As programmatic grows, it is also expanding across more and more channels with programmatic radio now coming on board. What are the predictions for where it will be in 5 years? And what does this mean for advertisers?
We’re a long way from where the industry was less than a decade ago. Programmatic advertising looked very different then – heavily stigmatised with low quality inventory and either little or no optimisation in the few toolsets available.
The breakneck speed of technological development that followed made it incredibly hard to keep up and contributed to the rash of hysterical media coverage that was often either over-hyped or misinformed scaremongering.
From its beginnings as a solution for unsold inventory, programmatic is now an essential digital strategy for brand as well as direct response advertisers.
IAB figures released towards the end of last year show that programmatic accounted for almost £1bn (£960m) of UK spend in 2014 – 45 per cent of the online and mobile display total. It’s a similar story in the States: IAB (US) figures put 2014 spend at $10.1bn – 52 per cent of display related advertising and 20 per cent of total internet advertising revenue.
And it’s growing fast. With the rise of video and mobile ad spend the UK IAB estimates 70 to 80 per cent of digital ad spend will use programmatic technologies by 2018. Add to that the digitalisation of broadcast and outdoor delivery and we’re looking at an entirely programmatic future.
What is beyond doubt is that programmatic offers real advantages in granularity and scale. Historically, advertising was divided into two categories – brand and direct response. Advertisers who expected the utmost accountability at the bottom of the funnel accepted waste at the top.
Innovations such as real-time bidding (RTB) and programmatic direct make it possible for brand advertisers to automate and target their ad buys at scale.
Such data-driven insights can help marketers influence the message of a campaign, change its targeting and measure what is working. Evolving from standard digital advertising, programmatic allows marketers to reach very focused audiences – and also to expand to find new customers
In the long-term we won’t even talk ‘programmatic’ at all because before too long everything will be sold programmatically. As we have heard before with ‘digital’ advertising, the future of programmatic will simply be the future of advertising and ad technology will free minds to focus on delivering better and more impactful campaigns and informed insights.