While major agencies have embraced and invested in programmatic buying, new research from Strata Marketing suggests that small and mid-tier shops are still hesitant to commit themselves fully to the process. While several factors are cited, none is so apparent as the confusion around what “programmatic buying” actually means.
According to a new agency survey by Strata Marketing, only 6% of executives felt comfortable buying media programmatically, while 46% reported they don’t use it. Slightly more than one-third of agencies indicated they are undecided about whether they trust programmatic buying to execute their ad orders.
The biggest issue uncovered, however, wasn’t a lack of trust, but a need for an accurate and unified definition for programmatic buying. This confusion was indicated by almost 60% of the survey participants.
Whatever smaller agencies may think of programmatic, brand advertisers are becoming increasingly keen on getting involved. To help realize efficiency and benefits of programmatic buying at the agency level, the industry needs to turn it from a buzzword into a standardized term. Educating smaller ad mid-sized agencies on the benefits will also go a long way toward boosting the adoption rate.
Defining Programmatic Buying
Let’s clear up the confusion!
Programmatic buying is simply the automated process of buying or selling media at scale. Due to the growing complexity and scale of the advertising ecosystem, several programmatic systems were born to help agencies manage systematic buys that would be impossible without this new technology. Common forms include:
- Programmatic buying via real time bidding (RTB)
- Using one platform to buy across multiple exchanges
- Using Audience networks to buy audience segments
- Programmatic site retargeting
- Data driven for technology or data (1st or 3rd party)
Programmatic systems allow publishers (via supply side platforms or SSPs) and agencies (via demand-side platforms or DSPs) to conduct large-scale transactions in a mutually strategic manner. While publishers can maximize the value of their inventory, programmatic buying allows agencies to strategically purchase impressions that reach the right audience, placement, or content category to ultimately increase their campaign ROI. Mark Bye of Bizo gives a great explanation of the symbiotic relationship between SSPs and DSPs.
Agency Adoption Challenges
While Strata’s study was telling, the confusion around the ‘Programmatic definition’ is not the complete story. Small to mid-sized agency challenges include:
- Education/Expertise – the ability to lead strategic dialogue with agency clients
- Remnant perception. This is changing, however, as publishers reduce channel conflict, win higher fill rates/eCPMs for premium inventory, adopt private exchanges etc.
- Measurement – new metrics outside those of traditional TV or radio channels can be an issue for some agencies.
- Brand safety – can programmatic buys provide proper contextual placements? Yes, Altitude ACCESS™, for example, eliminates brand safety concerns with robust contextual safeguards that can provide in-target guarantees
Make no mistake about it, the age of programmatic marketing is upon us, with IDC forecasting nearly $14 billion in real-time buying spend by 2016. This exponential growth is reason enough to pay attention. But the possibilities of programmatic marketing are equally impressive, with an additional $66 billion forecasted in 2016 for programmatic marketing platforms
It is time for brands and their agency partners to make the critical changes to skillsets, marketing processes, and technology for economic advantage and to achieve true omni-channel, customer-centric marketing.
Get Started with Programmatic
Entering the programmatic space as an agency can be overwhelming… but it doesn’t have to be! Altitude Digital’s ACCESS™ Campaign Delivery Platform technology solves the challenges of executing programmatic campaigns. With our team’s support, you will instantly see the ROI benefits of buying programmatically. Just reach out if you want to start crushing your campaign performance today!