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Programmatic - What it is, what it isn’t and why it’s not replacing humans any time soon

Programmatic - What it is, what it isn’t and why it’s not replacing humans any time soon Caspar Schlickum

There is nothing like a quick pop quiz as an effective ice breaker and discussion opener. When speaking to a large room of new faces I often like to start with the pop quiz: Which of the following is programmatic?


- Using technology to place a buy order rather than faxing an insertion order?
- Valuing and buying an ad impression in real time and only buying the impressions that you really need?
- Using technology to decide which ad to serve based on the audience?
- Dynamically tailoring creative depending on the audience or placement?
- Connecting anonymous data from a vast array of sources to make buying and placement decisions?


I’ve asked this question to audiences on numerous occasions. I generally ask people to raise their hands or to stand up when I read out the definition that best matches what they think programmatic is. I can usually depend on an irregular rippling effect as people bob up and down; nicely proving my point that programmatic can be many things.


Of course, the truth is that all of these (and there are probably many other definitions or use cases) are programmatic.


Indeed, one of the problems of programmatic is that it has so many definitions. All too often it is the second definition in my list that gets the most bobs – the real time element which has so captured the imagination of our industry.


Real Time Bidding or RTB is indeed a form of programmatic, but for many, programmatic is assumed to be RTB and RTB only. In the video below, we have sought to offer a quick overview that shows the breadth of technologies and processes that can be encapsulated by the term programmatic, but also show how this new technology is dramatically changing the landscape of digital advertising.


 


For the video we have used the US market as an example of this dramatic change. In 2012, $1.9bn or around 13% of digital spend was bought programmatically, this is set to quadruple by 2017, with 30% of all digital spend (encompassing everything from display, video, mobile, digital radio and digital out of home).


In Europe, the trend is similar, according to the Interactive Advertising Bureau Europe (IAB Europe) and IHS Technology,  European online ad spend is on course to surpass outlays on any other media platform by 2018. And automated—or programmatic —ad buying will be a primary driver of this growth.


But the other myth or false assumption in this new programmatic age, is that as the machines take over, our industry becomes somehow simpler, and less reliant on expertise provided by people.


Nothing is further from the truth. The reality is that - and this is true of humanity in general - we evolve to take advantage of the tools we have available to us at the time. So as programmatic has changed media, we have also seen incredible new opportunities arise from data, inventory management, technology and of course an influx of new skillsets.


All of this while the fundamental objective of our efforts (to sell stuff to people) has remained utterly constant.


So the maths men are invading, but does this mean the end of the mad men? I for one hope not, and have to believe that if programmatic is to fulfil its promise for growth and transformation, it simply must find a way to bring the creative side of our industry with it.


That is not easy. The standardisation that is often required for a programmatic approach makes it hard. But there are other advantages around and sequential messaging (or storytelling for your creatives!) that create new opportunities for the creative.


The fact is that data-driven marketing is only successful when both parts of our brain, our teams, and our attitudes are in play.


But coming back to people. While technology is creating new opportunities, it is also creating - or exacerbating - old problems. Fraud and viewability are back on the radar in ways that they have not been for a while. And they should be.


Many of the technologies used to manage these have not kept pace with the development of the programmatic technologies themselves. A true “open exchange” ideally relies on technology to control for quality and safety. But most companies in the space are finding that manual verification is becoming critical to ensure trust by advertisers.


So once again, people and relationships make a difference. At Xaxis, we buy only a small part of our inventory in real time.


Does that mean we are not programmatic? Of course not. 100% of what we do is programmatic. However we find the audiences we target across a pool of trusted inventory that we procure directly from the publishers that we (through GroupM) have a relationship with.


This is in fact what our clients expect of their agency and by extension us: to get them the best possible media at the lowest possible price. Buying in RTB enables us to do neither. 


The new technologies we create work best when smart people at both clients, agencies and suppliers are combined with data and inventory to create new ways of engaging. To me, it’s the combination of these things that creates the magic and promise of programmatic.


Hear Caspar tackle programmatic technology and transparency at ad:tech London's Data-Fuelled Marketing Summit on 21 October. Click here to register for free.


 

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