INside Performance Marketing
Navigating “the 1%”: Keeping and Managing Programmatic in a Transitional Period

Navigating “the 1%”: Keeping and Managing Programmatic in a Transitional Period

Automating digital media trading can make operations more streamlined and efficient, but we’re only at the start of the game with programmatic ad management.

If you believe the current hype, programmatic advertising management is the holy grail to maximising your ad impact in a multi-channelled digital world.  

Programmatic ad delivery enables marketers to focus their ads on specific target audiences and to customise them accordingly. On the surface, it is a really exciting prospect and one publishers and clients alike have been crying out for. But the big temptation is to run and grasp every new technological feature available, without working out how or where it is going to fit in the business strategy.  

The general consensus seems to be that digital advertising opportunities are developing so fast, only deploying the latest technology can keep anyone one step ahead. But before you get sucked in, you need to stand back and take a long and hard look at the bigger picture.

For example, it might surprise you to know that programmatic digital display advertising in the UK accounts for just 8% of total media expenditure, as reported by Theorem. If we look at marketing communications spending more broadly, that figure will fall below 1%. So whilst programmatic may be growing rapidly, we really need to keep its overall impact in perspective. Even if you are a sophisticated user of technology, your use of programmatic techniques to manage display advertising spend is still likely to be relatively small.

When you put these figures in perspective, it’s clear we really are at the inception of programmatic advertising management, despite what some technology vendors may have you believe. Anyone who expected the media industry to go fully programmatic this year will be very disappointed. The advertising industry is still in a period of transition.

Commercial goals to drive decisions

First, you need to look closely at what investment in programmatic technology will achieve for your business and examine the challenges in deploying such solutions.

Programmatic advertising creates a new challenge of integrating various technologies to deliver the optimum result — automated, targeted ads serving across channels, devices, and audience profiles.  

In addition, while technology may make certain processes more efficient, it can never truly replace human decision-making. Thankfully, good advertising will always remain a clever mix of art and science. There is no ‘one size fits all’, regardless of what technology vendors may tell you.

Yes, technology can help, but it should not be the focal point. There is some great innovation happening out there, resulting in lots of specialist applications that have swamped the market. But many of these application creators are hungry start-ups backed by private equity or venture capital, which means their primary motivations are often to build market share as quickly as possible – a short-term goal.  

Such ambition can conflict with the advertiser’s long-term need to grow its profile, get closer to customers, differentiate its messages, and bring in new business. Both advertisers and media owners need to be aware that they are not being enticed by short-term goals when they are investing in programmatic tools, to the detriment of long-term roadmaps.

Choosing wisely

The biggest threat to programmatic is its own hype - the race to deploy programmatic to strategies without adding an apparent value. Even the most astute commercial directors and technology managers may find themselves being sold a chain of platforms that do nothing but overcomplicate the situation, when the focus should be on business objectives as opposed to technology features.

There is also another big reason for not jumping on the bandwagon just yet. According to Theorem’s bespoke market data, many media owners are using tools and technologies from over 20 different vendors. Adding even more specialist tools creates major integration challenges, not to mention hefty costs in terms of training, support and implementation.

In addition, it is not unheard of for technology vendors to go out of business or change direction, which leaves the customer with a gap in their technology stack and the requirement for even more technology to solve the problem.  Choosing vendors badly (or just being unlucky) is costing media owners and advertisers dearly.  

Keep it simple

Programmatic advertising can improve efficiency through automation, and improve campaign effectiveness through better targeting and real-time analytics. But to reach this end goal, marketers and advertisers must understand that they will need to navigate a complex set of new tools.

Programmatic technologies are developing fast on both the sell and the buy sides. Very few vendors offer the full set of solutions in one place. As such, most businesses prefer to go for a collection of ‘best in breed’ components. But if programmatic ad management has a place as part of your wider strategy, then the key to success is simplicity. Opt for an uncomplicated ad tech stack that offers both flexibility and longevity.

In today’s connected world, the shift to automated advertising is inevitable and it’s clear that  programmatic advertising is here to stay. Our advice is to make decisions based on clear market insights and your overall business objectives – not on the availability and development of the latest features. There’s still 92% of this market left to play for.

Continue the conversation

Got a question or comment – post on Twitter, Facebook or LinkedIN.

Henry Rowe

Henry Rowe

Henry is the EMEA managing director at Theorem.

Read more from Henry

Related Articles

Join over 10,000 performance marketers for the ultimate weekly update on industry news