outweigh the increased supplier complexity and risk of ad-misplacement?
Even though the following article from the Harvard Business Review shows the ideal scenario, it highlights an important aspect of the programmatic initiative. This technology has the potential to disrupt how advertising works at a fundamental level.
“Instead of setting advertising budgets on quarterly cycles, marketers will launch ad initiatives whenever opportunities emerge, and they will optimize them for efficiency and effectiveness on the fly. The “budget cycle” is already a quaint idea. It will soon be a thing of the past.
...CMOs and CFOs will join forces as never before. Together, they will enable a new marketing model that blends art and science—the power of human creativity married with the split-second precision, and profit potential, of marketing automation.” Is Programmatic Advertising the Future of Marketing? Jeffrey F. Rayport, Harvard Business Review.
The Current Reality
Many marketers agree on the promise of programmatic, but is that potential being widely realised today? Gartner’s 2015 Digital Marketing Hype Cycle (Appendix) suggests not yet. It shows a roadmap of emerging technologies in digital marketing, showing their level of adoption and the expectation surrounding them.
It reveals it is relatively early days for the various programmatic technologies highlighted. Although a few advertisers are forging ahead with advanced programmatic campaigns, many have had high expectations frustrated by a lack of consistent delivery. It will always take time for new technologies to be fully integrated and adopted into current practice, but is there anything specific that has held programmatic up in this process?
Part of the problem lies in the fundamental change in the media buying industry that the adoption of programmatic requires. There has been a very steep learning curve to gain a level of understanding of the technology and ecosystem. Many have approached programmatic as merely a different way to do what they always did, rather than embracing the new way of thinking needed to realise programmatic’s true value.