Putting programmatic ad management in perspective

ctovision.com

Editor's note: Automating digital media trading can bring major operational efficiencies, but we’re only at the start of the curve for programmatic ad management which to date accounts for just a small fraction of overall marketing budgets. So there’s no need to panic if you haven’t got to grips with it yet, says Henry Rowe, EMEA Managing Director of Theorem- bg

From the current hype it would be easy to conclude that programmatic advertising management is the panacea for maximising impact in this fast-paced, multifaceted digital age. This can fuel a temptation to chase each new technology and every new feature, rather than focusing on business requirements.

Popular thinking suggests that digital advertising opportunities come and go at such speed that only technology can keep ahead - streamlining the decision-making, maximising exposure and making budgets go further. And that’s what some parts of the ad-tech industry would like us to believe.

It’s worth stepping back from the big numbers we hear so often, and consider what the real story is.

Of the billions of pounds of media outlay in the UK each year, programmatic digital display advertising accounts for just 8% (source: Theorem). If we’re talking about marketing communications more broadly, that figure will fall below 1%. So, while this latest trend in ad tech is exciting and growing extremely fast (it is arguably the most important development in media trading for 10 years), it should be kept firmly in proportion. Even if you’re highly a sophisticated advertiser, your use of programmatic techniques for managing your digital display spend is likely to account for only a sliver of your total communications budget.

For now, at least. We’re still at the very beginning of the adoption curve for holistic programmatic advertising management, whatever some technology suppliers may suggest to the contrary. TV, posters and radio are beginning to convert to programmatic automation, yes, but are years behind digital display.

Let commercial aims drive decisions

In the meantime it’s important not to lose sight of the bigger picture: ie what an investment in programmatic techniques might achieve for your business.

Although algorithms can help make certain processes more efficient, they will never be a replacement for good insight from human decision-making. Advertising will always remain a combination of art and science. So if a specialist technology provider is promising the earth with their ad-tech platform, using phrases like ‘plug and play’ and ‘seamless integration’, buyer beware!

Technology can help, but it should not be the starting point. There is fantastic innovation taking place, manifested in the thousands of specialist applications that have flooded the market. But many of the suppliers are young start-ups backed by private equity or venture capital, which means their primary motivation is to build market share – often within one discrete part of the market.

This short-term ambition can conflict with a brand’s aim to grow its profile, get closer to customers, differentiate its message, and win new business – a more strategic, long-term requirement that a quick technology fix can’t deliver. So brands and media owners need to beware that they aren’t being distracted by short-term, or siloed, features; that if they are investing in programmatic tools, it will have the intended commercial impact – as determined by their wider business strategy.

The market noise and jargon-heavy language around current ad tech is distracting too. All too readily, even the most astute commercial directors and technology managers can find themselves being persuaded that the key to future advertising success is the ability to “connect a DMP [data management platform] to a DSP [demand-side platform] and then to an SSP [supply-side platform], using RTB [real-time bidding]!”. This kind of talk needlessly overcomplicates a very simple premise – that we should be focusing on business objectives rather than technology features.

There are other good reasons not to blindly jump on the bandwagon. Theorem’s bespoke market data shows us that, on average, media owners are already juggling tools and technologies from 20+ different vendors. The more they keep adding specialist tools into the mix, the greater the integration challenge and the cost and work in maintaining all of those systems. A further complication of a fast-moving but nascent market is that suppliers can go out of business or pivot away from their original focus. Choose badly, or get in too deep, and it could mean a lot of unpicking later.

Staying anchored

So what does good look like? If programmatic ad management has appeal as part of your wider strategy to maximise market exposure for a brand – and there’s a good chance it will - keep things simple and opt for a simple technology stack with longevity.

If programmatic ad tech is likely to grow in importance in your organisation, you’ll want to build your activity not only on a platform with the best chance of lasting the distance, but also one that is malleable and adaptable.

Getting good advice is paramount, so that any investments are made as part of a holistic and continuously developing approach to advertising and what it’s trying to achieve – one that also encompasses traditional channels, is informed by deep customer insight, and is tailored to each audience.

Without this fuller context, digital spending won’t reach its full potential however automated or ‘real time’ its management.