Here are five things marketers should know about the state of programmatic today.
It’s still confusing
The number of programmatic platforms has exploded in recent years and the terminology can make a marketer’s head spin. RTB, SSP, DSP, DMP, and so on and so forth.
In short, programmatic is acronym hell, necessitating programmatic glossaries. Given this, it’s not surprising that a 2014 Forrester study found that only 23% of marketers understood programmatic buying. A year later, more than half of marketers still rate their programmatic knowledge as very poor, poor or average.
While many marketers are working to get up to speed, the pace of change and innovation means marketers can never assume that they have programmatic figured out.
For example, with programmatic increasingly being used to transact video inventory, marketers are being challenged to learn the nuances between buying display inventory and video inventory programmatically.
Data is critical to making it work
If programmatic is a car, data is the fuel that makes it run. Having enough quality data can make or break a marketer’s programmatic efforts and data comes from a variety of sources.
Second and third-party data can be very useful, but for many marketers, collecting and putting to good use first party data – the data they gather from their own websites and online platforms – is absolutely critical to taking advantage of the programmatic opportunity.
Because of the importance of data, data management platforms (DMPs) are taking on an increasingly prominent role in the programmatic space as well over half of marketers believe DMPs are key to future of programmatic marketing.
Programmatic inventory is increasingly diverse
While most programmatic inventory was remnant display inventory in the early days, that’s no longer the case. As noted above, programmatic is being extended beyond display to video. And through a growing number of private exchanges, select marketers can programmatically purchase publishers’ best inventory.
For marketers, this means one thing: it’s more and more difficult to ignore programmatic because so much inventory, and so many different kinds of inventory, are available through programmatic sources.
It can be expensive
Marketers expect programmatic to deliver greater efficiency and reduce costs, but as AdAge’s Alexandra Bruell recently discussed, there are a number of hidden costs frequently associated with programmatic that eat up all of the savings marketers can realize on programmatic inventory itself.
These costs include labor, agency and platform fees, R&D and errant ad buys. Depending on the marketer and agencies or platforms used, programmatic can, according to Bruell, make programmatic “more expensive than ordering print ad pages or TV commercials through insertion orders and other routine methods.”
Obviously, this doesn’t mean that programmatic isn’t worth additional cost in some areas, but as marketers get more sophisticated and realize that programmatic is not a panacea, they are increasingly looking to ensure that unnecessary costs are minimized or eliminated altogether.
Programmatic is the present and future of online advertising, sort of
Tens of billions of dollars of ad inventory are now bought and sold every year through programmatic platforms globally. It’s virtually impossible to find a major publisher, ad tech firm or agency that doesn’t have some programmatic product or service on offer.
Clearly, programmatic is already a very important part of the modern-day online ad market, and arguably it still has a long way to go before it realizes its full potential. But that doesn’t mean that programmatic is everything.
There will continue to exist a market for non-programmatic online advertising and while programmatic will likely shrink the size of that market over time, it’s still going to be large enough that marketers will need to look beyond programmatic to be successful online.
You can learn even more about the future of marketing at our two day Festival of Marketing event in November. Book your ticket today!