Commentary

Is 'Programmatic' Becoming A Dirty Word?

Snapchat’s recent opening of its platform to third-party advertisers with a new API is likely to have reverberations for programmatic media. Advertising, after all, will help fuel the company’s goal of achieving $1 billion in revenue by the end of 2017.

Snapchat’s move enables third-party advertisers to serve ads programmatically on its platform for the first time, and that’s a big deal. But there's another part of the mix: Snapchat and other companies are starting to shift away from the use of the word “programmatic"—or don’t use it, period. Instead, they'll use the words “programmable," “automated” or “auction-based.”

Snapchat, Facebook and Google, plus ad-tech giant AppNexus and global demand-side platform The Trade Desk, among others are turning away from the word because, for better or worse, it’s associated with ad fraud, ad blocking, and other hot-button issues.

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AppNexus and The Trade Desk, in particular, can ill-afford those associations, as they’re expected to file paperwork for initial public offerings later this year. The Trade Desk closed a $60 million round of equity funding in late March. Speculation around an AppNexus IPO began in early January. Neither company wants to be treated in the public markets the way publicly traded ad-tech firms are like PubMatic, Rocket Fuel, Tremor, and YuMe, to name a few. Rubicon Project is probably performing the best of the publicly traded pack.

In it’s purest sense, programmatic media is simply automated media buying that enables efficiencies of scale. A byproduct is that the process has the potential to deliver insightful data and analytics that can help inform ad messaging, audience creation, audience targeting, and improve yield, among other benefits.

In all fairness, everyone’s got a different definition of “programmatic."

“I believe they’re [Facebook, Snapchat, AppNexus, The Trade Desk, and others] actively looking to distance themselves from the word ‘programmatic,’” said Mike Driscoll, CEO of Metamarkets, a provider of interactive analytics. Driscoll sees Snapchat and others following Facebook’s playbook. Further, the social media giant has jettisoned two of its hallmark “programmatic” businesses—LiveRail and FBX—which sends a signal to the entire ecosystem.

Despite ad-tech players’ attempt to brand themselves otherwise, there’s still an association with “programmatic” which, these days, raises all kinds of questions about viewability, authenticity, fraud, sluggish page and ad load times, and ad blocking.

In recent months, RTBlog has noticed the boilerplates of myriad ad-tech companies change, almost weekly, as they attempt to position themselves as something other than providers of programmatic media services and technology. “The word carries a lot of baggage,” Driscoll said, adding, “Facebook has  positioned itself as 100% fraud-free, viewable and not programmatic.”

Snapchat is looking to follow suit. And let’s face it, Snapchat would rather follow in those footsteps and trade at the multiples of a company like Facebook than what ad tech firms are trading at.

Companies like AppNexus and The Trade Desk “have the opportunity to demonstrate the strength of their financials and that automated, algorithmic, addressable, scaleable software-driven media buying is the future. We can call it programmatic, programmable, or API-driven, but it’s all semantics and wordplay,” Driscoll noted.

But the positioning away from “programmatic” isn’t only about the public markets and industry issues. Snapchat is playing to marketers that that will be the ones to pour millions into the platform. Driscoll maintains that programmatic is actually much better for marketers than any of the alternatives, including direct-sold inventory. Why? Because every channel is bespoke and different. “Each channel  requires marketers to sign a different contract with different business rules. There are unique creative formats to deal with, and marketers can’t decipher the difference reach between Facebook and Google, for example,” Driscoll added.

And while marketers are also wary of programmatic channels, if programmatic is executed correctly, it can deliver great benefits. “It allows marketers to get to omnichannel reach and access analytics across those channels that they’ve never had in the past,” he said.  In fact, cooperation and measurement across channels is the promise of programmatic.

Add to this, the bigger the company—like Facebook and Snapchat—the more likely it is that you can set your own rules with them. These firms can sidestep open programmatic standards, which according to Driscoll, is a strategy of defection, not cooperation. He argues that marketers aren’t well-served by a strategy of defection.

Contrast this defection vs. cooperation and/or collaboration with AOL’s ad-tech strategy, in which programmatic figures prominently—even in its earnings calls, for that matter. There's no shying away from it. Plus, AOL has been the most transparent about its plans, integrations, and ad-tech stack.

The bottom line: “Regardless of how they are positioned, advertising APIs and programmatic media buying both represent the future of marketing,” Driscoll said.

1 comment about "Is 'Programmatic' Becoming A Dirty Word?".
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  1. Robert Brazys from DataXu, June 17, 2016 at 12:55 p.m.

    Sounds like this separation means it was all just marketing language to them and prehaps never truly adopted this as a principal. Closing the walls to self preserve, not to the benefit of marketers or consumer experience. 


    if programmatic is executed correctly, it can deliver great benefits. “It allows marketers to get to omnichannel reach and access analytics across those channels that they’ve never had in the past,” he said.  In fact, cooperation and measurement across channels is the promise of programmatic.

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