Programmatic advertising is growing, is still exciting, but has ultimately frustrated thus far.

But why, and how can agencies fix it?

I picked up some key points from Pete Hanford, CRO at Infectious Media, who spoke recently at Get With The Programmatic.

Where has it gone wrong?

Strategy

Hanford described programmatic as "often a mysterious line on a media plan. Instead of media being traded over a phone, it’s traded over a DSP" (with little change in thinking).

This picks up on a couple of themes. Firstly, some agencies don't put enough effort in to understanding the developing strengths of the medium, how it can be used effectively within a broader strategy.

Without communication between creative and media specialists, content will not be good enough to engage audiences, no matter how well targeted it is.

Additionally, advertisers need to fight for transparency when planning. Programmatic by its nature requires campaign feedback and should improve incrementally over time.

In order to improve effectiveness, brands should have oversight of data and be asking about which ads are performing, in what context and for which audience segments.

Everything from frequency capping to attribution models, fraudulent traffic to cross-device tracking - this should all be on the table and at the fingertips of advertisers' agency partners.

Programmatic shouldn't be an add-on to media plans simply because it's the buzzword of the moment.

Skillset

Many agencies are "trying to shoehorn old school skills into a world of real-time data," Hanford commented, adding:

The skillsets at media agencies are not right. I spoke to one advertiser who had a weekly optimisation call, talking through plans for next week, and when they drilled into programmatic, the agency didn’t have the answers.

This point was tackled in an agency panel earlier in the day (see a full summary here). The programmatic market has grown so quickly that talent is unable to keep up.

Data analysts need to be clued up as to campaign budgets and creatives need to understand the capabilities of the technology.

Bigger agency groups such as Publicis and Havas have already established education programmes to bring everyone up to speed.

Agencies need 'a particular set of skills'

neeson

Tech approach

Many speakers at Get With The Programmatic referred to the enormous number of tech solutions in the market. How is one marketer expected to navigate the Lumascape, or even one hall of the eight used for Dmexco?

Too many programmatic tech vendors offer, in Hanford's words, "black box, off the shelf, one size fits all" solutions.

That needs to change with customisation offered to advertisers. 

The agency of the future

Hanford asserted that "agencies know they have got it wrong and are trying to rebuild."

"We've seen it," he continued, "with GroupM buying Essence (which is 'built on a transparent buying model and touts a custom planning and campaign management system'), as well as The Exchange Lab (a meta-DSP solution that affords advertisers choice)."

Dentsu Aegis has also bought smartly, snapping up Merkle for its 'data-led and real-time capability', and Accordant for its talent.

CEO of Dentsu Rob Horler told AdAge: "For us, acquiring Accordant is not about buying scale, but acquiring talent and capabilities in an emerging space."

So, what do these agencies of the future look like. These were Pete Hanford's three criteria:

1. Built for programmatic

The agency must be 'built for programmatic', with transparent commercials, data driven strategy, and programmatic aligned with other media.

2. Specialist skills

Specialist skills means processing power not buying power.

And computers are only as good as those using them - the data scientists, the optimisers, and the analysts. 

3. Tech and data at its core

The agency must be multiplatform (agnostic), including actionable data, and be customised, bringing more efficiency for the advertiser.

Ben Davis

Published 23 September, 2016 by Ben Davis @ Econsultancy

Ben Davis is Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Comments (2)

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Matt Lovell, Head of Customer Data, Insight & Analytics at Eurostar International Ltd.

Thanks Ben - really useful article.

The other piece of the jigsaw that is still missing though is accountability. Unfortunately, most programmatic agencies still make their money based on a % of the spend of a client rather than by driving their client's needs in the way of incremental sales or awareness and engagement. As a result, the metrics reported are flawed and poor quality inventory is promoted based on a volume argument when engagement levels are poor and all that is being reported is the agency's ability to cookie users.

It reminds me of the article from a few days ago. It isn't just clients that need to focus on their purpose but also agencies and unfortunately in the programmatic world, this just isn't happening - https://econsultancy.com/blog/68254-the-customer-experience-revolution-requires-advertising-with-purpose/

almost 2 years ago

Ben Davis

Ben Davis, Editor at EconsultancyStaff

@Matt thanks for the comment, it's a neat summary of the issue and one we can only hope is partly tackled by agency restructures.

almost 2 years ago

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