Programmatic: man vs. machine
A recent eMarketer report pointed to a 73% increase in real time advertising spend in the US this year, and we are now seeing the same explosion happening across Europe. As the programmatic sector of the industry is capturing some 20% of total digital display spend, we saw a need for local insights and benchmarks – as well as a more strategic view into the programmatic market in the UK – current and future.
Last week Improve Digital launched new research that explored publisher and agency views and attitudes towards programmatic advertising in the UK. Conducted by FaR Partners, our report found that while the industry is rapidly growing, there is still untapped potential, largely on the part of the publisher.
11% of those publishers interviewed for the research recognise a future media owner sales model that is completely programmatic, but the majority view (89% see a split between direct and programmatic) illustrates a resistance to and fear of platform trading, which has resulted in audiences and inventory being under-valued.
Key agency influencers are strongly urging publishers to embrace the opportunity
Key agency influencers are strongly urging publishers to embrace the opportunity and rethink their programmatic strategy in order to capitalise on the rapid market shift. Yet where we are seeing and hearing of agencies and trading desks evolving – becoming more sophisticated with their use of data, analytics, and the changing shape of the people they are hiring – many publishers are still locked in a fear of cannibalising their direct sales channels and avoiding the risk of displacing their sales force.
We are regularly asked how we can help them avoid that. From a product perspective, we have invested in the tools and controls that allow media owners to manage and control their yields, audience data, and advertiser blocklists, so the capability is there to allow them to protect, if not improve their monetisation.
Direct, automated, and even house campaigns can be optimised against each other in our platform and floor prices controlled so that using our SSP isn’t seen as a cheap route to the same audience and inventory from a buyer’s perspective. First party data can also be seamlessly integrated to maximise the value of these combined assets.
However, changing the mindset and reassuring that these two sales functions can co-habit rather than compete is a longer process. Without a doubt the profile of our people in the industry is changing, but that doesn’t mean that the requirement for highly skilled people is reducing. Specialists are in high demand, whether to understand the technology in place and the opportunity it presents, the analytics of optimisation and performance, or a deeper understanding of the non-guaranteed, auction-based sales model.
There is, and always will be, significant advertising revenue channelling through sponsorships, content partnerships and deeper integrations across multi-media channels that programmatic is not able to fulfil. Experienced professionals are critical to the offering and success of these opportunities, representing the media owner and fulfilling advertiser needs and expectations.
Much as we (rightly) expect technology to bring efficiencies, whether in speed of workflow and go live, or minimising menial tasks, there will always be a need to build good relationships and strengthen partnerships.
Our research also indicated that 33% of ATDs prefer working with an SSP because of the service offered, and the ability to articulate industry wide challenges and opportunities, rather than a requirement or an expectation of an entirely automated sales channel.
This also exposes another key finding that there is a legacy gap between the buy and sell side. The more passive remnant strategy that publishers have adopted has in some cases realised their cannibalisation fear, leading to a mistrust of trading desks and what they are trying to achieve. There is much evidence to illustrate RTB eCPMs are actually increasing as agencies are prepared to pay a premium to find their audiences via a more efficient route.
At Improve Digital we see that private marketplaces are similarly increasing eCPMs by up to 250%, and proving valuable and successful for the buyer and seller. A well-defined quality audience, reachable in a transparent and trusted environment, will always carry a premium.
Our research shows that 56% of publishers have said they are likely to change SSPs in the next 12 months so the message is getting through. It is those publishers that take a more strategic, longer term approach to the market that have the opportunity to take the lead. And as they move from a remnant approach to private market place trading, this will give them the controls and therefore confidence to provide the inventory the market requires.