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6 programmatic predictions for 2017

6 programmatic predictions for 2017 Tom Burg

2016 was a big year for programmatic advertising

This year, it's projected that programmatic digital display ad spending will surpass $22 billion, mobile programmatic will exceed $15 billion, and programmatic video will reach $5.51 billion -- and that's just in the U.S. Programmatic is an ever-evolving beast, and as we move into the new year, I predict it will mutate and infiltrate even more areas of media and advertising.

Here are a few guesses on where it will go in 2017.

1. Search will complement programmatic
In 2017, we'll see a better balance of search and programmatic spend within marketing departments.

Although I think programmatic advertising will emerge as the primary way in which digital media is bought, paid search will be the most complementary tactic for marketers -- especially as they get a better understanding of search and find better ways to measure its influence on driving desired actions. It's why 75 percent of marketers plan to increase their Google AdWords spending in the coming months.

Search spending can bring these quantifiable conversions, but it's the effective reach and awareness through programmatic ads that's driving more and more searches. If engagement with your ads is good but conversion isn't where you'd like it to be, a boost in paid search spend could greatly enhance your overall marketing efforts.

2. Audio marketing opportunities abound
Video got a lot of hype in 2016. In 2017, the next star of programmatic advertising may be audio. It's unbelievable how much time people, especially Millennials and those in Generation Z,  spend streaming music. What's more, the majority of them listen to free streaming services as opposed to paying for premium, ad-free options.

There's a huge opportunity for advertisers to drive awareness among these listeners via programmatic audio, yet only about 7 percent of marketers currently spend money on it. In 12 months, however, this may increase to over 11 percent, which is typically the first sign that a segment can reach critical mass.

If your brand targets these cohorts, programmatic audio is worth a test because in its early adoption phase, costs would be relatively low and the buyer is in a stronger position to dictate terms.

3. Small- and medium-sized businesses will form data pools
Smaller businesses may assume they're precluded from diving into programmatic because they don't have enough data to make it work at scale.

If you're running a business in a town of 20,000 with only a small batch of customers, you wouldn't want to pay for third-party data to scale your reach. And when you're limited to first-party data, reaching those customers via programmatic channels seems silly because the campaigns are going to be pretty small. So how are you to expand nationally if you're a small business?

To compete across niche markets, smaller businesses could form data-sharing agreements with like-minded peers in other geographic locations. These could be noncompetitive vendors all targeting the same audience types or segments. Together, they can generate larger data pools of customers that can be targeted for national programmatic campaigns.

4. Last-touch attribution will receive its last rites
Last-touch attribution -- while easy to implement and understand for ad buyers -- is an outdated measurement that doesn't give enough credit to other ad exposures that helped the conversion. I see the movement away from the last-touch measurement model.

As brands investigate and understand more about the complete user journey, from first engagement to conversion, they will be more willing to use other forms of attribution. The variety of attribution offerings and technology will gain steam to give you a sense of what's possible for your business.

5. Programmatic creative will tell a story
At a recent industry panel, I discussed the future of creative in programmatic with several leaders. The major takeaway was that the focus on technical refinement of ad serving is overshadowing the creative side. This will shift.

It won't be long before digital marketers unfold the brand story for consumers. The interactive nature of the internet will ignite the storytelling flame. This will require a few elements to be in place, namely ad buying and creative teams working together to create concrete stories that translate (in sequence) across multiple channels. This will prepare you to launch more innovative omnichannel campaigns across whatever devices audience members may use throughout their day.

6. Post-election, marketers will question the quality of data
The best data is only as good as how you interpret it. It's a sentiment that rang true during the 2016 election cycle. Polling data -- at least at the state level in the most critical battleground states -- was wrong more than it was right. There's been backlash. I believe this is leading to some marketers questioning the value of data and wondering whether intuition is a better way to make decisions.

"Facts are sort of, 'I might take them or I might not,'" said Wendy Clark, the chief executive of DDB North America. "They're certainly discretionary now, so there is that notion as a marketer and advertiser of understanding we live in a post-factual democracy."

Although Clark believes the election shows "facts are somewhat negotiable," the key is not to disavow the data but to remember that nothing is perfect. Don't throw out everything you've learned about audience wants and needs. In programmatic advertising, the best marketers rely on both data and intuition to succeed. Programmatic won't be on autopilot any time soon, and we'll see marketers lean in more to have a say in how data is being read (and how it applies to campaigns).

2016 was a banner year for programmatic advertising, and I don't see that momentum slowing down in 2017. From programmatic audio to data pools to data quality, I expect many changes on the horizon. What predictions do you have for the upcoming year?

Tom Burg is the vice president of product marketing for Centro. Centro develops digital advertising and media management software to help advertisers streamline and scale digital campaigns.

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