Almost half of online display ads were purchased programmatically 2014 and it’s widely accepted that growth in the advertising industry over the coming years is likely to be fuelled by programmatic advertising.
But this rapid uptake belies the fact that if programmatic – particularly programmatic direct, where most growth is expected to lie - is to reach critical mass and fulfill its potential to transform the industry the ecosystem needs to change.
As the marketing industry turns its attention to planning for 2016, top of its agenda should be how we overcome the barriers to programmatic’s success in the UK market - critically, how brands and publishers can see more value coming through the programmatic pipeline.
The battle for revenue
This is one instance of technology being both a blessing and a curse for marketers. As things stand, too much of the money flowing through the programmatic landscape is being swallowed by technology providers. As a result, programmatic trading isn’t translating into value for agencies, publishers and - by extension - brands. Typically, publishers take home just 30% - 40% of the ad spend from programmatic campaigns, with the 60% - 70% going to ad tech teams.
The knock on effect of this is to tighten publishers’ purse strings and reduce their ability to invest in the creative content that’s most likely to convert a consumer to purchase. Only when publishers see tangible rewards from programmatic will they boost investment and convince brands to put more advertising spend into the channel.
A bumpy journey
To add to the problem, the programmatic ad journey is still fraught with technical issues. Whether it’s ad-blocking, viewability problems, concerns about brand positioning or fragmented user journeys, brands need reassurance that their ads are reaching the right audience, at the right time, in the right context. This will require a more collaborative approach between advertisers, publishers and media buyers, with all parties aligned on a brief to avoid irking consumers and falling short of delivering ROI.
It’s critical that a collegiate partnership exists across the board so practices that fall short are accounted for and improved upon. In a nutshell, a simpler and more transparent operation is needed to convert programmatic’s doubters and encourage more investment.
Lost in translation
There are many voices in the programmatic marketplace – and they’re all speaking in different languages by using varying data and metrics. For example, trading desks are targeting based on metrics that bewilder advertisers and publishers, and first party data is only useful to agencies if they can access it directly and continuously judge what value it offers.
If everyday items were traded in the way that programmatic advertising is currently, the world would quickly descend into chaos. We need a common data currency that works for everyone to build trust and transparency, and allow programmatic to flourish.
By Alex Kuhnel, Kantar Media.
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