Dispelling the myths of programmatic

Varying definitions, exotic sounding acronyms, buzz words and new technology: programmatic trading is bound to confuse, says Improve Digital’s Sue Hunt – but it really doesn’t need to be so complicated…

2014 is already in full swing, and with the recent IPA Bellwether report pointing to a significant uplift in marketer confidence and a buoyant year ahead, there is an expectation that the programmatic trading sector will enjoy a significant proportion of that growth.

We saw 20% of total display spend flowing into the programmatic space in 2013, and at Improve Digital we have a firm expectation that this percentage could rise to 50% by 2015. Yet there are still some barriers to achieving that potential as the sector matures.

Transparency, technology and talent summarise the core challenges we still see and hear on a regular basis – and were debated at MediaTel’s recent Automatic Trading event.

Varying definitions and understanding of what programmatic trading actually means, the tendency to rely on abbreviations and buzz words that over-complicate the technology and space, and the changes this trading method inevitably means for our people, are all creating confusion and ultimately constraining the collective growth of our industry.

Transparency

Whether referring to common understanding of the programmatic industry and removing the layer of jargon that creates opacity, or the confidence of the advertiser as to how and where their brand is represented; both challenges remain and are perhaps the most significant barrier to growth.

Our objectives as an industry should be quite simple – find the right audience and/or environment for the advertiser via the most efficient route.

Whether that be through automation of workflow, maximising real time bidding (RTB) technology to increase speed to market and relevancy of messaging, or application of data and insights to accurately reach the target user – most likely, a combination of all.

Conversely, the publisher (or seller) simply wants to feel ownership of their content and audience, and receive a fair price for the value they deliver.

These concepts are not new and do not need to be layered with tech jargon.

The role of technology is simply to enable these objectives, providing control and transparency to the end customer, simplifying workflow and automatically brokering a fair market price – thereby building the confidence needed to increase trade.

Technology

In a sector where technology and platform are central to trade, it is somewhat inevitable that complexity and therefore confusion creep in.

We have all seen an abbreviation we neither understand nor feel comfortable to ask to be defined. I’m sure many of us have stared at a lunarscape of cluttered company logos we can barely read, let alone claim knowledge of.

Dare I say there are still a smattering of players who gain from adding complexity and confusion to the programmatic space?

The core model of programmatic, however, is quite straight forward – an auction-based trade simply analogised as eBay for advertising.

The seller has a platform (likely an SSP – supply side platform, or ad exchange) which auctions an ad impression to the full range of connected buyers. The impression is defined, by size, by website, by audience, and with a minimum price.

The buyer has a platform (likely a DSP – demand side platform) that connects to the seller. The buyer defines what they are looking for, by size, by website, by audience, and how much they are prepared to pay.

Real time bidding is simply the connection between these parties, that allows the trade to happen, in milliseconds.

Yes, there are additional technologies that facilitate greater insight and optimisation in this process, and there are nuances of additional possibility across platforms and devices such as video, mobile and tablet, but the core concept should not be complicated to such a degree that it alienates or confuses.

Talent

The debate of man vs machine has been with us through the centuries. Digitalisation alone has constantly and consistently changed the media world across television, radio, print and online through recent decades.

The rapid shift to programmatic advertising within this is very much a natural evolution, bringing long overdue efficiencies to workflow across the buying and fulfilment of advertising campaigns.

Much as many traditional media organisations are happy to consign the faxed IO to history and reduce the time spent negotiating and trafficking mainstream campaigns, the speed of transition to programmatic has undoubtedly created a fear of obsolescence.

The reality is the shape and structure of our teams is changing, but our need for talent is not reducing. Specialists are in high demand – whether they be focused on the bespoke sponsorship opportunities and creative solutions that programmatic is unable to fulfil, highly skilled optimisation specialists or data analysts that make sense of the information the machine aggregates, technical gurus that make sure all the wires connect and the end user understands all that is available – and ultimately as human beings, we are still naturally programmed to spend time and energy on the relationships that fulfil our needs.

Our people play a critical part in building the trust and transparency required to facilitate trade, overcoming perception and translating the machine into dialogue that resonates for all.

Sue Hunt is managing director of Improve Digital, an independent provider of real-time advertising technology.

See also:

Event report: Automated trading ‘inevitable’ for all media.

Event report: Transparency ‘still a barrier’ to automated trading.

Dominic Mills: How to make the Math Men squirm: ask about the ‘T’ word.

Marco Bertozzi, VivaKi: “Am I allowed to rant?” Trading desks debate transparency.

Bob Wootton, ISBA: Transparency at a premium in digital age.