While Madison Avenue’s biggest agencies have embraced programmatic media buying as the next big thing, the jury is still out among the longer tail of the advertising industry. The vast majority (94%) of smaller and so-called mid-tier agency executives say they either don’t trust or are undecided about the validity of buying media through programmatic exchanges, according to findings of a quarterly survey conducted by agency data processing and software developer Strata.
The findings come as stark contrast to the sentiment of big agency holding companies, which have invested deeply in technology and infrastructure -- including the creation of dedicated “agency trading desks” -- in an effort to shift from direct buys with media companies to machine-based buys negotiated via programmatic media exchanges.
This data tells us that there’s some uncertainty in this space and that there’s not a full buying from advertising agencies yet,” says Joy Baer, executive vice president and COO of Strata, who shared the data exclusively with RTM Daily.
Baer said the findings are the first to benchmark the sentiment of Madison Avenue’s long-tail -- the small- to medium-sized agencies that are the core clientele of Strata’s media-processing systems. She estimates that while the sentiment of the Strata agencies is very different from the view of big agency holding companies, it is not inconsequential in terms of influencing the marketplace, estimating that the agencies utilizing Strata’s systems represent about 30% of total media spending.
“We don’t deal with the agency holding companies,” she explained, describing Strata’s clients as “ large regional agencies, independents and [scaling] all the way down to the smaller shops.”
One of the biggest issues Strata discovered wasn’t just trust in programmatic media-buying, but defining what it actually is. Baer noted that many of Strata’s agency clients may be utilizing programmatic buying -- paid search of Google display as examples -- without even realizing they’re doing it.
That said, the vast majority of respondents (58%) said they didn’t believe there is a “unified” industry definition for the term.
Strata Agency Survey On “Programmatic Buying”
Don't Use Programmatic
Programmatic Lacks Unified Definition