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The Evolution of Programmatic

Jessica Schultz

This week, I presented about all things programmatic at the DigMe conference in Philadelphia. But before we can get too far into what it means for the future, it is important to understand how it has evolved the digital landscape thus far. Programmatic buying allows brands to use audience insights and technology to tailor messages to the right person, at the right moment, in the right context. And we feel 2016 will be the year to figure how to use and collect all the disparate data available to better inform marketing decisions.

As technology has advanced, advertisers have had to create new opportunities across channels with the same scale and efficiency once only available with display. Programmatic is no longer just a buzzword; it is the idea of buying media based on a foundation of data-informed decisions. Data is the future for how media will be bought across all channels, and is not slowing its pace. According to eMarketer, programmatic will account for 72% of all digital spend by 2017.

At DigMe, I dove into the six ways we are seeing programmatic buying evolve. To learn more, read on.

It all started with display, but that’s far from the end of the story. And while standard desktop display may be the most common, it is by no means stagnant in opportunity. There are a number of new ways to leverage programmatic display buys. For example, advertisers can retarget users that have opened a brand’s email or watched a brand’s video to completion, serving a subsequent ad to continue to push them through the purchase funnel.

While programmatic has become widely accepted as the norm for ad buying; using multiple data sources to inform buying decisions based less on human interaction and more on technology has resulted in other obstacles advertisers now are left to deal with. According to the Association of National Advertising, bot-driven ad fraud caused $6.5 billion in losses in 2015. In 2015, Integral Ad Science (IAS) saw networks and exchanges at a 41.5% viewability rate, The IAB industry standard is 50%, so there is room for improvement in the industry.

There was once a time when ad buyers prided themselves in getting the lowest CPM. The industry now understands that the lowest rate does not always mean better. It’s cheap for a reason. The good news is the industry is responding and the need to embrace viewable impressions and higher quality inventory is a movement happening in the programmatic space in 2016.

Travel is one of the fastest growing categories for mobile. eMarketer states that over half of all digital travel bookings will come from a mobile device by 2016, resulting in over 66 million transactions. Mobile has changed everything. The customer journey is now very fragmented so advertisers have to find new ways to connect with the traveler . In general, travelers are becoming more comfortable with using their phone to access information for purchase decisions, leading to new advertising opportunities.

2016 will be the year native ads become more defined. It’s already known that in-feed ads (the most common type of native ad) work well, thanks to publishers like Facebook. Don’t be surprised to see more publishers start to create native ads that can be widely dispersed. And native is not just for branding anymore. Sharethrough saw a 52% lift in purchase intent for native vs. standard display ads.

Video & TV
One in three people consume video on their smartphone. The growth in digital TV and video consumption is an important indication of the way consumer behavior is changing. As the consumption of digital video increases, this evolution has created new opportunities to still reach an extremely engaged, mass audience, before only available through a traditional TV buy. Now additional data allows advertisers to further audience segmentation and insights, blurring the lines even further between video and TV.

Dynamic & Personalization
As programmatic buying becomes more mainstream, advertisers are looking for the next level of capabilities. With flash going away in 2015 and HTML5 becoming standard practice, using the same creative across all devices has allowed advertisers to rethink their creative ad strategy. If it isn’t relevant, consumers won’t care.

Gone are the days where digital advertising was seen as a direct response tool relegated to unattractive banner ads. The industry has moved beyond that, and with this change, a whole new spectrum of opportunity has emerged that inspires audiences with the new idea of an attention strategy. People have already identified how efficient and effective display ads are when bought programmatically - the adoption across other channels is happening now and happening quickly. It’s still about "the right person at the right time", but now it's about connecting in a meaningful way.

Learn more about MMGY’s media services here.

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