PROGRAMMATIC BUYING’S VALUE FOR MARKETERS
What benefits of programmatic buying have you seen in your organization?
“Programmatic has helped us drive performance and results for our clients in a more efficient way,” says UM’s Cohen. “Legacy practices like sending insertion orders and using weekly reports to guide optimization can’t continue as the world grows more complex. Programmatic technology helps us execute buys, track the results and optimize in real time across channels.”
Overall, agencies and marketers say programmatic has resulted in increasingly effective targeting across platforms, improved efficiency and greater relevance (Figure 6). For large publishers, programmatic has made it possible to monetize vast amounts of inventory efficiently. “It would be hard for us to sell out billions of impressions each month without a programmatic strategy,” says FOX’s Friedman.
“On a big breaking news day, we’d have traffic spikes that would be impossible to monetize effectively. Now we’ve been able to create competition for unsold inventory in a way to get the biggest yield possible while maintaining our direct-sold rate card.”
What benefits of programmatic buying have you seen in your organization?
Driving impact for marketers,publishers
“Programmatic has helped us drive performance and results for our clients in a more efficient way,” says UM’s Cohen. “Legacy practices like sending insertion orders and using weekly reports to guide optimization can’t continue as the world grows more complex. Programmatic technology helps us execute buys, track the results and optimize in real time across channels.”
Overall, agencies and marketers say programmatic has resulted in increasingly effective targeting across platforms, improved efficiency and greater relevance (Figure 6). For large publishers, programmatic has made it possible to monetize vast amounts of inventory efficiently. “It would be hard for us to sell out billions of impressions each month without a programmatic strategy,” says FOX’s Friedman.
“On a big breaking news day, we’d have traffic spikes that would be impossible to monetize effectively. Now we’ve been able to create competition for unsold inventory in a way to get the biggest yield possible while maintaining our direct-sold rate card.”
Overall, CPM rates for programmatically bought and sold inventory are expected to double in the next two years, according to Ad Age survey respondents.
Higher CPMs have indeed been one of the benefits of the shift to programmatic, and the reduction of undesirable inventory through viewability, brand safety and fraud-prevention technology will likely continue this trend. Still, given the improved targeting and relevance that come with the higher rates—as well as the ability to verify viewability—marketers are unlikely to object. More than six in 10 (62.7%) of the agencies and marketers in the Ad Age survey believe they’re seeing higher-quality ad inventory when using programmatic buying compared to two years ago, and a large majority (86.4%) believe the quality of available ad inventory will be even higher two years from now. “Rising price isn’t an issue as long as the quality is there,” VivaKi’s Venuto says. “If my ad isn’t getting viewed, it’s worth paying more to get it viewed. We can’t look at price or performance in isolation of other metrics.”
Looking ahead
While programmatic represents a fraction of the entire advertising environment, it has gained significant traction and shows strong momentum. As this growth continues, several trends will shape the way programmatic is viewed and used by media companies and marketers, including its maturation as a routine, mainstream strategy; the emergence of viewability as a common currency between buyers and sellers; the consolidation of platforms into more complete solutions; a growing role for programmatic in online video and TV; and the ability to deliver and manage campaigns across
Programmatic becomes the norm
Many newer marketers with few legacy investments and practices to slow them down are getting a fast start with programmatic. At the same time, large consumer packaged goods companies such as Kellogg’s and P&G, as well as financial services firms including American Express and Bank of America, are longtime consumers of sophisticated programmatic strategies, making it clear that the technology has reached the mainstream.
As technologies mature and buyers and sellers gain expertise, programmatic will likely become the norm.
“Looking forward three to five years, people won’t say
‘programmatic’ anymore; it’ll just be the way you buy audiences, and it’ll be a more sophisticated channel,” says McKenna of DoubleClick.
Not every company shares the ambitions of American Express, which recently issued an RFP asking for strategies to shift its entire $128.5 million online ad budget to programmatic. Ad Age survey respondents estimated that about half of their buys would take place this way within five years—a considerable shift (Figure 7).
Viewability enables CPV media buying
Programmatic allows for rich data and metrics, providing a more transparent and accurate viewability-based model for media buying and selling to emerge. By using a cost-per-view (CPV) model, buyers can pay for what they most value, while publishers get the value they deserve for high performing inventory.
Platform consolidation
One key step in the evolution of programmatic buying will be the consolidation of platforms. As mentioned, today, many companies must navigate a crowded vendor universe to assemble their own technology stacks from a number of providers that address individual elements of the overall solution.While some are willing to undertake this and the risk it entails, many more will wait for more complete solutions that reduce the number of partner relationships to be managed.
