Having spent the past few years explaining to advertisers and publishers why they really need to understand programmatic – not see it as something technical that a third party is better-placed to look after – it seems we have finally reached a turning point.
With recent research showing that 89% of publishers, advertisers and agencies in Europe believe that programmatic will have a significant impact on digital advertising, it is fantastic to see so many taking steps to take ownership and control.
Does this mean we’re reaching the stage where all digital advertising budgets will be spent through real-time bidding (RTB)? There is still a way to go yet. However, there are key areas that are set to shape the programmatic landscape over the next few years.
1. C-level ownership of digital spend
Since becoming a hot topic at a senior level, programmatic’s sails really have caught the wind. Many C-level executives have raised their heads above the parapet and announced aims to buy all digital media through programmatic channels. We are sure to see a lot more of this.
2. Bringing advertising technology in-house
For many brands, the solution to concerns over the lack of transparency around pricing, quality, safety and complexity of buying ads programmatically has been to establish partnerships directly with a technology company that provides the automation and control required to overcome these issues.
Programmatic has the potential to be the CRM of advertising – helping brands build lifelong relationships with customers.
Buying ads in-house doesn’t mean spending money on training staff or bringing in specialist and expensive skills. Implementing an enterprise advertising management system (EAMS) to intersect with traditional enterprise resource planning (ERP) software revolutionises how global advertisers manage their data and execute their digital advertising campaigns, providing an overarching view of how budget is being spent and how it is performing.
The key to a successful future for programmatic is for brands, agencies and tech providers to adapt and build relationships that drive transparency and create simpler, more-effective operating models.
3. Added value and control for advertisers
Programmatic technology is set to become as valuable as offline media. Until now, publishers and agencies have had all the power in online advertising, as, historically, they were responsible for data collection and ownership.
With advertisers taking control of data, programmatic has the potential to become the CRM of advertising – helping brands build lifelong relationships with customers. Advertisers will soon be able to strengthen these relationships by buying impressions on an individual-user basis.
4. Explosive growth in video
Each year, we hear it is the "year of mobile", but video is the key format. We are seeing brands spending more on video online, and this will continue to grow as advertisers begin to understand the huge benefits.
Mobile market growth was driven by consumer trends, but most brands we talk to are investing more in apps than mobile advertising. The question advertisers are looking to address is not how best do I advertise to my customers on mobile, but how do I better measure and reach audiences across multiple screens at the right time?
5. Programmatic growth in global markets
The programmatic drive began in the US but growth is quickly spreading worldwide, particularly in the UK and Europe. The market in China and Japan is also set to increase massively by 2017.
The development and roll-out of self-serve models are set to shake up the market – something that will work well in the UK, where the market is much more performance-driven than the US. Greater trust in programmatic in Japan and China also means that we will soon see the majority of adspend through automated channels there.
As brands become smarter with programmatic, publishers do, too. Once they see inventory has different values to different brands, the way we trade becomes mutually beneficial. The goal is to fix the ecosystem’s problems and create a flexible environment that can be self-maintained.
Mike Peralta, CEO, AudienceScience