Commentary

Programmatic Buying: Embrace The Science But Don't Lose The Art

by Zach Rosenberg , Op-Ed Contributor, June 8, 2018

We are in an industry that is constantly morphing, with an endless parade of new topics du jour. The month of May is about the upfront season and how the networks are posturing around reduced ad loads and data-driven solutions. Previous topics profusely written about have included transparency, brand safety, holding company management, in-house buying, and on and on. The adage about how the only constant is change certainly holds true in our business.

One popular topic still worth discussing because its growth continues exponentially and its inevitability is certain is programmatic buying. In fact, eMarketer projects U.S. programmatic digital display ad spend alone will surpass $46 billion by 2019. Most marketers are now conducting at least some of their media buying programmatically, according to recent research from The Association of National Advertisers (ANA). Many are cutting out agencies in the process and bringing the capability in-house (which is a whole other troubling debate). This ties back to transparency and the quest for efficiency. It’s an unsettling trend.

The most popular channels/formats for programmatic media buying are desktop display (85% of firms currently purchase programmatically), mobile display (74%), desktop video (71%) and mobile video (62%). In 2018, we will see the rise of programmatic buying continue as it evolves into media beyond digital channels, including TV, audio and out of home. We are already testing solutions for our clients.

So how do we, as agencies, protect the responsibility of managing programmatic solutions for the brands we manage? As we evolve to a world of automation, will marketers cut us out completely, leaving our industry in utter turmoil?

The solution is simple: embrace the science but don’t lose the art. Machines will not bring the art equation to the table. The combination of marrying art and science must remain with agencies. This will be our true value, one that no one can take away from us.

What the Research Says

There is little doubt that eventually, all media forms will be bought programmatically or in some automated fashion. According to marketingland.com, “research by PWC predicts that programmatic TV will represent approximately a third of global TV ad revenue by 2021, whereas a study by Videology states the consensus among industry experts to be closer to more than half by that date.”

eMarketer research suggests that in the U.S., 5% of all TV ad spend will be programmatic by 2019. While that may not sound like a huge percentage, it represents a growth from $640 million in 2016 to $3.8 billion by next year.

Impact on Agencies

As programmatic buying filters into more traditional media types, the focus of this kind of buying will continue to be around increased efficiencies and the ability to target specific audiences, not to mention driving down price. All this leads to one day having a platform that can buy any and all media channels with, metaphorically, one press of a button. The idea of automation is appealing as it will also allow agencies to operate with a lower headcount.

As we march down this automated road, I submit that the one thing that differentiates media agencies and brings value to clients is our creativity and our ability to garner insights from data, things like attitudes and purchase intention, those softer metrics that don’t pop off the chart.

We must not let automation kill the art form that makes our industry great. There is nothing more effective than using media to amplify creative messaging and to emotionally connect with audiences; both fundamental tenets of communications planning. Let’s also not forget the importance of contextual relevance. I’m curious to know how that would work in an automated world. Until ad avails have some kind of scoring to measure the alignment with creative, this remains a solid part of the art we have. The other area is around negotiation, a critical piece of the art we bring.

If media buying truly becomes commoditized and automated through programmatic means, the future of media agencies will be under more pressure than ever before, making it easier for clients to bring the capability in-house.

So, let’s be smart and protect the art of what we do, in the spirit of bringing maximum value to our clients.

agency, programmatic

1 comment about "Programmatic Buying: Embrace The Science But Don't Lose The Art".

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Ed Papazian from Media Dynamics Inc, June 11, 2018 at 8:56 a.m.
Interesting article Zach. As I am sure you are aware, "programmatic" time buying for TV---to the extent that it exists----is a far cry from what takes polace in digital media. In TV many of these deals---mostly in local market "spot" buys-- involve only one or two or three stations and only selected time slots with humans making all of the final decisions. The TV network versions, while dubbed "programmatic" by some, are actually all single seller buys without the advertiser being able to compare what is offered with any realistic alternatives and, once again, humans make all of the decisions.

Wherther this situation will change is debatable, though it is likely that the broadcast TV networks will use programmatic to unload unsold time in marginal time periods---usually at a much higher price that what they would have offered to a human buyer---while the cable channels will do the same, but on a more extensive basis---the goal being to increase, not reduce CPMs.

Until the sellers see that there is something to be gained by working cooperatively with the buyers and allowing them---or their computers---- to cherrypick shows from their schedules, programmatic will continue to be exploited mainly as a sales , not a buying, tool. One final point.

All of this talk about improving targeting hinges on several assumptions. One, is that the brands can be freed to negotiate on theior own with the sellers---most can't. SEcond, that there is enough variation in program appeal to satisfy most advertisers' targeting needs.There isn't---especially on broadcast TV. Most advertisers would opt to target some combination of young/middle aged and middle/upper income adults, but most broadcast network and local shows aired by the stations are viewed rimarily by people aged 50+ with lower -middle incomes. As a result, there aren't enough high indexing shows to go around. The situation is better in cable so here is where I expect to see some movement in the near future---but the end result for "quality" content will be higher, not lower CPMs if brands buy on their own---in my opinion.
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