In 2016, we asked industry leaders the trends they saw impacting programmatic in the months to come. With the 2017 Programmatic Summit approaching, we discuss the key trends for the new year.
1. Closing the programmatic divide
According to IAB CEO Vijay Solanki, there are three camps of people in the world of programmatic. The first is those steeped in programmatic such as ad tech vendors, agency staff working on trading desks and the early adopters who have their heads around the technology and its possibilities. Then there are people new to programmatic. Finally, there’s a group who fall somewhere in the middle. For those of us who have been talking the programmatic talk for a couple of years, it’s easy to forget we’re not all on the same page.
“There’s still a job to do around education. From our research, we see folks fall into those three camps and each has different needs,” said Solanki.
For those in the know, Solanki notes, the conversation around programmatic tends to focus on more advanced concerns such as accountability and transparency but for everyone else, there remains a need to explain what programmatic actually is and what it is capable of. The best way to bridge the divide, according to Solanki, is to help marketers get their hands dirty.
“What the industry needs to do is to engage and entice those who know they need to step into programmatic but might not know where to start and who to trust. Education and confidence are key. We need to create a space to test and learn before a marketer commits,” said Solanki.
James Diamond, managing director of Integral Ad Science (IAS), believes we’re well on our way to closing the divide. He said: “Potentially, that the gap is being bridged a lot quicker than some people think. Really big organisations are starting to take talented people out of agencies, out of trading desks, out of ad tech players and putting them in-house to help ensure the brand has the knowledge and the understanding to ensure it’s getting what it pays for.”
2. Not quite the year of Programmatic TV
Programmatic TV will have a breakthrough in 2017 but it won’t be the year of programmatic TV. However, TubeMogul’s Sam Smith believes this time next year Australia will have positioned itself as the most advanced TV market in the world. While other markets are putting linear TV in the too hard basket, we’re giving it a crack. Smith said: “Nowhere else is even solving traditional broadcast television. They just leap straight into cable and subscription TV because it’s easier to execute against and you can easily put data sets across it. But here in Australia, you’ll see enormous movement around traditional television data sets and also the ability to automate the entire trading process of linear television this year.”
3. Programmatic radio kicks off
While all eyes are on programmatic TV, radio might actually be the one to watch in 2017.
The IAB’s Solanki said: “There’s no doubt in my mind that 2017 will be the year of programmatic audio. I’ve seen it gather momentum over the past two years with programmatic exchanges being developed and grown.”
In 2015, Triton Digital and Southern Cross Austereo launched a programmatic exchange and in December last year, Commercial Radio Australia appointed AudioNET as the industry partner to automate the radio buying process. AudioNET was tasked with creating software that allows agencies to interface with radio stations’ traffic management systems. Following testing in the first quarter of the year, the system is expected to roll out and be in full operation by Q3. The next step is to explore the ability of the system to achieve data segmentation with programmatic trading to come further down the track. So while there is already media vendor specific programmatic offerings well positioned to take off in 2017, an industry-wide approach won’t be in operation until the back end of the year at the very least.
4. Retargeting gets a rethink
In 2017, Spinach’s Ben Willee hopes people using programmatic will take a long, hard look at what they are doing and think twice before chasing people around the web. “Stop the stupid, creepy, incessant retargeting that delivers people the same message in different environments regardless of their behaviour, what they’ve clicked or if they’ve bought,” said Willee. “That drives people bloody insane.”
Instead, Willee believes marketers will start to apply far more sense to the process to “stop pissing people off”. As the industry’s knowledge of programmatic matures, Willee predicts marketers will start to see how much money is being wasted and approach programmatic retargeting in a far more considered way. For all our sakes, let’s hope that happens sooner rather than later.
5. Data integration with attribution models
IAS’s Diamond says the big trend on his radar for programmatic this year is media quality data being integrated into attribution models. He said: “That’s going to make a big difference to how advertisers and agencies choose which publishers and partners they work with because currently, this post-impression attribution world that we live in can lead to some partners looking like they’re performing well when in fact that’s not the case. Bringing in media quality data will show that. We will start to see some of the big brands integrate that media quality data into their attribution models which will be good.”
