Industry investments in programmatic buying continue to grow at a rapid pace, with no sign of slowing down this year. AdRoll pegs this
increase at 66% in its State of the Industry 2016 report, while eMarketer thinks this figure falls
somewhere around 50%, depending on whether you’re talking about desktop or mobile ads.
There’s a good reason why marketers have jumped on the programmatic bandwagon and plan to spend more. The programmatic channel offers a highly
efficient way to reach audiences at scale. That’s certainly good enough if you’re a direct-response advertiser and you care less about where your ads run, as long as you get people to
visit your Web site and buy. But for brands looking to build awareness and drive engagement, inventory quality and relevance matter a great deal. Brand-safe often isn’t good
Unfortunately, brand advertisers must
make a difficult tradeoff today when it comes to exchange-based buying: Enjoy the cost efficiency and scale of an open exchange, but settle for low quality content and often irrelevant placements --
OR, hand-pick well-known media brands within the confines of private exchanges and settle for higher costs and reduced scale.
The problem is that this tradeoff rests on the false assumption that Web sites still drive
the bulk of content discovery. Thanks to the rapid growth of mobile, social, and content aggregators people simply don’t visits sites directly anymore. More than 25% of publisher traffic is
driven by content sharing on Facebook alone. Consumers check their mobile phones more than 150 times per day, jumping from article to video to article from various feeds. This means that traditional
definitions of premium and relevant content -- typically defined by Web sites or groups of top-level site domains -- are increasingly unhelpful.
Say you’re a beverage brand who wants to target female, music-loving
millennials and Beyonce’s new album is the buzz of the moment. Targeting the music category on exchanges is more likely to get you on sites like downdloadfreemusic.com, rather than next to
relevant articles about the new release. Ditto for targeting keywords like Beyonce, if it was even possible to predict the dynamic interests of this audience in advance. You could also buy
premium entertainment or music sites via a private exchange, but you’d pay more and miss out on hundreds of other relevant placements. For example, if CNN broke a huge story about a relevant
artist, the article may spread like wildfire, but it’s unlikely you would have targeted CNN.com or this audience.
The good news is that the open exchange model may actually be the perfect approach to help address the continued hyper-fragmentation of consumer attention (and relevant content).
After all, programmatic platforms excel at delivering highly targeted advertising at scale. They just need the right data sets. And the massive volume of content sharing and commenting happening right
now across the Web generates hundreds of millions of valuable data points every day. This data can be mined to understand precisely what content specific audience segments are talking about and
sharing in real time.
By better integrating this data into buying decisions, programmatic platforms can
finally break the trade-off for brand advertisers and deliver private exchange quality and relevance, with the scale and cost efficiency of an open exchange. For the first time, brands can enjoy
real-time relevance alongside real-time audience -- and, most importantly, better align their advertising approach with the current reality of audience behavior.