Technology simplifies the placement of ads but, at the same time, the association with live auctions has had media executives and publishers equally concerned. How could media agencies ensure that brands get quality, in such an environment? How could publishers avoid the "race to the bottom" as auctions raise the risk of inventory going at greatly reduced rates?
Well, it looks like the latest research report from eMarketer could raise the questions that can get us to an answer, perhaps with programmatic providing awareness among consumers who are targeted via live auctions in-situ via their mobile when the context is right.
As for the research, there are three big takeaways. By tipping just over the $15bn mark this year, the researchers have identified programmatic as growing by nearly 50% this year over 2015 levels. Interestingly, of this $15.42bn market, 52% will come from direct programmatic buys this year, rising to 54% of the overall programmatic market by 2017.
With mobile the story becomes just a little more complex.
Overall, U.S. advertisers are going to put 60% of their programmatic budget into mobile this year, rising to 76% by 2019. So clearly, as one can imagine in a mobile-first world, programmatic is aimed increasingly at mobile devices. However, when it comes to programmatic direct, the proportion is set to drop from 71% of the programmatic market last year to 63% this year, and the decline is forecast to carry on steadily.
This means programmatic is in the ascendancy and a majority of programmatic buying is going to continue to be direct, but with mobile the importance of dealing direct, rather than going through an auction, will be less evident than in desktop.
So, what does this all mean?
Well, clearly media buyers have been concerned for some time that real-time might be more convenient, saving both time and money, but it had an increased risk around viewability and brand safety. When you deal direct with a publisher you can pick partners with a good record for viewability and safety, backed up by the right tools to measure you're getting what you paid for.
With an auction, there is less control; it's understandable there would be concern there. It's little wonder, then, that media agencies have wanted the convenience of programmatic tools but with less reliance real-time auctions to fill inventory spots cropping up across every corner of the internet.
Media agencies rely on getting clients good deals because they can buy premium inventory en masse, and so it makes perfect sense that direct relationships with the publishers providing the ad spots should be supported by technology. It should also be pretty good news for publishers that agencies are favouring direct deals, reducing the proportion of how much they have to trust their fate to the ups and downs of an auction system.
What is fairly perplexing is that while the proportion of direct programmatic is going up, it's coming down slightly in mobile where eMarketer's researchers identify real time bidding in private market places as the fastest-growing transaction method. So at the very time that attention -- and budget -- is rushing to mobile, the proportion of direct deals is going down. Is this a reflection of ad blocking in Chrome and, most recently, Safari which has has seen ad-avoiding extensions rocket to the top of Apple's app charts? Could that mean that this mostly leaves mobile display to in-app real-time auctions?
I'm not so sure that the answer is that negative.
In fact, the conclusion could well be that desktop is about awareness, which has to be bought through trusted partners where messages are safe and viewable, whereas mobile is more about the final push. Given that marketers cannot always know where and when this will be, it stands to reason that it cannot be bought direct but instead as circumstances dictate.
So on the one hand, we have direct programmatic building up foundations of a campaign with real-time buying primed and ready to reach out to someone when context dictates. Context is mobile's greatest asset but it's impossible to predict accurately when someone looks right to convert or at least move in to a consideration phase before data and behavior reveal the time is right.
With such uncertainty, then, it's logical that the final push could be being left open for live mobile auctions.
As the purchase funnel closes, then, in a mobile-first world, it looks like we could be seeing direct programmatic as setting the process going and building and awareness with contextualized mobile messages kicking in via live, private auctions at a later stage when the context is right. A little like driving for show and putting for dough, isn't it?