Rapid adoption of programmatic advertising by some agencies, brands and publishers
There is no doubt that programmatic can be a tricky landscape to navigate, but it’s a reality in digital advertising. Several major brands have openly discussed their commitment to programmatic. In May 2014, Ad Age reported that American Express planned to shift 100% of its media buys to programmatic. Procter & Gamble also announced that it would spend 70-75% of its digital media programmatically by the end of 2014.
Big agencies are committing to programmatic. For example, IPG announced it would automate 50% of its media buying over the next several years. According to Forbes,“more than two-thirds of agencies use automated ad buying for at least 20% of their budgets, and more than a third use it for 60%. Nearly half of them expect to use programmatic for 60% of their budgets by 2015.”
For buyers, programmatic provides a method for creating more effective campaigns at a greater scale because it uses data for targeting and optimization. According to a study DoubleClick recently commissioned with Advertising Age, the ability to more effectively target consumers across digital media platforms was the primary benefit of programmatic buying for advertisers. Second was increased operational efficiency and third that it provides relevance in marketing messaging. While automation is a huge benefit of programmatic, targeting is extremely important as well.
Top publishers are also on-board with programmatic. After all, it offers an additional way to sell their inventory without getting their sales team directly involved - new revenue coupled with operational efficiencies. More than 98% of major online publishers in the U.S. have some form of programmatic ad sales strategy in place for the U.S. market, according to research by the IAB and Winterberry Group. Conde Nast, Hearst Magazine Group and The Wall Street Journal all have their own private marketplaces. It isn’t just large national media brands either. According to a study by Forrester Consulting, almost two-thirds (62%) of local publishers are selling inventory programmatically.
The real question mark is whether this commitment is toward a specific type of programmatic. Are agencies, brands and publishers moving toward open RTB, private marketplace or a combination of programmatic methods? For each, it depends.