Where the Path of Programmatic Will Lead Throughout 2016

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Programmatic will account for more than half of digital display advertising spend globally (53%), according to ZenithOptimedia - its highest point ever - with a projected rise to 60% during 2016. 

Automatic buying has risen to dominate the digital display market in just a few years. In 2012, it only accounted for 12% of display budgets. In 2016, that figure is expected to reach a staggering 60%.

Though markets differ in terms of maturity, one thing is absolutely clear – programmatic will likely continue its significant growth as more and more ads are to be bought and sold through automatic buying channels. Let’s have a closer look into the programmatic trends that we predict will affect the industry throughout the rest of 2016.

1. CPC, CPS, CPA... but what is really effective?

An advertiser’s approach to results has changed significantly over the past two years. No longer is it sufficient to have a large-scale campaign with ad spend going into simple clicks and views. With the growing concern about ad blocking and viewability, a typical online marketer’s question will be: "is it still worth it to invest money in anything other than outcome-based channels?"

The truth is that when running a campaign nowadays, clever advertisers are consolidating their approach for more targeted performance, using performance models to pay for good traffic and optimised returns.

From an optimisation point of view, CPM, CPC or CPA payment models are no longer a true measure of campaign success, but simply a model of operation. 

To determine a campaign's effectiveness, marketers are now turning towards analytics. By measuring the effective cost of conversion and directly comparing their results from their providers using analytics tools (e.g. Google Analytics), advertisers are better able to minimise their conversion costs after every campaign, adjusting budget allocation, audience priority, and click models across their buying channels.

When marketers are more educated about automatic buying and optimisation, they are more likely to focus on high-priority targets generated by their traffic sources in 2016.

2. Complex scenarios

The real power of programmatic advertising lies in the data, which is a marketer’s best tool to achieve and reach a complex segmentation of their audience. Programmatic makes it possible to get to very specific user segments, for example it can specifically target a person who has visited a website more than seven days ago, but had previously bought a product from a specific category, then deliver customised ads based on that information.

This kind of approach lends itself to more long-term marketing strategies, targeting customers online long after they have left the short-term conversion timespace. Retargeting activities of various kinds will continue to rise as they contribute to new complex strategies that involve a long-term, customer retention approach.

3. Real-time bidding, real-time analytics

The promise of programmatic advertising is not only efficiency, but also flexibility. It allows marketers to adjust their campaigns on the fly to optimise towards channels that work and lessen channels that don’t. 

However, true 'flexibility' is just a buzzword if it’s not fueled by data. The inflow of advertising funds into the programmatic ecosystem means a rapid development in analytics, the quality of data delivered and, most importantly, their actionability by marketers and their performance tools.

4. Mobile as a top-tier sales channel

Programmatic was originally used to buy desktop PC banners. As mobile usage continues to dominate, scope of behaviours common with the majority of users gets wider, the process has naturally expanded to mobile. 

In 2016, buyers are expected to become more comfortable with making a purchase from their mobile device, making it an up-and-coming sales and marketing channel. According to the new eMarketer predictions, global mobile advertising market will hit two significant milestones in 2016: first, mobile will surpass $100 billion in spend and second, it will account for more than 50% of all digital ad expenditure for the first time ever.

If programmatic is expected to rise in usage among marketers, then 2016 will also see a rise in budgeting for mobile advertising, as the supply of mobile ad space available rises.

5. Multiple retargeting solutions

During the last few years, a large number of retargeting tools including Google Remarketing, Facebook Dynamic Product Ads, and different specialised RTB tech companies like Criteo, AdRoll, RTB House have appeared on the market. Each of them offers various benefits in the fields of display, email retargeting and in-app tools, resulting in a wide array of tools at a marketer's disposal. In 2016, advertisers will look for advanced campaign results with retargeting strategies on multiple providers able to offer:

• Wider access – various retargeters have different kinds of access to user subgroups and different strategies for placements, creative capabilities, algorithms and goals. 
• Maximum effect at optimised costs – competition between providers is one of the only ways to ensure that retargeters are operating at their maximum. In 2016, using two or more retargeters will be a frequent strategy.
• Flexibility in conducting parallel strategies – each retargeter offers unique approach to goal strategies. In 2016 marketers will be more willing to determine mid and long-term display marketing strategy and select a provider accordingly whether the desired outcome is traffic volume, sales quantity or sales value.

As marketing strategies are becoming more sophisticated and marketers become more familiar with programmatic, the question is now not whether we should use automation, but how to extract its full potential. This year will be one for marketers to move towards optimisation and analyse their strategies to achieve better, targeted success across online campaigns.