Commentary

In Programmatic, Less Is Now More

The juiciest bit of Magna Global’s latest programmatic advertising report is undoubtedly the projection that programmatic TV will account for 17% of television ad budgets, or $10 billion, by 2019, but it’s far from the only tidbit of information.

One of the underlying themes of the report: The arms race ad tech platforms have taken up against one another in a bid to offer marketers the best one stop shop on the block. This chest-thumping match has in turn influenced what marketers look for in tech partners, suggests Magna.

“Services that support the greatest number of formats and devices will be prioritized over specialized offerings,” says Magna.

This “streamlining” is one of the major programmatic trends of 2015, says Magna. By turning toward “streamlined” offerings, marketers are taking the less is more approach with their platform providers.

Sticking to the “less is more” theme, Magna believes that “the most valuable data will become that which can be used to both identity and target consumers” -- i.e. login data. Magna predicts that data brokers and others that aggregate and extrapolate narrower sets of data will struggle.

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So in programmatic, less is becoming more. Being able to do more with less is one of the reasons Verizon bought AOL for $4.4 billion. AOL knew this, and was able to eke out a few extra hundred million from the deal because of it.

But a side effect of this streamlining is that the shape of the market will change. In early January, Brian Wieser, senior analyst at Pivotal Research, predicted that 2015 would be a banner year for some but a "painful" year for others. This is a sentiment we're now hearing more often.

"There will be winners and losers in programmatic," said Bill Lederer, an active media and marketing consultant and former founder and CEO of independent trading desk MediaCrossing, in a recent conversation with Real-Time Daily.

In its report, Magna writes: “The largest consolidated ad tech majors will thrive in this environment, as will small start-ups that handle new ancillary service offerings. Mid-sized specialized firms will struggle.”

1 comment about "In Programmatic, Less Is Now More".
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  1. Henry Blaufox from Dragon360, May 29, 2015 at 11:34 a.m.

    The drive among ad tech vendors to be the preferred service provider, and lock in clients for long term commitments, will require the vendors to constantly innovate and enhance their systems, rapidly, accurately (few or no bugs, no omitted features,) while making the systems as easy as possible for the end users. The vendors that don't will lose clients to those that do. Welcome to the world of agile, accurate development processes and delivery that matches promises to clients.

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