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Where the Future Lies for Programmatic Advertising

Where the Future Lies for Programmatic Advertising

It’s clear that automated advertising trading has quickly become a driving force for real-time marketing. According to the IAB, programmatic now accounts for about 60% of all digital spend in the UK, with 87% of advertisers and 93% of agencies engaging in programmatic buying.

But in April this year, my CEO and the co-founder of AppNexus, Brian O’Kelley, declared the death of it. In an article published in AdAge, he described it as “an obsolescent technology built for the one-dimensional and monolithic internet of Eudora and Netscape.”

The internet of old revolved around a one-way communication stream for email and desktop web browsers, and programmatic technology was built to generate efficiencies and reach audience segments at scale. Now, however, it encompasses everything from machine learning and the 'internet of things' to GPS and real-time data analytics. Digital advertising needs to evolve to keep up with the interconnectedness and personalisation of today’s internet.

Programmatic technology has often resulted in poor online user experience, driving a growing number of consumers to adopt ad blockers, and is undermining the entire business model of the internet. It has therefore become crucial that we help publishers deliver a world-class and frictionless experience on their site. And to achieve this, we need to think far less about programmatic, and far more about programmable.

In fact, we are now entering a new era of digital advertising that reflects an internet that is far more seamless, efficient, hyper-intelligent and unlimited in its opportunities than programmatic ever was. It’s made up of three pillars: real-time data, learning algorithms, and partner ecosystem.

Real-time data

The Programmable Age approaches data in a completely different way. Before, data was limited because it was so fragmented and carefully shielded, and it didn’t allow marketers to tailor or personalise products down to the individual (you, me).

The programmable internet ensures that the exchange between technology platforms and consumers is multichannel and dynamic – the opposite of before. In this integrated ecosystem, data can transform how different conversations inform one another in real-time.

In this new era, marketers can create a data loop to drive marketing, whereby they can monitor the performance of a campaign, and then use the learnings to drive new marketing behaviour. In this context, it’s vital that marketers own and control their own data, as they need to establish a continuous cycle of test and learn. If they were to give up their data to walled gardens they would essentially hand over the keys of their castle. They have to own, use and learn from their data if they want to thrive in the long-term.

Learning algorithms

Human intuition is the most powerful algorithm in the world. We are much better at connecting disparate concepts together than computers. We can design creatives, craft messages, invent products, categorise things, understand how different kinds of people are likely to respond to certain stimuli.

Algorithms that combine customer data and marketers’ intuition can generate extraordinary outcomes. It’s time for advertisers to leave granular optimisation to computers, and focus instead on how best they can leverage their intuition and data to add unique value to the digital advertising ecosystem.

Partner ecosystem

Programmatic advertising heralded the start of digital ad buying, involving automation and data-driven decision-making. This will continue, but as it does, it will move away from automating the delivery of static creative, to providing marketers and advertisers the opportunity to reinvent how they engage with customers.

In the Programmable Age, marketers will be able to leverage their data to create their own algorithms and operate in an open ecosystem with partners who can enrich what they do, and help them create fluid, relevant and bespoke experiences for every user.

Brands that don’t have their own algorithms and deliver custom messages to their consumers will risk letting their competitors do it instead.

Marketers need to realise that the future is programmable – it’s not a coincidence that Twilio, a programmable platform, was one of the first tech companies to IPO [initial public offering] this year. And while marketers should take advantage of the multitude of opportunities the programmable internet opens up, those of us working on the frontline of the ad tech industry need to advance technology to help marketers make the most of and shape this consumer internet.

If you'd like to learn more about the programmable marketing system, join Nigel and Bannerconnect's Sebastiaan Schepers in their session 'The Future of Programmable Marketing' at PMI: Europe next week.

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Nigel Gilbert

Nigel Gilbert

Nigel leads AppNexus' strategic development across Europe. Prior to joining AppNexus, he served as head of Orange Ad Market (UK & FR) for France Telecom. He was responsible for all commercial operations at Orange Ad Market, the real-time bidding (RTB) exchange. In 2001 Nigel co-founded Unanimis, the first and largest digital publisher network in the UK. As Commercial Director for Unanimis, Nigel established and managed operations for eBay, BBC, Channel 5, and the London Stock Exchange, among others.

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