The Hidden Benefits Of Programmatic Advertising

gregmasonsellsideThe Sell Sider” is a column written by the sell side of the digital media community.

Today's column is written by Greg Mason, CEO at Purch.

For publishers, the benefits of programmatic advertising have been well stated. It enables us to optimize sales, streamline operations and provide useful data to improve the overall buying process. This is why it’s one of the fastest-growing segments in the industry, with more than 85% of all advertisers and 72% of all publishers embracing it.

The obvious upside for most players is, of course, greater efficiency. But in the post-adoption era, programmatic advertising carries with it several deeper and longer-term ramifications that don’t always receive as much attention.

Using Technology And Data In New Ways

Not so long ago, most publishers had little need for digital technology expertise outside of content management platforms and analytics software. However, for programmatic to be effective for publishers and their partners, the industry has had to unbox and demystify the technology. Subsequently, in-house technology expertise has expanded out of sheer necessity.

And the shift towards programmatic has helped drive that further, changing the way publishers have traditionally operated and forcing them to become experts in technology and data. The cutting-edge publishers of today are well versed in algorithms, analytics and predictive modeling. Many have added dedicated data scientists to their operations teams and manage their own technology stacks.

The potential here is tremendous, with publishers gaining greater control over the buying and selling of inventory and insight into how their content is performing. And as publishers begin taking more of this technology in-house, analysis around readers’ intent when visiting a website will usher in an era of true hyperpersonalization, creating more value for users and those advertisers trying to reach them.

Furthermore, given demand and supply flows unevenly across the programmatic landscape, publishers are building proprietary RTB platforms that give them the ability to create competition from multiple demand sources, thus making the most of their inventory.

This goes to show that technology isn’t just a necessary evil in publishing. It has actually become a competitive advantage.

More Time For Strategy Development

This isn’t necessarily a hidden benefit, but it is somewhat underrated among others, despite its overall significance. With automation, manual RFPs, taxing negotiations and clunky invoicing are becoming obsolete as programmatic begins to streamline the more onerous operational aspects of the buying and selling process. This, in turn, frees up time for sales and marketing teams to focus on what they do best: developing and testing strategy and direct-sales programs for their biggest assets.

The shift is breeding cultural changes across the board, not just for publishers, but also for brands and the agencies that represent them. It’s cultivating a new era in advertising that is less dependent on the mechanics and minutia and more focused on the big picture.

It’s refreshing, to say the least, and can have serious benefits down the road, even as we’re still identifying ways to quantify the gain.

Shining A Light On Quality And Viewability

It may not seem like a benefit at all, but I think it’s a good thing that programmatic has forced us to look at and grapple with some traditional digital advertising weaknesses. If you look at Google search volume for “programmatic advertising,” “viewability” and “ad fraud,” you see similar trends for each since 2013. This is because programmatic’s rise has reanimated interest in these longstanding issues.

As ad buying has become more automated, it’s easier to scale buys across thousands of sites. That represents enormous progress and efficiency, but there are pitfalls for every innovation. A trade-off of scaling quickly is the difficulty of achieving complete transparency in your buys, opening the door to nonviewable impressions or nonbrand safe environments.

But the flip side is that the rise of programmatic will push smart publishers to find ways to guarantee viewable inventory without sacrificing quality or scale, and to move toward a standardized measurement. Again, owning the technology stack is one way to create greater transparency for both publishers who seek to maximize the value of their inventory, and advertisers who want a guarantee their ads are being seen, and seen in the right context.

In 2015, these less-touted benefits will continue to grow more apparent. And with another year of programmatic experience under the category’s collective belt, I expect even more interesting – and perhaps unexpected – benefits to arise.

Follow Greg Mason (@gmason), Purch (@PurchGroup) and AdExchanger (@adexchanger) on Twitter.

 

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