Ad Industry Makes Real-Time Bid For Automation
Programmatic buying accounts for 17.5% of digital ad display market today, rising to 43% in 2017, according to Magna Global.
Brian Monahan, managing partner for the Magna Global intelligence practice, told attendees at the OMMA RTB in Los Angeles that overall U.S. marketers will spend 4.6% more on advertising this year.
Companies will spend 11.5% more on digital advertising. Search will account for 16% growth; digital video, 28%; and programmatic buying 39.5%.
Magna estimates the programmatic market that will automate buys will grow from $2.4 billion in 2012 to $7.5 billion in 2017, Monahan said. But what will it take for RTB and programmatic buying to become the norm?
Monahan believes major issues still exist: the number of media connected devices doubled from two to four in the past few years, and consumers are exposed to 2.3 ads per waking minute daily. Conversely, Magna estimates the time consumers spend with media at around 74 hours per week, compared with 60 hours sleeping.
Some companies have already had success. "Every dollar we pull into programmatic buying yields 5 times the return on investment," said Bob Arnold, associate director, global digital strategy at Kellogg.
Before the industry can reach its full potential, other issues must be addressed. They include problems of transparency vs. margin pressure, privacy vs. user experience, creativity vs. production efficiency, bundling insertion vs. simultaneous consumption, and audience vs. outcome.
For Monahan, that potentially means 100% of display ads bought through this process, but Andrew Casale, vice president of strategy at Casale Media, can't see a world where brands rely 100% on automation. "You can automate a lot of the process, but you can't automate premium in a way that preserves the creative," he told MediaPost. "I see RTB as a way to automate the buying of simple executions, and I can see it consuming 100% of those at some point."
Take the travel sector, for example. Consumers use Expedia, or an equivalent self-serve travel site, to directly book a flight or hotel, but when looking to book a monthlong vacation across Europe, travelers will more likely call an agent, Casale explains
Monahan points to more changes for marketers, such as private exchanges, similar to the launch of Casale Media's recent marketplace; contextual signals; expending RTB to other media like overnight TV and radio; and ANA procurement task force.