Programmatic is not a new trend within the marketing landscape, but 2015 was the year it took off. Numbers released by eMarketer predict that this year’s UK programmatic spend will surpass £2bn, and that’s no mean feat.
A star in ascendency, programmatic is like all marketing disciplines in that it does not operate in isolation. Its year will be shaped by the development of several key trends:
The growing number of bidders
More and more advertisers are bidding on programmatic inventory. While this is a gold rush for publishers, advertisers are left with a fragmented view of how their campaigns are performing across different platforms. What appeals to advertisers about programmatic is its simplicity. But relying on inventory across varying demand-side platforms (DSPs) in parallel has created inefficiencies, at odds with the process of optimisation and data collection in programmatic buying. As a result, in 2016 I believe that we will see many companies – advertising agencies in particular – invest in Meta DSPs, not unlike Havas’ Affiperf Meta DSP or trading platforms such as Meta markets, so that they can efficiently manage and view activity across multiple platforms.
Ever since Cannes, viewability has been back on the agenda thanks to Unilever’s CMO, Keith Weed. The issue Weed outlined was that, depending on which source you reference, up to 50 per cent of digital ads are not being seen yet brands still get charged for them. “It's like having billboard ads underwater, it's a complete and utter waste of our money”, says Weed.
If digital is to survive – and display ads in particular – this is an issue that needs to be addressed. Especially if the eMarketer prediction that 60 per cent of ads will be bought programmatically is to come true. In 2016, viewability will become the norm but ads will be optimised to more viewable ad slots. Media will be bought via vCPM, a pricing structure for online media associated with viewable impressions thereby meaning that advertisers only pay for ads that pass viewability thresholds.
‘Traditional’ channels get the programmatic treatment
TV, radio and out-of-house (OOH) are considered the stalwarts of the advertising industry, but even these offline channels are not immune to programmatic largely because whilst they still command big budgets, their inventory models are not without inefficiencies due to an over-reliance on manual processes.
Moving to a programmatic model – as we are increasingly seeing these channels do – will mean being able to monetise ad inventories regardless of screen size, location or audience numbers. Advertisers can be much more specific with their targeting and viewers will not be bothered by irrelevant ads.
We are seeing tentative steps being taken towards this model already, but in 2016 we are going to see their inventory being traded at a much higher rate, setting a precedent that programmatic will completely dominate TV in just a few short years. In turn, this will open up opportunities for adtech players across the board.
Adblocking has been hailed by many as the end of digital, but this is not the case. After all, traditional media still prospers in the age of digital. We are simply entering a new phase, and the key question is how does the industry adapt?
Without too much finger-pointing, we need to get to the root of the issue. Why are users installing ad blockers in the first place? There is no doubt that for years, the user experience has deteriorated due to poorly targeted ads resulting from wide-net strategies like retargeting, which have only caused the rift between advertisers/publishers and users to grow.
Instead of worrying about the what-if scenarios that ad blockers can create, 2016 is a time to be proactive, taking time to refocus on the relationship between the customer and the brand. I see more data being used in the future for better targeting, and advertisers and publishers re-examining what appeals to their audience the most when serving ads.
Our Eyeota Index indicates a trend whereby brands are investing more in audience data for their online advertising campaigns. Advertisers are growing in confidence and experimenting with different segments of audience data. Whilst sociodemographic remains the backbone, B2B and intent data are rising in prominence, helping advertisers to better understand their audiences and interact with them on a human level.
In 2016, I expect to see continued spend from key sectors such as finance and automotive, which typically have larger budgets for programmatic. The electronics and computers sector will likely increase its spend.
Kevin Tan, CEO at Eyeota
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