Programmatic: Where we are, and what we need to work towards
In its January 2016 report titled, “State of the Industry: A Close Look at Retargeting, Programmatic Advertising and Performance Marketing,” AdRoll shared that almost a third of all advertisers that participated in its study invested at least 50% of their digital ad budgets programmatically. That number has grown from just 7% in 2013.
We see statistics and read studies like these all the time – in fact, we’re living and breathing the growth they refer to every day. They all point towards a bright future, where automated buying and decisioning at scale will ultimately be the end goal for advertisers. But the current challenge is that while the programmatic market surges ahead at rapid speeds, growing and innovating each day, the practice doesn’t always necessarily keep up with the promise or the concept. And the brands who can’t afford to invest in the big programmatic solutions are sometimes left cobbling together a stack of platforms, partners and technologies in order to maintain a competitive position.
The silver-bullet “one-stop shop” solution, as it so often turns out, doesn’t yet exist in programmatic. For the sophisticated marketers who’ve been in the trenches testing different platforms, working to build a more complete customer view, the current reality is that no one Demand Side Platform (DSP) or Premium Publisher relationship is going to be enough. Today, buyer needs range from: access to premium inventory, an omni-funnel view of the customer, an understanding of how mobile fits into the fragmented customer journey, competitive bid pricing…and the list goes on. With the complexity of these needs, there’s no question that marketers will need to continue testing out and blending capabilities from different platforms. And that will likely continue into 2017, as the marketplace continues to figure itself out. So, where does that leave us now?
Let’s consider one of the many values programmatic offers – the ability to target and buy more perfect audiences. We hear the catch phrase “hyper-personalization” so often these days, but there is some truth to it. When we buy placements on sites now, we do so with deeper user insights from better data sources, and we have the ability to scale those more perfect relationships thanks to programmatic buying.
But that’s only one half of the equation. The other half is inventory. When you consider where that “perfect” audience is likely to spend most of their time, from mobile apps to Facebook to YouTube, you realize that even more important than access to the audience, is access to their environment. Let’s look at where the big players are at right now:
- Google continues to keep its exclusive YouTube inventory closed off (unless you choose to invest in their full stack of products)
- AOL continues to acquire more and more publishers, offering up better inventory as an incentive for their self-managed agencies and partners
- Yahoo (depending on the impending sale) continues to try and sell inventory themselves, indicated by their purchase of Bright Roll
Given the above, it’s reasonable – in fact, probably smart – for marketers to consider multiple DSPs to compensate for the range of inventory they need to reach their customers. Smaller DSP players don’t have access to the critical video environment that is YouTube, because Google owns it. And right now, the closest option would be to buy inventory from other YouTube-like video services, but without the luxury of Google’s audience. Major missed opportunities there.
Smart marketers and DSPs are instead working together to come up with alternative strategies. For instance, you may not be able to buy that YouTube inventory directly through the DSP, but there are capabilities to help track engagement and customer behavior across inventory bought outside the platform. And if it can be tracked and scaled through a persistent ID within that DSP environment, it’s another step in the right direction.
So the questions we, the marketers, must ask ourselves now are: If this is a short-term “fix” what can we do in the long term? Do we create our own technology in house? Do we continue to leverage multiple DSPs, getting the best of what each has to offer? Do we recommend that clients invest in, for example, the full Google stack for the sole purpose of accessing the exclusive inventory? Will Google ever release its inventory to the open marketplace?
They’re big questions, but the answers are what we need to continue to work towards, both as individual agencies and as an industry at large.