There is a buzz afoot about the rise of programmatic media buying, or real-time bidding (RTB), but what is often overlooked is the broader -- and, in my opinion, more significant -- shift to programmatic marketing as a whole.
But what does the word "programmatic" even mean?
Programmatic generally means that a program or algorithm has been written that is executing a set of commands. Real-time bidding is considered "programmatic" because a computer program executes the actual media buy. Humans really are not suited to the task. Not only are we too slow, but we're generally bad with numbers and complain far too much.
Since the word programmatic is often used interchangeably with the word algorithm, there is some confusion. For starters, since the word algorithm sounds so mind-blowingly technical, many believe that "programmatic" systems operate entirely on their own and use their superior silicon marketing skills to make campaigns perform. In reality, a computer program is executing a set of commands and rules as entered by a person, who remains in control.
Modern airliners are controlled fly-by-wire and have automatic pilot systems you might describe as "programmatic." That's not to say the pilot doesn’t have control. Rather, the program takes in the rules (for example, climb to 25K feet) as entered, and then executes on those rules. Fortunately, at any moment in time a pilot can instantly take back manual control. The media equivalent would be a campaign manager hitting the stop button before accidentally buying a billion impressions!
RTB is the first well-known technique within the broader concept of programmatic marketing. Demand-side platforms (DSPs) simplified the process of inputting the rules into programmatic media buys. However, other enabling layers of technology are going to facilitate new categories within the broad concept of programmatic marketing. I outline a few below.
1) Programmatic creative. Dynamic advertisements are now a standard tool in the marketer’s toolbox. While we don't often think of these as programmatic, in reality, the ad server is executing against a set of rules as defined by the marketer. Images and offers get swapped out based on the rules defined by the marketer. These systems are going to continue to become ever more sophisticated, allowing marketers to do this themselves.
2) Programmatic segmentation. The idea of "building a segment" is generally left in the hands of data scientists and other science types with multiple math degrees. However as tools evolve, "programmatic" segmentation will allow marketers to build their own unique segments more easily. This opens exciting possibilities, giving new meaning to marketing intellectual property.
3) Programmatic content. The content you see on any given site is starting to become more and more customized to the individual. Marketers are able to encode the rules of who should see what content. E-commerce companies are taking this to a new level when they programmatically change the prices of their products based on the individual. Email marketing companies are programmatically sending emails with targeted offers to people, who abandon a shopping cart, for example.
The rise of programmatic marketing will bring massive changes and opportunities. Tools and technologies will evolve that allow marketers to encode the "programmatic" rules -- and marketing will become ever more automated.