Programmatic: A Big Part Of The Future Of Radio

jeffhaleyddt“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jeff Haley, CEO at Marketron.

When I began selling in June of 1984, the formula for transacting media might have been summed up by five words: “The drinks are on me.”

Successful media selling then was about nurturing customer relationships – and it still is in many ways today.

Along the way, trends have come and gone but the actual formula for any media transaction has been the aggregation of an audience, the communication of information about that audience and its relative value. Today in radio, we know a whole lot more about our listeners, which creates complexity that can’t always be conveyed one to one, whether at the bar or not.

Programmatic advertising is the natural extension of sharing audience information between seller and buyer. Ads traded programmatically already make up about 40% of all digital media volume, according to a recent study by Forrester and the ANA.

Applying programmatic to non-digital ad inventory, such as radio and TV spots, is taking hold, with the first programmatic buying platform introduced in March. Media buyers and planners can now analyze audience goals and plan radio campaigns dynamically, via a web-based application that automates processes that are historically email- or spreadsheet-based, enabling end-to-end automation of buying, running and reporting of radio ad campaigns.

This is a sea change for the radio industry, which has been a constant innovator in creating engaged local audiences and transacting with advertisers for nearly 100 years.

These automated buys allow marketers to leverage their analytics and reach the right audiences anytime and anywhere, adjusting in real time if needed. Programmatic brings added transparency, targeting, ease of use and efficiency. Programmatic will allow brands to target the right audiences by market, station and daypart.

There are distinct advantages to broadcasters, who can price, package and sell their inventory seamlessly, right from a desktop. It can now be done with a better, more transparent overview of the inventory, ensuring that the highest volume of spots is sold at the highest yields.

There is rightful concern within the industry that introducing automated buying technology could lead to cost per mille declines as broadcasters seek to cut the price on unsold inventory. These price declines have occurred on the web with the advent of programmatic. However, inventory is finite, controls can be more disciplined, and I believe if the right platform and right information is maintained, radio should see new revenue streams from this improved information flow.

“If radio expects to grow, we need these platforms to trade around the new complexity of information,” an agency staffer told me last week. “Our clients expect us to know this data and act on it.”

I applaud radio’s early movers, such as CBS and Cumulus, which have begun using programmatic for online streaming inventory. Before long, we will see this in all parts of the business, along with more revenue for our valued audiences. I, for one, will drink to that.

Follow Marketron (@Marketron) and AdExchanger (@adexchanger) on Twitter.


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