According to a new study from the IAB’s UK division, programmatic ad buys accounted for £960 million of the £2.13 billion spent on display ads across the internet and mobile last year.
While programmatic is growing at a rapid pace, the industry still has room to harness the technology’s full power. Publishers are cautious to adopt trending technology out of concern for protecting CPMs, and advertisers aren’t taking full advantage of data, optimisation, and the opportunity of private exchanges.
How the buy side can take better advantage of programmatic
Many advertisers just don’t realise the access to data that programmatic affords and the vital role it can play in the programmatic environment. This is because the mechanisms for using a comprehensive consumer profile to do real-time targeting, optimisation, and predictions are simply not in place. Some technologies do bid cost optimisation, others do data-driven performance optimisation, but the Holy Grail is a combination of both. While the DMPs actively use data to increase campaign performance and DSPs optimise the bid to get the best price, the combination of these two elements isn’t cracked yet.
Some companies claim to combine these two components but are often just using historical models. The opportunity exists to do real-time optimization on a consumer’s profile and then connect this with an optimised bid.
The buy side also has an opportunity to better explore premium inventory using programmatic channels. Historically, programmatic was bought on open exchanges and has earned the reputation of providing remnant inventory. But nowadays, many of the big publishers are making their premium inventory available via private marketplaces or programmatic direct and these deals can help advertisers improve their performance campaigns. Advertisers have an opportunity to incorporate programmatic buying into unique deals and upfront data-powered buys to take advantage of the automation and optimisation that programmatic has to offer.
The buy side’s third opportunity to fully harness programmatic is to incorporate quality metrics such as dynamic creative optimisation (DCO) and performance optimisation into media buys. Advertisers don’t have to compromise on quality to improve the ability to automatically buy or sell data. By tagging DCO and non-human traffic detection on top of programmatic buys, campaigns are enriched with sophisticated consumer data. Unfortunately, buyers still look at these things as silos, and very few campaigns that are driven by DCO are being run in the programmatic channels.
How the sell side can take better advantage of programmatic
The sell side also has room for improvement when it comes to programmatic technologies. There is a threat to the sell side that as data usage increases, brands and advertisers rely more heavily on their own first-party data to understand consumer profiles when buying media. As advertisers adopt this bring-your-own-data (BYOD) approach and bargain down the price of the ad, the value of the publisher’s customer data decreases. If publishers don’t improve their ability to incorporate unique data sets as part of programmatic channels and make their packages attractive, the value of their inventory will decline significantly. Publishers have an opportunity to promote features like overlay bot detection or access to a private marketplace in order to make their deals more appealing.
In a world in which Facebook and Google are moving beyond cookies and device IDs and toward person-based targeting, the next challenge is for publishers in programmatic to get personal in data targeting. Media buyers are demanding this level of targeting via programmatic channels so the sell side must start thinking about how they can incorporate offline data or personal level data from site visits or app engagement in order to create compelling and unique packages. These offers should be customisable in real time to improve performance and promote a single consumer view.
Finally, publishers need to focus on consumer engagement as a metric. Publishers should analyse consumer behavior and interactions after an ad is served to get a better idea of how exposure is driving reactions. The reality is that publishers are not simply competing among themselves anymore, they are up against other channels, including search and connected TV to provide better engagement. Incorporating engagement is going to be a trend that takes off.
Programmatic has come a long way, but we are not winners yet. Both advertisers and publishers will need to embrace the evolution of the business in order to maximise its potential and to ensure survival, otherwise the massive growth the industry is seeing could plateau and fade out.