As consumer behaviour becomes ever more digital and increasingly mobile, marketing is changing. The traditional campaign approach will no longer be fit for purpose in an increasingly always-on multi-screen reality, which is blurring the lines between media channels.
Programmatic brings digital display advertising into this real-time world; improving targeting and increasing flexibility and accountability in paid media. Recent research by AppNexus, IAB Europe and WARC, showed that 89% of respondents believe that programmatic will either be dominant or very important in the future of digital advertising.
Despite this recognition of programmatic’s significance, the same research revealed that only 42% had a programmatic strategy and publishers, advertisers and agencies all cited significant obstacles to embracing it. They accept that programmatic helps to deliver the right ad to the right person at the right time – but it’s clear that adoption has been held back by a lack of knowledge, skill-sets and budgets.
Over one quarter (29%) cite skill shortages and lack of budget (27%) as obstacles to their organisation adopting programmatic. This lack of knowledge and skills has resulted in many marketers – unsure of the unknown – being unwilling to allocate budget to programmatic audience buying, sticking with named media as a proxy for audience. However, as the rapid growth in programmatic continues, it is clear that marketers are becoming more comfortable with the concept, if still unclear on how best to execute.
The World Federation of Advertisers (WFA) has noted that brands executing their own programmatic activity has remained level at 2%, but its recent report on the subject is seen by many as a call-to-arms for marketers to become more engaged in the way their media budget is spent.
It should be noted, however, that being engaged with programmatic is not the same as bringing media buying in-house. It takes more than technology to make media a core competency, despite the claims of many software vendors.
This is why, across Europe, research shows that agencies are currently leading the market in both the understanding and application of programmatic, and for the next five years at least, the majority of the industry will rely on them to capture the programmatic opportunity.
Conversely for Publishers, where media is the core business, the rapidly developing programmatic technology is a potential way to strengthen a business model battered by the emergence of new competition.
By leveraging audience insight and data at scale, those bringing programmatic in-house are finding new ways to monetise media and collaborate more effectively with buyers. They are able to move more quickly and act more holistically across their business than those who hive-off programmatic sales to a third party.
The emergence of different programmatic marketplaces is facilitating effective collaboration.
Programmatic Deals are now a reality and Programmatic Guaranteed is developing fast. Programmatic Deals allow for a more collaborative buyer / seller relationship and are becoming ever faster. While Deals once took over a week to agree, Accuen and Gourmet Ads executed a live deal at the AppNexus summit in June in a little under five minutes.
Likewise, the guaranteed market place, which is core to how the majority of digital advertising is bought and sold today, is ensuring programmatic has the potential to empower both parties. It allows publishers to use data more effectively when packaging the inventory and buyers to integrate these valuable media assets into a marketing approach that is increasingly real-time and always-on, rather than seasonal or campaign driven.
As consumers shift to mobile multi-screen engagement and advertisers follow, the scale and complexity of the digital landscape will only increase. While programmatic has brought clear benefits to the early adopters, it is fast becoming not just advantageous but essential for companies to compete in a real-time world.
It is vital that knowledge and skillsets catch-up to execute campaigns that are tailored to consumer behaviour and make use of the effective collaboration that is now possible.
An effective programmatic strategy is key to all parts of the ecosystem achieving this.