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4 reasons marketers need to adopt programmatic advertising

4 reasons marketers need to adopt programmatic advertising Kiran Gopinath

When meeting consumer demands, Henry Ford's memorable lines: "If I asked people what they wanted, they would have said a faster horse" and, "you can have any color as long as it's black," serves as a reminder there was once a time when consumer expectations were simpler and options limited.

Fast forward into the 21st century, and consumers not only expect beloved brands to introduce innovative concepts on a regular basis -- Forbes' coveted list of The Most Innovative Companies was introduced in 2010 -- but also to cater to their personal interests and reach them across all their digital platforms. The ever-evolving advertising technology landscape has helped make that possible. However, the ecosystem is now in a flux, in determining how to do this in the most efficient and effective way. Here's why:

Increased choice increases complexity

Consumers have come to expect bespoke ads and timely offers. Credit lies with the many milestones the advertising world has achieved and recognizing those that lie ahead -- namely, that advertisements can be more personalized and relevant offers can be done in real-time.

Technology has dramatically changed how the advertising ecosystem -- advertisers, brands and publishers -- views the development and dissemination of ad creative. Where once advertisers needed to use media buyers and planners to manage and target their ad inventory for a singular audience, real-time bidding (RTB) platforms -- which are set to reach $1.1 billion in ad spending globally by 2016 -- have now created many more choices for buyers in how they target the best audiences for their creative.

On a single platform, advertisers can select from millions of ad opportunities every second across a variety of channels. With minimal effort, advertisers can also layer data across their creative, enhancing its inherent value, making it fully customizable and targeted for multiple audiences and market segments. The end result -- ad buyers have more choices, and sellers have access to user behaviour, and an opportunity to address more demand than ever before.

However, this newfound freedom of choice has created a new set of issues. Arguably the most daunting, is determining the most profitable channel for targeting potential customers.

Omnipresent omnichannels

Forget the Ford Model T wow factor of the 1900s. In today's world, the smartphone has reached the can't-live-without factor for consumers. Forbes reported on a survey of smartphone owners by Braun Research on behalf of Bank of America, and found 91 percent consider their mobile phone to be just as important as their car (and deodorant). With a smartphone serving as "man's" always-with-you, always-connected device to online, social, and video platforms, the advertising world is now trying to master each of these platforms, or rather windows, into a consumer's heart, mind, and purchasing potential.

Mobile, social, and video platforms have gained in popularity and are now an integral portion of an advertiser's marketing mix. According to the researchers at ZenithOptimedia, "Mobile will leapfrog radio, magazines, and outdoor to become the world's fourth-largest media by the end of our forecast period," as noted by TechCrunch. Also noteworthy, is the rise of social media advertising, growing at 29 percent each year.

Online video is nothing to scoff at either. BI Intelligence recently published report, "The Pulse of Digital," notes that online video ad revenue will reach nearly $5 billion in 2016, up from $2.8 billion in 2013, while TV ad revenue will decline by nearly 3 percent per year during the same time period. Additionally, online video ads have the highest click-through rate of all digital ad formats (1.84 percent).

Collectively, digital ad spend alone is expected to grow 71 percent over the period from 2012-2017, according to a report from eMarketer, presenting the advertising ecosystem with the conundrum to find the right balance.

Man's dependency on cross-platform devices drives advertisers to cross-platform tools

With consumers simultaneously plugged in across multiple platforms and devices, and holding brands to higher expectations, the creation of responsive ads remains a challenge every agency is trying to master. The ability to adapt a creative message across multiple platforms has been, and continues to be, the bigger challenge for brands and advertisers alike.

As users access digital content across devices, ads have to be consistent across all screens and platforms. While this adds time to the creative ad planning process -- ensuring that the same ad created for TV is appropriately edited for mobile or social platforms without losing any merit of the creative message -- the pay-off is worth it. It means greater brand recall and higher scope of conversion.

While the process of cross-platform adaption is challenging, technology has again been the catalyst for change.

Spearheaded by the Interactive Advertising Bureau (IAB), the industry as a whole is in the process of developing new standardized digital formats that will provide further opportunities for creative development across the most popular platforms. One new area being considered is the rise of the second screen and connected TV. According to a survey conducted by Yume & Frank Magid, 70 percent of connected TV users said they interact with the ads.

Need for programmatic advertising is on the rise to deliver the right mix (message, timing, and target)

While media channels and the distribution of creative continue to evolve, the one constant that remains is the need to deliver an engaging experience for consumers. Brands recognize that today's connected consumers want engaging experiences across mobile, social, and online platforms. This need for unobtrusive engagement will only heighten as the digital deluge grows.

By leveraging the wealth of consumer data available with new technologies such as augmented reality, artificial intelligence, and programmatic advertising technology solutions, there is an opportunity to enhance user engagement experience in ways that make creative more impactful and accessible across multiple touch points. And for the advertising ecosystem, there is a way to make the process more cost efficient and effective with advanced ad tech solutions.

As consumers continue to embrace more technologies into their lives -- perhaps wearables are the next big screen -- the advertising ecosystem too is turning to advanced ad tech products to better, and pre-emptively deliver personalized ads and offers to consumers in a more cost efficient manner. Just as the Model T was so 20th century, will wearables someday be "so 21st century?" The advertising ecosystem is not waiting to find out. Rather, it is figuring out ways to engage consumers across any and all devices.

Kiran Gopinath is founder and CEO at Ozone Media.

On Twitter? Follow Gopinath at @KiranGopinath. Follow iMedia Connection at @iMediaTweet.

Kiran founded Ozone Media (now known as Adadyn) in 2006 and brings invaluable experience to lead strategy and product vision. Backed by investment from IDG Ventures and under the aegis of Kiran, the company has evolved its service offerings and...

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