Chalk board reading, "Tomorrow, tomorrow, tomorrow, NOW, yesterday"
By Anthony Loredo Oct 7 2014

The Age of Programmatic is Now: Centro and Forrester Weigh In

Exchange-traded spending will account for a nearly 1/3 of U.S. display spend by 2017, according to research from industry analyst firm Forrester. This and other predictions on programmatic are available in Centro’s conversation with Forrester, view it here.

The exact range of how large the programmatic pie depends on who you ask. Some say it may even be as high as 80% in a couple of years. What’s clear is that programmatic media buying will be in high demand for brands, agencies and publishers alike.

Audience buying on the rise

As audience buying gains in popularity, particularly through biddable media available in exchanges and other programmatic channels, marketers will compete more heavily for specific audiences that perform well against predetermined goals. Driving this buying trend are two key aspects:

  1. There is a shift from targeting content as a proxy for audiences to being able to effectively target audiences thanks to the data that is now available. Smart marketers increasingly see programmatic buys as a critical component in their buys to guarantee effectiveness.
  2. Smart publishers are waking up to the realization that if they can master the data layer associated to their audiences, they can control and actually benefit from programmatic buys.

A complex mix of elements

When Centro walks a buyer through the programmatic options at his/her disposal, there is a lot to choose from. We evaluate scale, creative, data integration, pricing, transparency levels, and more. There are more elements to manage in digital than there are in traditional media. Therefore, there’s a lot more decisions for a buyer.

According to Forrester, the buying community is moving to a model that is:

  1. Audience centric: The traditional model of “media”-centric buying is giving way to one focused on audiences, driven by first and third-party data targeting and data management platforms (DMPs).
  2. Data driven: Real-time technologies are helping marketers make real time decisions based on a wealth of data, whether they’re algorithmically driven buying platforms (like DSPs), data and audience management platforms (DMPs), tools that run user-level pathway analysis to understand channel interplay, or all three.
  3. Multi-channel: Consumers don’t think in channel silos, so we shouldn’t buy and optimize that way. Today’s digital media buying and optimization is beginning to transcend channels to improve performance and consumer experience.

Buying across channels and touch-points

Furthermore from Forrester, the industry should expect to see ad exchanges increasingly handling and offering all kinds of addressable ad inventory: TV, OOH, etc.The demand-side platforms of today will morph into buying platforms that access all channels and all possible touch-points: web, mobile, social, TV, etc. From the buyer POV, the critical work will be done managing first party-data and integrating third-party data to target real audiences. Media buying agencies will have two types of teams: programmatic buyers and brand experience buyers, with the latter looking after data driven, yet highly customized, deals with specific publishers.

A new kind of media buyer

As such, a new set of skills and capabilities will be in demand for the successful media buyers of the 21st century. Whereas before, buying clout, negotiation and manual management were the skills that mattered. Now, data-driven decision making, real-price dynamics analysis and automated and predictive management are the differentiators. This is a new type of professional that can nurture professional relationships AND do so based on a solid understanding of the data describing the performance of campaigns.

Programmatic advertising is beyond the conceptual stage. It’s time for experimentation, testing and learning. Brands should ask their in-house buyers or their agencies for programmatic media tactics as part of the plan – whether it’s programmatic direct, open exchanges or others. This is the future of media buying.