Is programmatic ready to take the next step?
Prior to the revealing of results for a new benchmark study examining the impact of programmatic and media planning, Jonathan Gillespie, founder of ListenUp Media, exclusively showcases the qualitative part of the findings.
Eight years ago I was sitting at Google, having recently joined, reading through a plethora of material to learn my new trade. It was the steepest of learning curves, with 15 years of traditional media experience initially of limited value in the shiny new tech world.
These were the days when Google had Searchworks, Latitude and Summit Media (an agency run from Her Majesty’s Prison Wolds as a rehabilitation programme) in their top 10, and not a single “big” media agency.
Scanning a mountain of internal literature, I came across a comment from Eric Schmidt. He had (has?) a binary view about advertising. Talking about Gucci, he couldn’t understand why this fashion brand was not putting all its money into paid search – based on the premise that it could attract a customer for a fraction of the price it cost to advertise in women’s magazines.
My old world media head silently cocked a snook at this naivety. Brands like this don’t just exist; they build, they nurture, they move from need to desire through years of positioning, investment and downright flirting. People search out brands because they are just that – brands. They have earned their place in our consciousness and our hearts.
Flip forward to today – the beginning of 2015 – and I cannot move away from the notion that my snook cocking is being fundamentally challenged. Yes, paid search attracts significant brand money, but it remains chiefly the powerhouse of performance and e-commerce. It was Display that was supposed to be the place where brands would live and thrive, but somewhere along the conveyor belt of infinite banners and buttons the consumer got lost.
And then along came programmatic. Its premise is to take behavioural techniques, bundles of lovely fresh data, automation of online trading at phenomenal scale and a bit of sizzle with the promise of real time advertising, to create advertising nirvana. The performance market lapped it up, to proven success.
At the end of last year, I wanted to know if programmatic was ready to take the next step – to work for the brand advertisers who require not just a cost-per-acquisition, but a “cost-per-relationship”.
To this end I approached Radium One, a leading player in the ad tech world, to partner with my consultancy, ListenUp Media, in a UK-wide benchmark study into the industry’s thoughts around programmatic. They loved the idea of raising the debate, and wholeheartedly agreed.
(The online survey remains open, and would greatly benefit from your input. There are two entry points depending on who you are: if you are an agency or publisher; if you are a brand advertiser). Radium One will be announcing initial results at MediaTel’s (invite only) Year Ahead event on 14 January.
At the same time we wanted to get a view from the bridge, from the key leaders in the media industry, people who are paid to define the future not follow it. In a round of face-to-face interviews with CEOs, commercial heads and marketeers at brand advertisers, agencies and large media owners, we found the following key threads around programmatic and media planning that will most likely shape the immediate future of automated, data-led, probably real-time, media investment:
1. Environment remains important, even when audience driven programmatic is available – Brand advertisers still believe in reflected glory (the medium is the message), e.g. TV delivers brand fame and VoD delivers campaign extension (and maybe in the future behavioural segmentation). Issues around brand safety, viewability and click fraud are reinforcing this credo.
2. The “flight to quality” – Brand safety in its wider sense is not just about ads appearing in inappropriate environments, e.g. IS beheadings; it will be about the guardianship of the brand, understanding and defining where bought media is exposed to consumers. For brand advertisers, the allure of cheap blind networks should have a warning sign on it. Private marketplaces will increasingly facilitate this flight as they provide quality at scale.
3. In supreme contradiction – The “Buyification” of media is real:
a. Brand advertisers are seduced by performance metrics
b. Frictionless trading is inevitable, and with that the commoditisation of media.
4. Digital governance issues (brand safety, viewability and click fraud) remain critical – a clear and present danger. There will be differing levels of rigour, but click fraud will remain an outstanding issue. The others may just become the “cost of doing business”.
5. Out-of-market is to be a key battleground – a KPI for brand marketing is to influence consumers not ready to buy a product. The feeling remains that broadcast wastage can still deliver that additional value, re-targeting cannot. Rewarding “last click” strategies is not necessarily wise for brand advertisers.
6. The supply chain is overly complicated. If an ad tech provider can deliver the ultimate triple play (DSP, DMP, Data ownership) they will provide clearer value in the supply chain, whilst also creating more opportunity for premium publishers to receive a higher percentage of investment (the fact that sometimes as little as 40% of a client’s money reaches the publisher has been a source of no little frustration).
7. Whilst programmatic remains primarily an investment vehicle, concerns will remain around arbitrage and ‘opaque’ practices.
8. Data ownership: Is third party tracking under threat? Bigger publishers have plans for first party data. There is a sentiment that if you don’t have any ownership in the data, you don’t get to make profit from it.
9. Brand advertisers – current digital investment strategies can be immature and chaotic:
a. Infinite accountability – sometimes brand advertisers forget they are not performance advertisers
b. Clients do it and move on so quickly
c. “CMO’s teenage son or daughter” is the new “chairman’s wife”. Subjective influencers may be driving decisions.
d. Fashion can dictate investment
e. “Clients drove agencies underground” – the old world was about advice about media channels, now it is often about revenue distribution first, plan second. It can lead to poor client decisions and increased agency commerciality.
Sure, there are contradictions in these opinions, but this currently remains an immature ecosystem with different interest groups. It is not yet all played out, but it is clear that 2015 will take it a long way further.
It is inevitable that a media industry which has historically based planning criteria on media brand and environment will be challenged by the logic of programmatic buying: the notion that it really doesn’t matter where the impression is served; that it is all about the impression itself; that the medium really is no longer the message.
We will be working through the empirical results of the benchmark study, and will be sure to be back on Newsline to report back. In the meantime, do please contribute to the study via the links above.