The Disruptive and Transformative Influence of Programmatic

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ADOTAS — The accelerating transformation of the digital media landscape is unquestionable. Buyers are raising their hands and asking for additional processes and outlets in which to invest digital ad dollars, and the market is adapting more quickly than ever. Programmatic has emerged as one of the most influential – and controversial – topics of debate encountered by marketers and publishers in the last decade.

The speed of change sometimes instigates chaos and uncertainty, but smart buyers and sellers recognize this rapid transformation not as a threat, but as an incredible opportunity.

The Past as Present: Witnessing the Impact of an Emerging Technology

The perpetually overused reference to television destroying radio, which later evolved to the Internet growing to destroy television, has been disproven time and again. The impact of each new technology forever altered the previous reigning medium. Yet both radio and television have not only survived, but have thrived, by adapting to the changing behaviors of their customers and audiences, and by investing heavily to evolve with the needs of the market.

The programmatic influence on the digital ad ecosystem cannot be overstated. Nearly 20% of digital display dollars will be transacted via programmatic means in 2013, and that percentage is expected to grow to 30% or more by 2017.1 (If recent aggressive reports are an indication, the shift may be even more pronounced, with as much as half of all digital display dollars being spent via programmatic in the next four years.)2

This acceleration in programmatic spend has led some to profess the death of direct sales as we know it. But how many times have we witnessed a new “disruptive” technology emerge, only to see the market absorb the benefits of the new entrant and the existing players adapt within the new landscape?

An Artificial Construct within a Changing Landscape

We’ve seen shifts like this before. I witnessed it firsthand earlier in my career, when search made its debut and quickly stole ‘share of mind’ with marketers and industry pundits. With the emerging dominance of search, the fate of display was questioned, leading many to proclaim the death of display advertising. Yet despite the significant impact of search on the digital ad market, display remains the dominant force in digital media spending. eMarketer projects display growth and total spend will continue to outpace that of search, with display growing to 49 percent of total digital spending, and search falling to 42 percent by 2017.1 This artificial construct that sees every new technology destroying an existing set of solutions is a dangerous path of thought.

A Spectrum of Solutions Tailored to CMO Needs

Today’s CMOs deploy their budgets across dozens – often hundreds – of media outlets, partners and tactics. Today’s CMO recognizes the importance of programmatic, but appreciates the ongoing and growing importance of premium custom executions. Some argue for a ‘barbell’ approach to digital ad solutions – with custom, content-heavy executions on one end, and programmatic offerings on the other.

Rather than isolate the two as entirely separate, disconnected offerings, we believe both premium custom executions and high-efficiency programmatic solutions exist as equal opportunities across the spectrum of digital ad solutions available to today’s CMOs. By combining the power of brand-building, premium custom content, and media executions with the transparent, high-efficiency, data-driven benefits of programmatic, publishers can deliver on the promise of “man plus machine.”

Digital Advertising Is Not a Zero-Sum Game

Marketers benefit from a diverse array of solutions – some working simultaneously, others deployed individually – to achieve success and exceed their KPIs. Buyers are asking for an evolved marketplace, and those who fight the shift out of entrenched fears will be passed over with increasing frequency as marketers stand by their demands. By offering a spectrum of solutions tailored to individual marketer, brand and campaign metrics, publishers can become an integrated, full-service partner capable of meeting increasingly specific buyer needs in the new digital ad landscape.

1 eMarketer, August 2013

2 IDC, September 2013

 

3 COMMENTS

  1. Finally…not overhyping but not dismissing programmatic. Great post…Federated Media overplayed their bet last year when they fired their sales team then hired them back this year. It is not a zero sum game indeed. Well said…

  2. I keep an old school wooden ruler in my office as a constant reminder that, even on such an antiquated measurement tool, it’s smart enough to offer 2 options. Programmatic buying is but 1, albeit a large one if you subscribe to the barbell philosophy as I do, form of buying/selling in a limitless digital marketing world. It also enables different forms of measurement – another option in our toolbox.

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