The internet was a real game changer for publishers. Happy to sit back and continue making money on a model that was hundreds of years old, the internet came in and disrupted everything for them. Everything moved online and consumers’ expectations for accessing content when they wanted, where they wanted went through the roof. I know none of this is news, in fact, the changing face of publishing, and the advertising they sell has been well documented for the last ten, fifteen, even twenty years. But in the last few years I’ve witnessed the rise of another advertising technology that could be equally disruptive; programmatic. But sadly, I’m watching a number of publishers hesitate to embrace it.
According to the Institute of Practitioners in Advertising (IPA), its members control over 90 per cent of all display advertising in the UK, so it’s safe to say agencies will have some say in how and when programmatic should be used. We know from the conversations we’re having that agencies, in wanting to stay agile and adapt to the current market, are starting to put real pressure on publishers to adopt programmatic. If you’re not investing in programmatic to respond to that, are you losing out on up to 90 per cent of potential spend and therefore writing yourself out of plans? Perhaps.
A part of the reason that publishers have been slow to adopt programmatic is because of a big misunderstanding about its value in the industry. We’re still working out how to drive value from it. Programmatic trading is still in its early days – publishers are screaming out to be educated, the programmatic adtech space is bloated with vendors with imperceptible differences in their value proposition, agencies are skilling up to position themselves for this new media age and marketers are starting to bring expertise in-house to understand how to make best-use of their first-party data in a programmatic landscape. The market has got some maturing to do. Then there are the publishers that are trying to fit programmatic into their legacy infrastructure who are finding it problematic because integration is both costly and time-consuming.
But we are getting there. Anyone involved in buying or selling ads is finding themselves perched precariously on a precipice, where choosing to stay put seems the safe option and choosing to adopt programmatic means taking a leap into the unknown. Industry trends suggest more and more are thankfully choosing the latter. Procter & Gamble has recently announced plans to buy 70 to 75 per cent of its U.S. digital media using programmatic ad tech by the end of this year. It’s the largest advertiser in the U.S. and has an ad spend budget close to $2 billion. Cadbury also recently penned a deal with Tubemogul that will see its ads bought and sold in the US and Canada using programmatic. Plans for expansion spread as far as additional key markets such as Asia and Europe.
From a publisher perspective, there is also some cut through. AOL UK's owned and operated sites including AOL, The Huffington Post, Engadget and TechCrunch are all trading ad space programmatically. As are a handful of other players. The benefits of programmatic are becoming better known. Automated auctions and other elements can improve efficiency for advertisers. It can deliver ads to big audiences, allows you to speak to the right people at the right time and drive better value.
Some publishers have found it easier to adopt programmatic than others. The bigger the sales team, the more people you have to educate, so the longer it takes. So in many cases we’re seeing smaller, more nimble publishers driving innovation. Across the board though, it’s a case of testing and seeing what works for your business. It was never going to be a one size fits all scenario, but whatever your programmatic strategy is, think about the needs of the ad agencies that control the bulk of your budgets, then you may find it easier to make decisions about adoption.
By Irfon Watkins, Founder and CEO of Coull.
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