Programmatic Advertising What is it and Where is it going?
A key takeaway from the Cannes Lions advertising conference earlier this year was the emergence of programmatic as no longer a dirty word within the industry.
It is no surprise! According to a report just released from BI intelligence, programmatic will account for over $18.2 billion in U.S. digital ad revenues in 2018, up from just $3.1 billion in 2013.
So why is it creating such waves within the industry? Read this analysis to find out.
Industry Opinion by Charlie Faulkner, head of EMEA and APAC, Manage.com
Put simply, programmatic advertising is about the automatic buying and selling of media opportunities on digital platforms. Instead of having an individual at the end of the phone who sells inventory, the whole process is automated. This process happens in real-time, so as soon as the impression loads, the advertiser bids against others based on the context of the website.
Programmatic’s technical sophistication, which has some of the world’s brightest data scientists working on it, combined with its constant evolution has drawn interest from all areas of the advertising industry. Ad exchanges have subsequently taken note, with more and more releasing all their inventory to programmatic. As a result, major brand powerhouses such as Mondelez have reassigned all of their budgets accordingly.
With the industry moving so quickly it is essential that brands don’t get left behind. Rapid advancements in data analysis tools have given brands increasingly sophisticated ways of acting on insight. This in turn, is leading to an arms race to fully understand consumers searching out increasingly niche, longtail content based on their personal interests.
Mobile driving the evolution
With the traditional advertising model of ‘shouting’ at eyeballs being replaced by a new landscape where content needs to be relevant and interesting and engaging, a number of trends are emerging in the mobile space. Mobile is opening up a world of possibilities based on the fact that consumers carry their devices at all times, plus constant rises in smartphone penetration and the development of new technologies:
- Geolocation
iBeacon is an exciting new technology that is driving opportunities to geolocate content and adverts. For example, in the near future a consumer may be reading about fashion on their favourite mobile website site as they shop for a new summer wardrobe. As they walk past individual shops the adverts presented to them will then change based on the shop in question and the range they would like to promote. Exciting stuff! - Video advertising
Clearly, consumers’ attention spans are very short and increasingly so with the advent of social media platforms whose objective is to deliver instant entertainment. To cut through therefore, advertisers need to take advantage of dynamic content. Video provides the perfect opportunity for this based on the increasing access of streaming services due to 3G and 4G being integrated into mobile price plans as standard. The way in which platforms such as Facebook can run videos instantly will also provide instant consumer engagement opportunities. - Native advertising
As consumer demands for engaging content increase, so do their potential frustrations with irrelevant and uninspiring advertising content. Advancements in native advertising therefore take into consideration the platform in which the content is being presented to sync adverts more smoothly. This will be particularly significant for social media behemoths such as Facebook and Twitter who are in the early infancy of trying to extract true value from their huge subscriber bases.
Ready to switch on?
When it comes to brand marketing, there is a general consensus that strong data capabilities will separate the winners and losers over the next three to five years. Consequently, as programmatic’s strength is based on the data it generates, smarter decisions can be made. Brands like AOL UK and Kimberly Clark have already become clear advocates for the industry, future proofing their businesses (and their job roles and responsibilities) by embracing programmatic.
Programmatic delivers guaranteed returns, with inventory that is not performing simply switched off. Don’t be put off by the technical sophistication – most providers will be adept at translating the outputs to business benefits with ease. With brand competition increasingly fierce, programmatic really is a no brainer.
Manage.com is the largest mobile RTB buyer across all the major mobile ad exchanges. Its goal is to help advertisers reach their target audience in an efficient, highly scalable manner in the mobile channel. Employing proprietary algorithms in combination with first-party and third-party data relationships, Manage.com offers a suite of audience segments that enables optimal engagement at scale.
