Programmatic media buying has been in practice for over 10 years now and is fast becoming the standard method for connecting brands to consumers. But as the media ecosystem matures in our new digitally connected age, challenges remain. Education and upskilling to promote better understanding of the vast applications, measurable outcomes and full potential of this relatively new way of buying media is in order. It’s important to understand the origin or programmatic, and where we are heading to next.

Generally speaking, programmatic helps brands find people who want, or may want, to purchase their products or services, wherever they are, at influential and decision making moments. The complex mechanics in the background are facilitated by leveraging first, second and third party data combined with advanced machine intelligence and technology to segment, manage and action against addressable audiences at scale and in real time. Quite the mouthful, it’s no wonder people are left feeling a bit confused.

The programmatic journey begins

Programmatic trading originated as a means to offload remnant, long-tail inventory driving incremental revenue for publishers, and creating a marketplace of “cheap” accessible media. Real-time bidding (RTB) allowed bidding and trading to happen in an automated fashion as unsold inventory became available. This method of buying and selling media created significant efficiencies to the manual I/O (Insertion Order). But it also created a race to the bottom on pricing, the collateral damage being perhaps too much emphasis on lower CPMs as a key performance metric.

Efficiencies lead to the next phase of programmatic. This involved moving away from selling leftover supply to leveraging the wealth of data now available, combined with advanced machine learning to connect media activity across all digital channels and devices.

More and more data continues to come online and the consumer journey is more complex than ever. A person can look at a pair of jeans on their mobile app, take a second look from their desktop at work and stop by the store in the evening. Consumers are now using an average of five ‘connected’ devices in the purchase process, compared to 2.8 devices a year ago. Previously all of these touch points were disconnected to the marketer, but those days are soon to be over.

Programmatic media + audience management = personalisation at scale

Enter the new age of people-based marketing, where marketers are focused on creating one-to-one experiences for their customers. Sophisticated and empowered with multiple devices, consumers are numb to generic ads and demanding personalised messaging that is relevant to their interests and purchasing behaviour.

And it’s not just martech that can execute people-based marketing campaigns for clients. Media agencies and ad tech are paving the way in this new era, often coined as Programmatic 3.0.

By nature, media agencies have great scale. They have access to technology that helps clients harness the power of their first party data, match profiles into a unified view, create bespoke addressable audience segments, and activate 1:1 campaigns via programmatic media and audience buying platforms.

The challenge now is stitching together all that data. In Australia, the average person has 3.3 connected devices, creating billions of data points per connected consumer daily. It takes tags, pixels, SDKs, APIs, etc. to collect data from multiple sources that use different formats, ways of identification and various naming conventions.

Global media agencies now leverage data management platforms (DMP) that ingest huge amounts of data, connect disparate data sets into a single identity, creating a single view of the customer across the channels and devices they engage. The result is the ability to engage customers with contextual relevance on a 1:1 basis and at scale.

Ready for the next phase

According to Forrester, 41% of marketers in Asia Pacific have adopted programmatic buying into their media plans, and 96% of them plan to continue investing in programmatic over the next 24 months. Global programmatic ad spend is expected to reach US$37 billion by 2019, according to Magna Global and the APAC region is poised to play a significant role in this growth.

Programmatic media buying will continue to leverage the efficiencies of new technology and smarter algorithms. And as more and more consumer touchpoints become digital, data and audience management will be critical to any competitive offering.

Programmatic media activation will focus on audience-centric campaigns, often procured through direct private marketplaces or by securing media on a guaranteed basis, mitigating brand safety risk with trusted publishers. Some even suggest that programmatic will go by the way of stock markets and commodities trading, with publishers selling inventory to advertisers for future use, and potentially buying back and selling again.

In the end, we are all after a common goal to provide highly personalised messaging to real, relevant audiences wherever they are in the moments that matter. The way in which we get there is evolving as more data and advanced technology becomes available. In the new age of the digital economy, programmatic 3.0 is well placed as the mechanism by which data and audiences can bring brands closer to their customers.

We’ve got a lot of runway ahead, but we’re well on our way.

By Amnet ANZ national managing director Indy Khabra


This article was originally published on AdNews HERE