“Marketer’s Note” is a weekly column informing marketers about the rapidly evolving digital marketing technology ecosystem.
This week it is written by Joanna O’Connell, Lead Analyst for AdExchanger Research.
For the second year in a row, when we run our State of Programmatic Media survey, I wait for the data with trepidation and excitement. What will be consistent? Where will things have changed? And what does it all mean for the programmatic ecosystem at large?
This year, in wading through the survey results, I was struck with this overarching thought: Programmatic is finally moving from “tip of the spear” to “mainstream” among the marketer community. I saw it in programmatic investment levels and projected spends, in attitudes expressed about the good and the bad in programmatic, and in excitement for a “programmatic TV” future*.
But things got interesting when I looked at marketers’ self-reported mix of spend across the leading programmatic deal types: open exchange, private non-guaranteed, private guaranteed.
Last year, there was relatively strong investment in – and lots of bullishness toward – “private deals,” both non-guaranteed and guaranteed. In fact, our 2014 marketer respondents were planning on investing fully 50% of their programmatic budgets in private deals of one form or another in the coming months.
This year was a different story. Our 2015 marketer respondents report a much heavier reliance on open exchange buying, and less bullishness on short-term future spending in private deals (see Figures 1 and 2).
Figure 1: Marketers’ Programmatic Allocation By Buy Type (2015)
Source: AdExchanger Research “The State of Programmatic Media” online survey, Q1 2015; Base: 57 marketers
Figure 2: Marketers’ Projected Allocation Over Next Twelve Months (2015)
Source: AdExchanger Research “The State of Programmatic Media” online survey, Q1 2015; Base: 57 marketers
Interesting. But – perhaps surprisingly to some of you – not contradictory to my overall assessment that programmatic is mainstreaming and maturing.
Yes, we all know what marketers are saying – “I want to buy more good inventory programmatically.” In fact, I had a senior marketer at a global, multibillion-dollar company recently take me through her organization’s programmatic strategy, currently in development, which showed a complete focus on publisher-direct deals and no exchange-based buying (for the typically cited reasons: concerns about inventory quality and fraud, transparency and control).
BUT, the reality of the market is that that’s a tough thing for the average brand advertiser to do at scale right now, especially one new to programmatic. (My response to her was, “In theory, sounds good. In practice, good luck. At least today.”) These deals take time, energy and expertise to cultivate, continue to suffer definitional difficulties and are still more onerous to execute than anyone would like. So with this year’s marketer respondents – many of them newer to the programmatic party (populated with many who favor “lower CPMs” as a benefit of programmatic, by the way. Eek.) – it’s no wonder that they don’t yet have scaled, premium private deals in place. They’re just not there yet.
Long and short, this data doesn’t tell a bad story. Rather, it tells a story of an industry that’s experiencing natural growing pains. I look forward to seeing what next year’s survey results have to tell about the state of programmatic media!
Joanna
*All of this will be covered in my forthcoming “State of Programmatic Media 2015” report, out in the next few weeks.
