| by Rocketfuel

Programmatic is the word on everyone’s lips – but is it reaching its full potential?

Programmatic is the word on everyone’s lipsProgrammatic is the word on everyone’s lips

2013 has been the year of programmatic. This year programmatic buying has seen widespread adoption across all marketing and media segments with an IAB report showing that 85 per cent of advertisers are now using programmatic auction strategies. It’s no surprise that more and more advertisers are starting to realise the potential of programmatic.

Magna Global in November estimated that worldwide programmatic ad spending would hit $12bn (£7.4bn) this year and projected that spending would leap to $32.6 billion (£20.11bn) by 2017. I’m not surprised at all by this phenomenal growth. If this year has taught us anything it’s that programmatic is doing great things for the industry and it’s here to stay.

Programmatic buying has already done a lot for the industry. It is helping us to use technology to make sense of, optimise and analyse data at a more efficient rate than ever before. Everything is now happening instantly and we are able to act quicker and improve results within seconds, not months.

The rise of programmatic on display has been incredible, however, the real step forward this year has been the programmatic buying of mobile advertisements. People are consuming mobile media at a voracious pace. Advertising on mobile phones, iPads, and tablets can reach people no matter where they are. Programmatic buying allows advertisers to tap into the vast knowledge of wireless carriers and access valuable local information available. This information can then be used to identify market responsiveness, campaign effectiveness, and customer purchase probability.

Location-based marketing is proving to be a real mobile opportunity. However, only recently have marketers begun to realise the full potential of location based profiling. Bombarding users in one area with the same ad is not the way to go, but rather creating anonymous profiles that characterise a consumer’s commercial interest and intent, based on a holistic view of geo-location data.

The clear opportunity is to make broader observations of a typical consumer’s path through retail locations, identifying visits to particular stores. By tying additional observations from the shopper’s digital footprint into the location data, it becomes clear why savvy marketers are so excited about identifying smarter insights from mobile geo-location data to deliver the most relevant advertising through programmatic buying.

And of course we can’t forget the other huge success of 2013 – social. Facebook announced in October that revenue from advertising on the social site grew by 66 per cent to $1.8bn, with nearly half of that coming from mobile ads. Revenue from mobile ads was around $880m, compared to just $150m a year earlier. These results are not surprising at all, as Facebook has made such smart decisions in the launch of its Facebook Exchange advertising platform in terms of allowing programmatic buying of ad inventory through real-time bidding.

The industry heavily criticised Facebook when it first went public, because it still hadn’t figured out a way to monetise its mobile site, however, with the launch of Facebook Exchange advertisers are able to programmatically serve ads that feel non-invasive, but incredibly relevant to the individual. The decision to charge per insertion, instead of per impression for Newsfeed advertising is also a really smart move. The ads served are highly visible in the users’ feed, and the best part is that all their friends also see them. Facebook has taken the basic concept of a person’s friends being interested in the same products that they are, but have actioned this without impacting on a user’s privacy.

2013 has been an exciting year for the industry and with more people starting to see all the opportunities programmatic has to offer and the continued increase and importance of social platforms for advertisers, 2014 should be another great one to see unfold.

2014 Prediction in five words
Mobile, video, social, independent technology

Dominic Trigg
VP & Managing Director Europe

Tel: 0203 6511 300
Email: infouk@rocketfuel.com
Web: http://emea.rocketfuel.com/
Twitter: @RocketFuelEMEA

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