Programmatic 2020: Man and machine
Huge changes stand before us, writes Improve Digital’s Jonathan Di Sapia – and the smartest publishers are investing now to face them.
At the end of June, Improve Digital hosted its annual Publisher Summit during Cannes Lions, gathering 60 industry leaders from across Europe to debate ‘Programmatic 2020: Preparing The World Beyond RTB’.
The reason for this theme: put simply, programmatic as a sales discipline has arrived and is here to stay. So it’s crucial to address how we prepare for a future when everything will be programmatic.
The facts speak for themselves. During 2015, 50 per cent of online display ad spend will run through programmatic channels, and by 2018, $50 billion of digital ad spend will be invested programmatically (source: Magna Global).
In the UK more specifically, the recent IAB ‘Media Owner Sales Techniques’ study revealed almost half of online display ads in 2014 – worth just under £1 billion – were bought through programmatic technologies. And with the rise of video and mobile ad spend, it estimates around 70-80% of all digital spend will be programmatic by 2018.
Programmatic is no longer a solution for unsold inventory. Programmatic is leading the sales revolution and by 2020, I believe everything will be sold programmatically.
And with this change ahead, we are seeing many of the leading publishers preparing themselves and investing in order to have the right people, process and tools in place to monetise their inventory at a premium programmatically.
Others are still investigating, testing and talking about how to make the shift to programmatic. I recently heard a stat that while 50 per cent of UK publishers regard programmatic as an opportunity, the other 50 per cent see it as a threat.
Of course, adopting programmatic is a big undertaking, but surely the biggest risk now is to not do anything at all.
One of the main threats from a publisher perspective I’m still picking up on is a fear of the technology. It’s the ‘man versus machine’ debate we have been debating for some time. So we need to start talking about it in terms of ‘man and machine’ and how the two work together.
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Firstly, there is a fear that a technology provider will literally ‘turn on a switch and leave them to it’. However, while programmatic is an automated approach to advertising sales, the services component of any SSP is as important as the technology they provide to their clients.
It’s choosing the right partner that is key. As the yield challenge becomes more complex, they must be a trusted partner, helping publishers reconceive their sales strategy, tackle the emerging channel management challenge, and continue to guide and support the client on an ongoing basis.
Further, that partner needs an entire demand services team, to establish and manage deep relationships with partners on the buy-side. Of course, SSP technology does a lot of the work, but it needs the humans to identify and shape what that work should be.
And one partner is also all that is required. I see instances when a publisher has as many as six revenue partners, all working to monetise the same inventory.
This leads to the waterfall approach which in our experience, drives the ecpm per impression down. Choosing a partner that can provide a more holistic approach – where video, display, mobile, in-app and so on, is monetised through one platform – is smarter. Buyers compete through one single point, at the same time, in real time – with every impression valued at the highest possible price.
Secondly, there remains a fear that the technology will make a publisher sales team redundant. But as well as having an SSP with an excellent service team, a human element will always be vital at the media owner.
Certainly, the sales team of the future will be a very different one from today, but a team is still required to take the proposition to market.
And as we work closely with our publisher clients, we are noticing this change. Teams are evolving with the hiring of people who have a deeper understanding of how programmatic technology works and the overall programmatic ecosystem.
Indeed, the ‘people’ element came up over and over again at our Cannes summit, with guests acknowledging the importance of renewing their sales operations. One delegate summed it up well when they described the sales team function of the future as: ‘Meet, greet and close will change to analyse, understand and advise’.
Big change is ahead. The future of advertising sales will be very different to what we know today, and nobody knows exactly what the landscape will look like by 2020 and beyond. But what’s certain is that everything will eventually be sold programmatically and man, as well as machine, will play a big part.
Programmatic 2020 is coming – and the smarter publishers are investing now to be ready.
Jonathan Di Sapia is UK manager, Improve Digital