6. Cross-device programmatic
According to the Telsyte Digital Consumer Study 2016, Australian households have up to nine connected devices, a figure that’s set to rise dramatically to 24 by 2019. Imagine the wastage involved if you are treating each of these devices as an individual and programmatically serving them ads. Brands, and perhaps agencies, that can come up with a way to produce a single customer view this year will be a step ahead of the competition.
7. Programmatic gets better
As the technology improves alongside our combined knowledge of programmatic, data sources will consolidate and broadly, programmatic should get better. Spinach’s Willee believes this will benefit brands as much as consumers but it’s going to take some work. He said: “The route to improving programmatic is to reduce your duplication of message, consolidate your data sources and really understand who those eyeballs are and link together devices. If you can manage that, you’re going to find yourself a long way ahead of your competitors and reduce a significant amount of wastage in spend on impressions.”
8. Programmatic sees a price rise
As the technology around programmatic improves and low-quality or fraudulent inventory is removed from the equation, the experts predict the cost of programmatic will go up.
IAS’s Diamond said: “The key thing the buy side needs to prepare itself for throughout 2017 is higher CPMs because as we start to use viewability to weed out some low-quality inventory, there’s going to be the same demand, essentially, for less supply. That’s going to drive CPMs up.”
Spinach’s Willee believes this is a good thing. He said: “Publishers and advertisers need to start recognising that not all impressions are created equal. Some are more valuable than others. At the moment we’ve got such an oversupply it’s putting an impact on price. If we can reduce that supply, most advertisers would be happy to pay a higher price if they knew it was better quality exposure.”
9. The great in-house shift continues
Internationally, the list of brands with in-house programmatic capabilities is vast including names such as Netflix, P&G, Target, Hotels.com, Kellogg’s and American Express. In the US alone, a 2016 survey conducted by the Association of National Advertisers (ANA) found 31% of companies planned to expand their in-house programmatic capabilities. Last year, WPP’s Sir Martin Sorrell said the trend would be “short-lived” yet IAS’s Diamond says brands sitting on gold mines of data that are looking for trust and transparency will continue to make the move in-house. “It may be worth it for some of the really big brands, especially if they’ve got their own data that they want to leverage,” said Diamond.
However, with agencies committed to demonstrating transparency, Sir Martin’s prediction may yet be realised. “Agencies and ad tech players are working hard to improve the level of transparency they offer,” said Diamond. “If they do that and start to open up and provide a little more detail to the clients, the end users, the brands, then maybe that trend will slow.”
And Diamond says some of the brands that moved quickly to take programmatic in-house may already be starting to appreciate the level of effort agencies have been putting in behind the scenes. “Media agencies are actually doing a fair amount of work trying to keep all those cogs turning and it may not be as easy for brands as they originally anticipated,” said Diamond.
10. Programmatic becomes all about organisational transformation
Programmatic is not about bolting on another sales approach to existing methods. To truly do this properly, businesses need to be thinking programmatic at every level. As such, in 2017, one of the greatest trends in relation to programmatic will be the shift within organisations to accommodate for it.
“We’re having to structure our teams differently,” said TubeMogul’s Smith. “I would always have client service, fingers on keyboards, traders ironing out the relationship and having conversations about the execution whereas now, I’m having to have people who are able to handle a transformation-of-business kind of conversation?” And Smith is likely to be facing his own organisational transformation this year when the full effects of Adobe’s acquisition of TubeMogul take hold, the result of one of the key trends forecast for programmatic in 2016: programmatic consolidation.
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About Mark Abay - Content Director, Ashton Media
Mark is Content Director at Ashton Media. It's his job to create interesting and engaging conference programs that stretch the thinking of our attendees. Mark works closely with our industry advisors to ensure the conference content is aligned with the needs and interests of our audiences.