It’s not quite the "rise of the machines", but the explosive growth of programmatic is radically changing the whole media landscape. Online display ads are routinely bought and sold through automated exchanges, a market already worth more than $15bn.
According to Magna Global, 25% of digital video inventory will be traded programmatically this year, potentially rising to 70% within the next three years. Programmatic spend is predicted to triple and could account for more than half of all digital advertising transactions by 2017 – implying that it will include a significant amount of brand spend.
Should you be glancing nervously over your shoulder, eyes peeled for the algorithm that is coming for your job? Absolutely not: programmatic is not a threat, but an opportunity to think deeper, work smarter, and achieve better results. Thirty years ago, financial services rode out the same wave of data-driven automation, and there is no shortage of opportunity in that industry today. Yes, there will be commoditisation as ads are increasingly traded electronically, but human insight will become more, not less, important as brands seek out more-precisely targeted segments.
New data, deeper insight
As technology improves, the greater speed and accuracy of programmatic approaches will inevitably bring more channels into the fold, including TV, radio and outdoor. Of course, greater value and efficiency are appealing, but this is not a race to the bottom: brands will still be more interested in boosting ROI than in cutting costs. And it’s here that really smart data and analytics are going to be absolutely critical, providing actionable insight into the most valuable consumers.
Programmatic spend is predicted to triple and could account for more than half of all digital advertising transactions by 2017 – implying that it will include a significant amount of brand spend
We are all watching more video content than ever, and the fragmentation of traditional TV into multiscreen, multichannel, online viewing allows us to choose exactly what we watch. Again, what could seem like a threat is, in fact, an exciting opportunity to put the right, most relevant ad in front of each person – so long as you can make sense of all the data.
Happily, new approaches and richer data make it easier to identify and understand digital consumers, and to deliver pinpoint accuracy and relevance in advertising.
So, even as the mechanics of buying and selling inventory become automated and commoditised, the messages themselves can become more targeted and personal.
Leaving repetitive, low-value tasks to the machines, agencies and brands can instead focus on defining their audiences and crafting creative messages that will resonate for each one.
Enrich your view
As digital audiences fragment across channels and devices, brands can see the opportunity for one-to-one advertising that follows the connected consumer. Naturally, more personalised and relevant advertising means greater ROI and better audience engagement. To achieve this one-to-one engagement at the required speed and scale, programmatic is the only game in town – but it must be backed by data that is rich enough to support very precise segmentation.
Advertisers will need to supplement demographic data with psychographic data on the personalities and emotive character traits of consumers – revealing what makes them tick. Adding personality data to existing approaches is quick, simple and effective, delivering unprecedented insight into buying motivation. By understanding not only where online consumers come from but also who they are and why they buy, advertisers can use programmatic approaches to target them on a one-to-one basis, ensuring better engagement and greater ROI.
Programmatic will certainly be disruptive, but it doesn’t need to be difficult, mysterious or threatening. Combined with the intelligent use of data, it’s a fantastic opportunity that will benefit both the advertising brands and their potential consumers.
Jon Hewson, sales director,