Is Programmatic Effective?

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 Tim Webster, co-founder and chief strategy officer at The Exchange Lab.

Technology advancements over the past 10 years have without question transformed the digital advertising landscape. What was once a marketing activity driven by creative and mass media is now a far more sophisticated and targeted marketing communication due to the evolution of programmatic technology.

But is programmatic really the holy grail of effective marketing?

I recently deliberated whether programmatic is the future of media at Cannes Lions with Patrick Muir, CMO at Sherpa, John Beasley, CMO at Vero, and Dan Benedict, chief client officer at Maxus. Both sides of the debate agreed that programmatic, or some version of it, is the future, but as with any new technology, there are challenges surrounding it that need to be addressed.

From the early days of direct and network buys, programmatic advertising has advanced to connect consumers with brands across a myriad of sites, devices and content types. But with business goals being primarily focused on driving awareness and ROI, the objective of delivering exciting creative is getting lost.

The beauty of programmatic advertising is that it provides unprecedented access and insight into consumer data and behavior, which to date has not been possible with traditional media.

Using these insights, brands can more accurately target their desired audiences and monitor campaign success against set performance metrics. They can then optimize their advertising and reinvest ad spend in the most effective areas.

With programmatic growth set to reach $33 billion this year, it’s not surprising its effectiveness has come under continued scrutiny. Programmatic gets blamed for several things, including challenges around viewability and the loss of creativity in advertising. But this is an issue across digital media and not exclusive to programmatic.

Programmatic has changed the face of media buying, but the apparent lack of creative in advertising has not necessarily been lost because of it. Great creative is possible, and as Benedict of Maxus said, “Programmatic technology has simply grown exponentially, and it’s the creative development that needs to catch up.”

Consumers don’t care how an ad is delivered. They care about whether it was engaging and additive to their consumption experience. Programmatic allows marketers to effectively reach their target audience at scale, but creative needs to work in harmony with programmatic to maximize advertising effectiveness. Producing engaging, inspiring and even disruptive ads is a different skill set and one that needs to be delivered against a creative objective.

Today, delivering ads programmatically is the most effective and efficient way to interact with an audience and measure success against business objectives at scale. As Muir of Sherpa said, “What programmatic does in digital is share that black-box thinking with the team trying to produce the creative and put the rubber on the road. It’s replacing the Excel spreadsheet presentation containing the media laydown to something you can interact with, come up with the right answer for customers and connect it with the rest of the business.”

It’s insight that is not possible through manual advertising.

However, as the technology continues to grow, the industry needs to keep enhancing its effectiveness to fit with the ever-changing digital landscape and address the challenges that come with it. One of the most prominent challenges is creativity.

“How exciting we’ve got an opportunity [with programmatic] to be able to learn and know so much about consumer behavior,” Benedict said. “Let’s put it back into the way in which programmatic advertising is reaching people on a daily basis and make the most out of the fact that we are now understanding what their journey is … and exploit it. Make it fun and inspiring.”

The effectiveness of programmatic cannot be disputed. Programmatic allows us to understand the media journey better than ever before and have one-to-one conversations with individuals. But, like any new tech, it’s continually developing and adapting to changing consumer needs and environments. As an industry, the effectiveness of creative needs to be addressed and progressed – this is the next stage in the evolution of digital advertising we would all like to see happen.

Follow The Exchange Lab (@exchangelab) and AdExchanger (@adexchanger) on Twitter.

3 Comments

  1. With transaction costs above 50% the answer is pretty simple: It is not effective if the publisher receives in certain cases just one dollar out of nine.

    Reply
  2. Yariv Drori

    Sure... Audience targeting technology is failing to live up to its hype, lets blame creative!

    Reply
  3. Yariv, I don't think Tim is "blaming" creative - rather, he's simply stating that while programmatic is effective in the ways the ads reach the consumer, if the creative doesn't engage the consumer, it doesn't matter because the ad isn't capturing the consumer's attention and thus the required action/KPI is not happening. Both the targeting and the messaging need to work as one in order for the ad to be effective.

    Reply

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