Last week, I stood onstage at Mobile World Congress and gave my take on the current state of programmatic advertising. Despite rapid growth, programmatic’s current report-card is decidedly mixed. On the one hand, our industry has delivered well on its pledge to bring scale and efficiency to digital marketing. But in other ways, programmatic still feels stuck in the same place it started.
Over the last decade, the programmatic story has been one of high excitement, rapid adoption and huge investment. But with so much emphasis on growth, there’s been little time for exploratory innovation and refinement, and to date the promise of programmatic for smarter advertising has yet to be truly realised.
During that same decade, the interaction between brands and consumers has grown immensely more complex. In 2016, marketers need to engage across a multiverse of different devices, apps, websites, and media owners. As a result many are now at the limit of what they can achieve with their Demand Side Platform (DSP) and are using multiple and overlapping technologies, that add further complexity and cost, as they try to achieve their unique goals.
Our industry has not sufficiently questioned this early emphasis on automation and cost reduction. As a result, marketers find themselves caught in a perpetual ‘refresh’ of the same ‘black box’ approach, in display, mobile, video etc. The orginal DSP model offers little transparency into the way it operates and nothing in terms of the level of differentiation that today’s brands require to succeed with their audiences. Despite grand claims of machine learning and smart algorithms, it’s a fact that most DSPs today remain optimised to the days of 2007, with media price and efficiency still ranked above all other considerations. The generic algorithms at their core pursue efficiency over differentiation and offer a limited toolset for marketers in 2016. That’s something that will no longer suffice.
In this increasingly ad-hostile world, opportunities for consumer engagement are becoming more fleeting. The brands and advertisers that win will be those that make smart use of their own market insights and data, plugging these into their communications planning in a way that allows them to individualise. Opening up the black box empowers buyers to move with confidence and agility to stay ahead of the pack, harnessing the opportunity that data (and smart data science) can provide.
With more than 50 per cent of display inventory traded programmaticly in multiple markets we have crossed the tipping point. Now that everyone is doing programmatic, how you use the technology becomes a meaningful point of difference in campaign success. The need for differentiation and inviduality for brands is imperative – and programmatic in its current state won’t make that happen. It’s up to our industry to reimagine the DSP so that it can match the actual conditions on the ground for marketers. Our industry can usher in a more adaptable, transparent and much less complex approach where technology lets marketers customise the way they use it, and gives them near-infinite flexibility at near-zero marginal cost.
We need to push beyond programmatic into a new era of programmable marketing. But how should we define ‘programmable marketing’? And how exactly is a ‘programmable’ DSP different from a ‘programmatic’ one?
For starters, a programmable DSP no longer keeps social, display, mobile, video and native in their own separate siloes. Instead, it brings them together to create and sustain consumer engagement across devices and with a holistic understanding of each ‘moment’. The campaign tools, metrics, and reporting are all adaptable in real time, bringing genuine transparency and control to the application of the technology. And it makes the mass of big data available to brands accessible and relevant to their digital advertising.
But the big change comes in the way that the technology is used to deliver this. Programmatic is inherently complex and the skills to make the most of the programmatic black box are in short supply. As a result, the technology decision is often shaped by ease of use rather than actual potential for impact. This is why many brands and agencies have barely progressed beyond ‘doing’ programmatic to practicing true data-driven marketing.
The programmable approach removes the need for complex coding skills and understanding of APIs to access higher functionality. Instead of hiding within the ‘black box’ or limited by a simplified user-interface, programmable marketing makes the full power of now-mature technology accessbile. This newfound ability provides brands and agencies with an ‘open system,’ one where they can plug in their first- and third-party data to bring greater insight into their campaigns, and access far greater functionality to engage their target audience successfully.
In programmable marketing, the buyer is now in complete control. They can bring their own algorithms to reflect their unique need; they can custom-create narratives and express them creatively; they can harness the totality of their data without fear that it will be misused by others. In short, the evolution to programmable shifts the focus away from using machines that automate for efficiency and aligns them with marketers’ overriding objectives: a better customer experience, a differentiated brand and a greater share of revenue.
A programmable future stands at the ready. Smart marketers, agencies, and publishers who adapt to this approach, and who hire the right data scientists to put programmable machines to work, will win against those who cling to their closed legacy technology.
Nigel Gilbert is VP Strategic Development, EMEA at AppNexus