Digital advertising is fundamentally changing before our very eyes. Consumers’ large-scale shift to mobile and broad technology adoption in virtually every part of our lives has forever altered how publishers, media buyers, agencies and advertisers think, plan and execute strategies in digital advertising. Separately these two dynamics are compelling. But it’s when mobile and technology—specifically programmatic technology—intersect, where things start to get really interesting.
Before we examine that intersection and what it means to digital advertising, it is worth considering these dynamics in a broader sense. Both are easily observable by anyone walking down the street; and yet despite their ubiquity, they are extraordinary in their impact.
Mobile is now a way of life. Over the last decade, mobile has become the primary screen for consumers to learn, play, work, and socialize. And it is not just that it fits into today’s culture and lifestyle; it is also fueled by a constant stream of innovation from extremely clever and useful applications to high-performing and sometime beautiful devices and network technologies that support our endless hunger for bandwidth.
The second dynamic is high-volume transaction technologies that we have become familiar with in financial markets, credit card companies – and search advertising. These models have now become the foundation of ad tech. Termed “programmatic”, ad tech’s programmatic markets enable real-time decisioning at the impression level to drive both efficiency at scale and the opportunity to be strategic and precise to drive advertising campaigns. Although this is a big change for ad tech, if one takes a step back, the move to this type of technology is inevitable.
The numbers tell us that at the intersection of these—“mobile programmatic” is fundamentally changing advertising:
> According to eMarketer, mobile ad spend will overtake desktop spend and print spend – only TV spend will be larger
> According to Millward Brown’s AdReaction study, mobile is the largest single-screen medium across the world.
> Mobile programmatic will support more than 80% of digital spend by 2017
This is a fundamental change indeed.
Ultimately, the way to test the value and strength of mobile programmatic is whether it provides core business benefits to market participants—most notably publishers and advertisers.
Advertisers are responding to the mobile consumer; they are also capitalizing on unique characteristics of mobile to drive brand lift and sales lift. Mobile plus programmatic enables advertisers to execute real-time advertising to a consumer who is on their mobile device from the time they wake up until they go to bed. Whether it is responding to a cultural meme that allows advertisers to engage in the dialogue (e.g. Nike advertising when games highlight their sponsored athletes) or executing local/hyperlocal campaigns to drive in-store purchases.
Publishers are also responding. For many publishers, more than 50% of consumption is now through mobile and this percentage continues to grow. Publishers have reshaped content to fit into the “snacking” behavior of mobile consumers, stood up mobile-specific sites, and are findings new ways to engage the mobile consumer by “appifying” their content.
Both advertisers and publishers are retooling their buying and selling models to programmatic. Advertisers, primarily through their agency’s trading desk, and publishers are increasingly looking to programmatic platforms that can offer the ability to transact directly with each other (called programmatic direct), to trade via private exchanges, or to buy and sell on the open market.
The times they are a-changing. Mobile will soon become the second largest spend behind programmatic, and programmatic will not only be the foundation of mobile and digital advertising but has increasingly become important for TV. It is certainly time to mobilize to meet this extraordinary opportunity.
By Victor Milligan, Chief Marketing Officer at Nexage.
Read the second piece in the series here!
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