Commentary

Programmatic Buying: Efficiency, Effectiveness But Also Lack of Knowledge & Transparency

by Bill Duggan , April 8, 2014

Programmatic buying was the topic with the most buzz at the recent ANA Media Leadership Conference.

There are a few definitions of programmatic buying. According to AdExchanger it’s the automation of manual media buying and selling decisions and processes, enhanced through data. Forrester says it’s a software-based system to automate the buying, delivery, and optimization of ad campaigns. And Google defines its as using technology and audience insights to automatically buy and run an ad campaign in real time, reaching the right person with the right message.

ANA and Forrester debuted new research at the conference which provided a number of interesting insights about programmatic buying.

The research found that marketers’ level of understanding of programmatic buying is mixed, with 40% admitting they don’t have a clue (including 12% who say they are “unaware of this way of buying”) and with 60% claiming some level of understanding.

The use of programmatic buying in the past year is also mixed. Fifty-four percent said their firms have used programmatic buying. Among the 46% who have not, many plan to in the next year (19% plan to; 27% have no plans).

The media for which programmatic buying has been used in the past year: Online display, 77%; online video, 41%. Also online search, mobile and social, all 36%; TV, 13%; digital place-based media, 10%; print, 5%, and outdoor, 3%.

The top benefits of programmatic buying are real-time optimization, better targeting, and decreased cost of media. Consistent with this survey finding, Google’s Bob Arnold said at the conference, “Programmatic buying is about driving efficiency and effectiveness.”

Potential barriers to programmatic buying include a lack of visibility into data used to define audience targeting especially in digital media as well as less visibility into where ads are placed.

Advertisers are clearly climbing the learning curve with programmatic buying. There is the need for increased education among marketers and ANA and other industry players must play roles here. Meanwhile, changing media practices and technologies are raising transparency issues and such concerns need to be addressed by agencies and media sellers.

ad optimization, advertising, media buying, programmatic, research

4 comments about "Programmatic Buying: Efficiency, Effectiveness But Also Lack of Knowledge & Transparency".

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Nick Manning from Ebiquity, April 9, 2014 at 8:51 a.m.
This was also a key theme at this week's Festival of Media Global in Rome. In fact, as one client said "You'd think TV had died and no-one wanted to talk about it." Not quite true but programmatic dominated the debate outside the halls, and the lack of transparency was the salient point. And while transparency is a big issue, measurement of performance is the really big deal, and should be first on the 'to do' list. Then the question is: how is transparency affecting my performance? If too much money slips down the side of the couch, not enough appears on screen (and the stuff that does may not be viewable). It's in everyone's interests ultimately that advertsing works, and it won't do if too much of the budget goes into the transactional chain. This won't change unless the advertisers who are funding all of this demand and get full data and money transparency. The ANA, WFA and 'neutral' parties like us need to keep up the pressure, and we'll get there.
Reply

Morten Pedersen from GLUE2020, April 9, 2014 at 11:26 a.m.

Nick is right. Advertisers need to start asking questions about price transparency (start v end price), impression transparency (where/when/how many/how much$), structural transparency (who's a seller/buyer), planning transparency (frequency capping/targeting/context) - just to give some examples... Lack of transparency is the single biggest issue the media industry has to act on. But then there are others: http://bit.ly/1hh4wUI

Steve Schildwachter from Enterprise CMO, LLC, April 10, 2014 at 12:33 p.m.

Actually, one of the few articles about "programmatic" I've seen that's weak on hype and strong on fact-finding. -->

"Programmatic" is a classic case of Ad Land terminology that starts as the definition of one thing, and expands to include several other definitions. -->

I'm smiling about Nick's comment about the death of TV, because at its core "programmatic" is a creature of online display and online video, and the jury is still debating how it will affect TV. Stay tuned.

Bill Guild from ChoiceStream, April 10, 2014 at 2:54 p.m.

Pricing transparency - not a good thing at all. It's like asking a potter about the cost of the clay. The discipline is called programmatic because the critical piece, the piece that makes the campaign a success, is the program. It's not just the media, or the data, or the creative. It's all of them put together cleverly by the program. Price transparency will encourage devaluation of the programs. Advertisers pay for the whole package, and they should focus on determining whether the results of the whole package are worth what they paid.