Why Mediapalooza is just the tip of the global programmatic iceberg

Programmatic is certainly a factor in Mediapalooza – the $26bn in media spend up for review – but Infectious Media’s Martin Kelly explains why its impact is felt beyond this into the way in which brands and agencies structure their organisations globally.

Led by the global brands, there’s a cool, and unprecedented, $26bn of media spend up for review and there’s little doubt that the shift to programmatic ad buying is a factor in this – but not necessarily in the way people might believe.

It’s easy, maybe even lazy, to put programmatic’s role in Mediapalooza down to brands becoming sick of the agency trading desk model and are (a) looking for a better deal and (b) more transparency about the financial value chain.

This conclusion is borne of a mind that thinks programmatic’s relevance is solely limited to serving digital display ads. This isn’t the case and is at the heart of why programmatic impacts the way in which brands and agencies need to operate globally.

Programmatic is driving a seminal shift in advertising from a broadcast media world – hit the biggest number of people you can and show them all the same message – to one where 1-to-1 audience targeting is done at scale. This is something advertising has always aspired to but simply never had the capability to be.

Ultimately, it will join up mobile, desktop, social, TV, outdoor and radio so its impact will become increasingly fundamental to brand, customer acquisition and customer relationship management objectives.

A Harvard Business Review article Is Programmatic Advertising the Future of Marketing? summed it up nicely: “Soon, every screen will be an addressable medium – that is, each will be individually targetable by device and, in many cases, down to a specific user; and interactive displays will not only deliver ad messages but also track consumer response.”

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Consequently, businesses need to future-proof themselves against this growing impact.

After accepting the realisation that you have to act differently in this new world and that the operating model of brand and agency is changing, the first thing to do before you can make decisions about how you’re going to restructure is education.

That is, to properly educate yourself about the potential areas programmatic can impact (I’ve given you a brief head-start) and in what ways. After all, the first part of any approach is to be able to know what you might want and why. Here are four questions I’d recommend that advertisers start to ask to make sure they are ready:

1. What’s our model going to be for programmatic – agency vs specialist vs in-house?
2. What does our partner’s programmatic team look like, do they have the right skills for now and the future?
3. What do I need to do to get ready for programmatic, are we structured in the right way to allow our partners to do their job?
4. What technology do I need to get this right?

Secondly, marketers need a change in mind-set about how to approach advertising. The HBR article continues: “The result is a new era of marketing accountability, in which advertising ‘budgets’ will have turned into marketing ‘investments’.”

This is a sea change in mind-set from thinking about “this is what you have to play with,” to “this is the return we expect.”

HBR’s vision for the programmatic future also centred on the impact for marketing organisations, “instead of setting advertising budgets on quarterly cycles, marketers will launch ad initiatives whenever opportunities emerge, and they will optimise them for efficiency and effectiveness on the fly. The ‘budget cycle’ is already a quaint idea. It will soon be a thing of the past.”

Consequently, marketers will need to re-asses the type of people they have internally – this could be more ‘entrepreneurial’, creative or reactive type people but certainly not those who are strong and comfortable in creating yearly marketing plans. Companies will also need to restructure processes and teams, so that they’re optimised to this type of ‘reactive’ model.

Thirdly, as brands’ data is at the heart of all this, the brands themselves will be more heavily intertwined in the process than ever before and will look for different things from their agency partners.

Brands will consider if they should be working with specialist agencies, should they consider doing some aspects themselves, do they want to work with their existing agency whilst they skill up?

Consequently, agencies will also need to re-assess the type of people they have and the processes in which they’re involved. There’ll be much more emphasis on data management skills, data science teams, open reporting APIs – the agency of the future is certainly going to look very different, one where business consultancy, data and technology skills are all essential.

So, this latest wave of media pitches is really just an acknowledgement by the most forward thinking brands that the world is changing fast and there will be an impact on their business which, consequently, impacts the agency. Simply buying media is not the right answer and is only the tip of the iceberg in an increasingly complex environment.

Martin Kelly is CEO and co-founder of Infectious Media