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Insight/ Online Media

Do Programmatic Buying Opportunities Outweigh The Challenges?

by Giselle Abramovich
Senior & Strategic Editor
CMO.com

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Article Highlights:

  • The biggest challenge publishers face with programmatic buying in the short term will be whether and how to integrate it into their premium, direct-selling efforts.
  • Kellogg has seen tremendous results when using programmatic buying
  • Programmatic buying provides great opportunities to gain insights to user interests and behaviors that are not gained through traditional media buys.

IPG’s announcement this week that it will automate 50 percent of its media buying has resurfaced a lot of buzz around programmatic buying. And although machine-based buying does have its challenges, the common consensus is that its benefits outweigh the hurdles.

CMO.com compiled various opinions on the matter. We are keen to find out what the challenges and opportunities are and whether the opportunities outweigh the challenges.

Griselda Fernandez, VP and Media Director, Mediasmith, told CMO.com:
Apart from the clear advantages of cost savings and improved targeting, programmatic buying provides agencies a unique opportunity to impact our client’s business. By having our hands on the levers, we can act quickly, see results in real-time, and inform campaign strategy faster than ever before.  This allows agencies to have a real-time insights solution that adds value beyond media. For example, the real-time insights gained through RTB can not only inform media optimizations but also audience segmentation and messaging.  Specifically, the combination of advanced technologies and rich data allow agencies to test go-to-market strategies, micro-target segments and message combinations, without having to invest significant money or time.  Beyond the current digital world, it will be especially exciting when programmatic OOH and TV matures.

The biggest challenge that we see is acquiring the right talent to run these efforts.  While algorithms get smarter and smarter, in the end it still requires the human element to interpret the data and deliver useful business insights. These campaign managers are difficult to find and retain. They’re more engineering-minded, and are often motivated by the data first, unlike traditional media buyers. While retaining the talent to run a programmatic buying practice is a challenge, the opportunity presented by these new media technologies is more than worth the effort. 

Nick Blunden, Global Digital Publisher, The Economist, told CMO.com:
The biggest opportunity with programmatic buying is to simultaneously make the advertising process both more effective and more efficient. More effective because programmatic buying, supported by data, enables advertisers to reach their most valuable audiences in the optimum context and more efficient because using automation some of the friction can be removed from the buying process.

However to make the most of this opportunity we need to overcome the challenge that the new platforms and technologies that drive programmatic buying can make the process more not less opaque. And, without greater transparency the benefits of programmatic will flow disproportionally across the value chain holding back investment and undermining trust.

Overall the opportunities of programmatic buying certainly outweigh the challenges but the industry needs to work together to maximize the benefit.

David Avalon, VP & Engagement Director, McCann, told CMO.com:
One of the challenges facing agencies and their programmatic buyers is the lack of format options that are available through the various DSPs and ad exchanges. While inventory scale powered by data is a plus, the lack of scale by format limits engagement that is driven by direct-to-publisher opportunities such as custom rich media, high impact units, and digital sponsorships.

However, programmatic buying provides great opportunities to gain insights to user interests and behaviors that are not gained through traditional media buys. For example, programmatic buying can utilize prospecting to look at new audience segments that may not have been a previous target. Often times, these audiences look vastly different than our intended consumer.

Bob Arnold, Director of Digital Strategy, Kellogg, told Forbes: 
We’ve seen tremendous results when using programmatic buying. Depending on the brand, the digital media ROIs have increased as much as six times, according to our 3rd party market mix models. Compared to two years ago, we’re aggressively leveraging it today.

Meredith Levien, CRO, Forbes, told Digiday
The biggest challenge publishers face with programmatic buying in the short term will be whether and how to integrate it into their premium, direct-selling efforts. Human connections still matter. Smart publishers take the time to develop personal relationships with their programmatic partners to learn how to best position their inventory for sale on the exchanges. They employ the right people as technologists and yield managers to direct the machines and also encourage (and compensate) their direct-sales teams to foster programmatic buying where it does the best job of solving a marketer’s problem.

Anthony Hitchings, Head of Advertising Technology & Digital Operations, FT.com, told AdExchanger:
I see the programmatic space as providing a great opportunity for us. But there are 'teething troubles,' if you like, with a large number of supply-side platforms (SSPs) that have been built up. And there are obviously some key demand-side platforms (DSPs) and the two haven’t learned to communicate effectively together yet. DSPs started out with the basics of trying to find users based on advertiser data and they haven’t realized the full potential yet of what you could do with publisher data and actually using programmatic for brand.

About Giselle Abramovich

Giselle Abramovich is senior & strategic editor at CMO.com. Previously she wrote for outlets including Direct Marketing News, Mobile Marketer, Mobile Commerce Daily, Luxury Daily, and Digiday. Reach her at abramovi@adobe.com, or follow her on Twitter @GAbramovich.

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