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Why 'Programmatic' Is The Word Of The Year

12/11/2014

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According to an ANA (Association of National Advertisers survey), “programmatic” was voted the word of the year. The result is not all that surprising, and perhaps more interesting are the reasons voters gave for voting for “programmatic.” 

In the ANA’s release announcing the results, a handful of quotes were provided “from some members who voted for programmatic as the ANA 2014 marketing word of the year.” Some were hot takes, some had merit and several rehashed tired complaints.

Let’s break down some of those quotes:

  • “This is the year that we woke up to the potential of programmatic, and it became the biggest buzzword in the industry.”
2013 was probably the year the industry “woke up” to the potential of programmatic, with potential being the key word. However, it seems fair to say that 2014 is when it became the biggest buzzword in the industry -- it did just win “marketing word of the year” after all.

  • “It is everywhere and will eventually be the only way media gets bought until the next big advance.” 
It is everywhere, but it’s hyperbolic to say it’ll be the only way media gets bought. It’s more apt to say that technology will become a bigger part of every media deal -- from direct deals to the fully automated.

Also, if you find out what that "next big advance" is before it’s big, let me know.

  • “It has been the focus of every meeting and every conference I have attended, even the ones it wasn’t the focus of.” 
This quote does a great job of summing up why “programmatic” is the word of the year. The quote is funny because it’s true and also representative of the fact that ad technology has seeped into all corners of the ad market. 

  • “It is the least understood but most used word in marketing. Nobody can define it but everyone wants it.”
Gather round for Hot Takes 101!

  • "Programmatic was one of the most used words in marketing this year, as marketers sought out more efficient and effective ways to purchase digital media.”  
Whoever said that definitely works in ad tech.

  • “Everyone is talking about it, trying to see how to measure it, implement and/or define it. But few people get it or do it.”
Actually, the vast majority of advertisers and brands are using programmatic.

  • “This is an unstoppable sea change for all media, including TV. I predict that, in short order, 80 percent of all media -- not just digital media -- will be traded programmatically.”
“In short order” is an ambiguous timeframe, but programmatic is projected to account for nearly two-thirds of display ad spend by 2016. It’s not unreasonable to predict that programmatic will account for the majority of all media trades in the “near future.”

  • “Programmatic has as many positive connotations as it does negative ones. It is clearly the future of strategic and media planning, but there’s still a lot of uncertainty in what the present and future holds.”
This is one of the best quotes of the bunch. “Programmatic” is simultaneously associated with efficiency, accuracy and speed as well as fraud, sub-par inventory and complication.


by Tyler Loechner
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Top Trends Predicted For Digital Advertising In 2015

12/2/2014

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Programmatic buying has increasingly taken center stage — and for good reason. Magna Global forecast that spend on programmatic advertising this year will increase 52% to $21 billion globally. This upward trend is affecting to brands of all industries and sizes, some of which are decreasing spend on traditional TV advertising in favor of a larger digital strategy. In fact, Forrester estimated that U.S. advertisers' spend on digital advertising will overtake TV in 2016.

With all this transition away from traditional advertising models, what does this mean for the digital advertising industry in 2015 and beyond?

1.     2015 Will Mark the Rise of the “Meta DSP.”

In September, Havas announced its new ‘Meta DSP’ model — the world’s first. This trend of working with multiple programmatic partners will become increasingly popular in 2015. Brands and agencies will realize they can’t single-source a programmatic partner. One provider will likely not have the ability to satisfy every campaign need.  

Each DSP has strengths for specific industries, verticals or audiences. One might specialize in QSR or travel, while another might be specialize in luxury brands. In 2015, advertisers will be more open to executing their strategy through multiple partners in order to capitalize on the skills of each.

2. 2015 Will Not Be The “Year Of Mobile.”

What might come at odds with the predictions of others, 2015 willnot be the “year of mobile.” Brands and agencies are seeking effective strategies across all consumer devices—ones that can span across platforms including display, tablet, mobile, connected TV and more. Brands want holistic omni-device targeting, and mobile-only won’t move the needle.

A mobile-only approach lacks an effective means for tracking impression and conversion flow in the same way that desktop providers offer. While impressions may be easily gauged on mobile, conversion is much harder to track; many consumers still prefer to complete transactions on desktop or in-store. This disconnect is part of the reason that successful omni-device targeting is so important to gauging the success and ROI of integrated campaigns.

3.     Programmatic Native Will Become Practical.

Two things will be needed for programmatic native to take off: Publishers who develop native layouts, and advertiser platforms that adapt their creative assets to match those layouts.  

There are plenty of systems with the fundamental functionality for adapting creative assets to a layout. Dynamic ad servers have been doing this for years. For example, mobile ad servers adapt to screen size, and retargeting ad servers adapt by inserting components from a catalog.

For native to become practical, publishers will need to make their native layouts generally available. Some publishers have done this by working directly with the few advertiser platforms that are ready to use them. The results are tremendous from all points of view; publishers supporting programmatic native are reaping high CPMs. Additionally, advertisers are driving huge lift in engagement and response, and the early adopting platforms are collecting healthy margins. Programmatic native cannot help but attract more players on both sides, so we predict that the game will be on in 2015. 

4.     2015 Will Lead To The Demise Of Old School Ad Networks.

In 2015 publishers will finally understand that there is a greater opportunity for ROI working with a smart programmatic partner, rather than a traditional ad network.

Ad networks often sell at a lower eCPM to close high volume sales. Ad exchanges, in contrast, now contain premium inventory, and many brands are bidding to purchase impressions through these exchanges. As programmatic advances, inventory quality on open exchanges increasingly matches direct buy deals, and programmatic providers’ optimization techniques allow them to purchase the right placement, at the right time, at the lowest cost possible, thereby reaching the best consumers in the proper context.

If some of these trends sound familiar, that’s because several have been a focus in recent years. However, the math behind getting the data on individual users has evolved immensely and is influencing how brands and agencies view programmatic partners. Advertising technology companies will spend the next year honing the science and math behind their technology, in order to reach the place where ad tech derives the most impact—the ability to engage with consumers on a 1:1 scale. 


by Eric Bosco
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