[Ed. Note: As a follow up to MediaMath’s participation in our 2015 Digital Marketing Trends webinar, they have agreed to speak a bit more about how programmatic has moved from its days as a line item on a media plan to the means by which an advertiser’s entire digital media plan is procured. And before we know it, programmatic will be the new norm.]
Rather than trying to wrap your head around the multiple definitions of programmatic floating around in our industry, it is more important to focus on the idea that programmatic isn’t just a set of tools that support marketing process automation, or even a real-time auction through which online media is bought and sold. Rather, it represents the culmination of decades of innovation in technology, data and addressable media.
In short, programmatic enables marketers to drive business outcomes — in a quantifiable manner — with greater control and transparency.
In 2014, we saw many brands and advertisers make increased investments in programmatic – in fact, according to eMarketer, 2014 has seen the most explosive and dramatic growth in programmatic advertising to date. But it still doesn’t account for the majority of digital spend because advertisers are learning about how it really works and how expansive its benefits are. As of now, US advertisers will spend $10.06 billion on programmatic digital display advertising in 2014, a 137.1% gain from 2013.
Programmatic Trends in 2015
Many advertisers and agencies have dabbled in programmatic this past year – investing in a technology solution – or multiple. In fact, major brands are putting a stake in the ground around programmatic, some committing to allocating almost 100% of their digital budgets to programmatic. While many have seen the ROI that programmatic can deliver, we anticipate that in 2015 brands will:
- Consolidate the various point solutions in which they may have invested into a central, open platform to gain a more holistic and comprehensive view of their efforts
- Connect their customer databases to their digital marketing platforms to improve targeting and closed-loop measurement
- De-silo their organization and put technology at the center
- Expand their programmatic efforts more aggressively beyond display – realizing the impact programmatic has in mobile, social, video, and even potentially TV
- See even greater performance and ROI
This speaks volumes, but one of the most significant opportunities with programmatic is that it levels the playing field. Even small and medium sized brands and agencies can leverage its power and see maximum impact by leveraging focused and disciplined targeting strategies
Why Is Programmatic Important?
A major impetus for the rise of programmatic is the realization that contrary to popular belief, programmatic does not enable the buying of ONLY remnant inventory – the exchanges are utilized for private marketplace and premium inventory buying as well. What was once only available through a direct I/O with a publisher can now be purchased, activated, and optimized via programmatic channels. In fact, today, programmatic is also largely associated with inventory that is premium, exclusive, guaranteed, and customizable.
In cases where advertisers are still negotiating upfront for a fixed amount of inventory at a fixed rate, there is benefit from being able to track this buy through a buying platform in order to get the benefit of all the analytics across all of your buying in one spot, including proper conversion attribution and reach, and frequency reporting. Advertisers who are focused on driving real business outcomes, in the form of ROI or related metrics, will further embrace the notion that premium inventory can lead to incremental scale and performance, even at potentially higher CPM’s. The continued granularity available for audience-level targeting further enhances the value proposition of finding the right user for the right price at the right time.
The CMO is Digital
The rise of the CMO as a digital marketer is growing at the same rapid rate as the adoption of the technology. CMOs are becoming more familiar with digital marketing – they know what a pixel is and understand the need to tap into a wide array of metrics. When digital was 5% of media spend, there was less urgency around it’s true ROI,, but as digital gets to be 25% and eventually 50%, CMOs are digging deeper. And there is increased scrutiny on margins and budgets, quantifying results for the CMO. Without a deeper understanding of the technology that is driving these numbers, the CMO would fall short in being able to make the forward-thinking high level decisions that would positively impact their organization.
Finally, programmatic is proving itself an efficient, scalable and high-performing tactic for a range of marketer goals – from brand awareness to engagement to purchase to retention. Regardless of the metric of success, programmatic media buying enables marketers to execute testing across a myriad of supply opportunities that they may have never sampled in the past. The execution of this testing is made even easier by systematic learning by the buying platform itself, eliminating the need for constant manual intervention, which will enable CMOs to setup their buying teams for success in 2015.
To hear more about this and the other 3 trends we’re predicting in 2015, watch our 2015 Digital Trends webinar:
About the Author
VP of Programmatic Strategy and Optimization
Mike oversees a global team responsible for optimization best practices on MediaMath‘s TerminalOne platform, in addition to providing research & consultative services designed to help clients curate their ideal holistic digital marketing programs.