Programmatic ad buying: The Rise of the Machines
Remember how the machines took over in those TERMINATOR movies?
That’s sort of an extreme way to look at one of the hottest new trends in marketing spending for 2016. “Programmatic” ad buying is changing the face of online advertising. It’s using machines instead of humans to buy ads. Programmatic ad buying uses often completely automated software to purchase digital advertising instead of the old school way that involves humans, negotiation, and manual insertion orders.
It’s very much like the transformation we’ve seen in the travel and tourism industry, where the venerable travel agent is being replaced by the app.
The obvious advantage of programmatic ad buying is speed and efficiency. Before the rise of the machines, er, programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, humans who make mistakes, can be unreliable and are often finding the most expensive sale to make, as opposed to the most effective. In theory, programmatic advertising technology promises to make the ad buying less expensive through less interaction and more efficiency, removing human error from the process wherever possible.
What does this mean to marketers and media buyers?
Programmatic technology will probably mean there are fewer ad buyers in the world, but it could also allow both marketers and sellers to spend more of their time planning sophisticated, customized campaigns instead of getting bogged down in bureaucracy. Technology is being used to replace some of the more menial tasks that humans have historically had to handle, like sending insertion orders to publishers and dealing with ad tags, but they’re still required to optimize campaigns and to plan strategies.
It’s impossible to tell what portion of advertising is now traded programmatically, but it’s definitely growing exponentially. Some agencies now say they’re eager to buy as much media as possible through programmatic channels, and some major brands have even built out in-house teams to handle their programmatic ad buying as they spend more of their marketing budgets that way. At the moment, it’s mainly online ads that are traded programatically, but increasingly media companies and agencies are exploring ways to sell “traditional” media this way, including TV spots and out-of-home ads.
DIRECT MARKETING magazine thinks programmatic advertising will “democratize media buying” as it becomes more automatic and less of a specialist area. Tech and industries who do most of their sales online have been the early adopters, but programmatic ad buying is likely to be a tool in every marketer’s toolkit in a very short time.
Thoughts, questions, comments? I’d love to hear from you.