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Whats Next For Programmatic Media Buying?

Written by Kathryn | 22-Oct-2013 15:06:00

It is clear that programmatic buying has dramatically changed the way display is bought and sold, as well as the shape of a typical media plan, but what does the future hold? Firstly, a potted history of display advertising to set the scene:

Direct Website Buys

Display has traditionally been bought and sold through direct relationships between advertiser and publisher. Whilst effective, this can result in a considerable amount of wasted impressions, because not everyone visiting the website from which you have purchased inventory will fit your target audience.

Direct website buys still feature on media plans, particularly for brand campaigns or advertisers selling a very niche product, but they can be time consuming to manage due to the fact that there can be numerous publishers to deal with. In addition, they are highly targeted but the advertiser does not benefit from additional audience data that can be overlaid by ad networks or a demand side platform (DSP).

Ad Networks

Some of the other benefits of moving away from direct website buys include economies of scale and accessing a high volume of inventory sources through a centralised point of contact – ad networks.

The introduction of behavioural targeting was a significant step towards reducing wastage, and this type of targeting was predominantly sold through ad networks. When a consumer visits a website, data about their behaviour on site (time spent on site, pages visited, links clicked on, searches made etc.) is collected by publishers and used by ad networks to create a “profile†that links to that visitor’s web browser. This data is amalgamated to form audience segments which can be sold to advertisers, creating reach and scalability.

Whilst this enables advertisers to target consumers who exhibit interest and intent for the products and services being sold, advertisers are still buying a whole audience segment and the cost per thousand (CPM) is pre-defined but also flat, so they are paying the same amount for every impression, despite the fact that some consumers may be more valuable than others. In addition, the majority of network buys are blind with no transparency into publisher performance or optimisations.

What is programmatic media buying?

The emergence of DSPs has given buyers much greater visibility and granular targeting across billions of impressions accessed through thousands of websites. Therefore understanding targeting techniques and delivering optimisation based on data driven analysis is central to a successful campaign that delivers to campaign objectives.

Programmatic buying enables agencies (or clients direct) to engage directly with publishers, but impressions are bought on an individual basis and bid strategies are developed based on the value attributed to each individual impression. The control has moved from ad networks to the buyer, which has resulted in much greater transparency and accountability.

equimedia’s display trading desk, the Kaizen Platform has been built to address the ever increasing complexity in the display market. By harnessing technology, targeting and an experienced team of optimisation experts, we deliver campaigns to meet our clients’ KPIs, whether they are based on ROI or awareness.

So what lies ahead?

We have broken this down into 5 key development areas:

1.       Engagement signals will fuel re-targeting

Sophisticated re-targeting techniques such as search re-targeting and the use of dynamic creative have enabled advertisers to refine their campaigns even further, delivering the right message to the right user at the right time. Re-targeting based on engagement signals is an exciting option we have to look forward to, and will bring together traditional brand messaging with direct response calls to action.

 2.       Guaranteed inventory

There is a common misconception that programmatic buying refers to remnant inventory. However, we are seeing a significant % of private marketplace transactions taking place, enabling advertisers to set up integrated direct buys with preferred publishers to guarantee premium inventory and audience data. We expect to see this continue to grow, which will open up the real time market to more brand advertisers.

 3.       Higher CPMs

With more premium publishers joining the world of programmatic buying and advertiser adoption increasing we expect to see CPMs rise. However, we should see performance and efficiency improve in line with this, due to the continuous development in targeting strategies and platform technology.

Ad viewability has always been an important factor when considering the performance of campaigns. The Interactive Advertising Bureau (IAB)’s working definition of ad viewability is “an ad unit that is at least 50% in view for at least one second.†The technology is now in place to track viewability and the option to buy based on viewability is coming soon – clearly this should positively impact performance too, although CPMs are likely to rise in line with this as well.

 4.       Customer data will inform online targeting

We’ve all heard the buzz surrounding big data, and data management platforms (DMPs) will be the key to bringing together 1st party and 3rd party data to inform online targeting and optimisations.

 5.       Creativity

The latest IAB / PWC Digital Adspend Study states that video advertising grew 86% year on year to £135.2 million, and that in the last three years, video ad spend has increased almost six-fold (487%). Video offers advertisers the opportunity to target their audiences with visual and engaging content, and we expect to see the use of video and rich media continue to grow within the programmatic buying space, especially as more brand advertisers begin to trade in this way.

We are certainly looking forward to the exciting developments that lie ahead and to the continued success of our display campaigns!

To find out more about the Kaizen Platform, equimedia’s programmatic trading desk contact us here: http://eqi.md/19r9NDE