Nearly a third of publishers in the UK have not heard of programmatic advertising, according to a recent survey by tech firm AppNexus. For a technology that has been widely touted as the future of the publishing industry, this is faintly astonishing.
So what is programmatic advertising?
In a nutshell, it’s a form of online display advertising that relies on complex algorithms to set a series of criteria that when met trigger the deployment of ads. Campaigns are booked and optimised via a simple web interface.
In addition to being easy to set up, programmatic ads enable advertisers to save resources by automating their buying, and maximise the value of their inventory by ensuring their ad is being shown to only the most relevant people. The system also enables media buyers to automatically book advertising at pre-determined rates.
For online advertisers, this is a massive deal. Of those publishing professionals who have heard of the technology, 90% believe it’s the future of advertising. It’s estimated that, by 2017, 88% of mobile display will be programmatically traded.
So the system may be great for advertisers, but many Heads of Digital I speak to complain that programmatic ads have driven down CPM rates, creating what one professional described as a “race to the bottom”, where standard run-of-site ads become more and more commoditised, eating into display revenues in the process. This isn’t necessarily a problem if you have the scale of Buzzfeed, The Guardian or MailOnline, but for smaller players it’s potentially a killer.
But if programmatic ads are such a big deal, then why is so much of the industry still in the dark?
For some, it’s the age-old problem of publishers playing digital catch-up. For others, it’s a skill shortage – even within the big players, programmatic strategy is still the preserve of a handful of specialists, rather than a shared concern. Whatever their current understanding of this technology, publishers won’t be able to ignore the development for long.
Online publishers of all kinds need to realise the world is moving on. They must start thinking about evolving beyond their regular display ads tenants and developing new forms of unique advertising, partnerships that will appeal to direct clients, which can be mixed-in across their sites with automated programmatic advertising.
As the price of display ads is pushed downwards, the importance of native advertising and more complex client partnerships will only increase. The knock-on effect isn’t just one that will be felt by sales, but by editorial teams too – they’ll also need to start working with partner organisations in the long run.
For anyone looking for their next online media job move, these developments are ones on which you’d be well-advised to stay on top.