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Arun Kumar: Evolution of Programmatic

Three years ago, programmatic media buying was a rising star with a promise to shake the advertising industry out of its complacency. Today while programmatic itself has various connotations attached to it, it has undeniably set in place the very change it promised. Though programmatic spend as a percentage of total digital spend varies 10% to 40% (thereby bringing the first real challenge to Google’s search based buying model), its impact is being felt across multiple channels and the media trading ecosystem.

The ad industry has been very slow to catch up with technology historically. The rise of programmatic technologies has forced agencies and media owners to appreciate its role and the contribution that it makes. At the heart of the change lies the desire of any marketer: I want to pay more to talk to people who might actually buy my product, at a time and place that is conducive to both my consumer and my brand. Even TV, with the giant dollar spends behind it, has never fully satisfied that desire. Programmatic has made that desire less a fantasy and more a potential reality in the near future.

Too often, objections tend to focus around the possibility or impossibility of execution: TV stations would never agree to sell programmatically; publishers will not allow their inventory to be priced cheaply, so on and so forth.

If we were to strip the jargon and link back to the desire of an advertiser, programmatic simply enables you to message people you think are more likely to convert (used broadly) using data and technology and pay commensurately for the media.

The two components to this are technology and trading. Technology allows data to be collated, behavior to be watched in real-time, and streamline message delivery to improve effectiveness. Trading objectives are designed to improve value and drop costs. Whether that’s through an auction based exchange or a private marketplace does not detract its value for an advertiser.

The real impact of the last three years will be felt through automation, not programmatic, at least not the way we understand it today. Whether programmatic media buying scales to the expected levels or not, the principles it has set in place will drive all media planning and buying in the future.

As the ecosystem matures and consumers become more aware of the value of their data and seek to actively avoid irrelevant advertising, they will seek a greater value exchange in return for their information. This would enable advertisers to improve effectiveness efficiently on a scale not seen today. This would almost make concepts such as viewability and fraud irrelevant. When you know precisely what each exposure does for your business, it’s highly unlikely that you would be spending money on impressions that are not real.

That’s the promise at least. If we look at the history of programmatic technology, it will get translated into reality to a large extent. Advertisers whose internal systems and organisations are not prepared for this approach to marketing will falter and lose their competitive advantage. 

The assumption that big budgets and clout alone will get you the value and business you desire will be consigned to history. The more nimble you are, with the ability to mix and match between data, technology and media, the more value you will get from the wider ecosystem.

It’s a simple choice really and there is a massive reward for getting it right.

– Arun Kumar
Cadreon Global President