Media Buying: The Rise of Programmatic

By aiwpadminJanuary 28, 2016

by John Egan.

Today, one word seems to be dominating the conversation about media buying — programmatic. Yet not everyone understands what “programmatic” actually means. Close to two-thirds of marketers surveyed last year by Ad Age on behalf of RhythmOne didn’t know the Interactive Advertising Bureau’s definition of the term.

Boiling it down to its essence, programmatic refers to the automated buying and selling of media. According to IAB, about 20 percent of digital advertising now is sold “by one machine talking to another machine.”

 

Experts expect that percentage to keep rising. Karsten Weide, vice president of media and entertainment at research firm IDC, predicts programmatic will represent 60 percent of ad buys for online and mobile display by 2019.

 

Programmatic advertising will be discussed March 15 during a session at LeadsCon Las Vegas on media buying. The session will be led by JJ Bannasch, president of Katana, a digital media agency.

 

As programmatic’s share of ad buying and selling grows, so, too, will questions about how to ensure programmatic is working well.

 

“Marketers are under pressure to figure out how to utilize technology to automate buying processes and, as a result, how to add value and ensure transparency in planning, buying and measurement,” says George Patten, managing director and global lead for media management at consulting giant Accenture.

 

Patten adds: “The truth is, media buying has become vastly more complex, fragmented and costly in recent years. The quality, as well as the cost, of media inventory purchases is under increasing scrutiny.”

 

Nonetheless, programmatic buying and selling holds promise. Programmatic advertising lets media planners leave the logistics to the technology so they can concentrate on strategy, RhythmOne says. Morgan Stanley analyst Brian Nowak calls programmatic “one of the most powerful trends” in online advertising.

 

BI Intelligence says advertisers and publishers are “rapidly adopting” tools for programmatic ad buying and selling. More than four-fifths of agencies and brands already buy display ads programmatically, according to BI Intelligence.

 

TV has lagged in the adoption of programmatic buying, though. However, Brett Adamczyk, vice president of business development at Videa, which specializes in programmatic capabilities for local TV stations, says he thinks the majority of the TV marketplace will embrace programmatic in mid-2016. In early 2017, Adamczyk foresees “a tidal shift of dollars” moving to programmatic TV ads.

 

Whatever the situation with TV or any other medium, the burgeoning market for programmatic advertising will keep evolving and fine-tuning.

 

“The next wave in programmatic will be about the quality of the data and whether data can help advertisers solve complex and unique challenges to measuring success, like connecting online advertising with offline action. For consumer products, that means connecting offline consumer decisions in real time to online activity,’ says Chris Choi, deputy director of media at digital strategy firm Blue State Digital.

Click here to register for LeadsCon Las Vegas 2016.

 

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