Advertisers are starting to use programmatic to unlock creative opportunities rather than just to secure cheaper media, changing how they work with their advertising agencies to thrive in an automated world, according to Xaxis chief executive of EMEA Caspar Schlickum.
To gain this depth of insight, advertisers must change how they brief their agencies and corral them to work together. “Rather than saying [to agencies] here’s some creative now go and buy some media, brands need to tell their agencies; ‘this is my audience, here’s what I’m trying to do and these are the objectives I want to achieve, using data and technology to create a dialogue with consumers,” said Schlickum, who is speaking about the trend at this year's Festival of Media.
But too few brands are wise to the shift. It takes a while to reengineer processes like these though Xaxis is seeing advancements from its FMCG, automotive and travel brands. WPP’s programmatic buying arm expects the progress to push the discipline beyond display advertising to unlock more budgets, such as using its own behavioural data to create self-assembling ads that respond to the vagaries of weather or location.
“Programmatic is still a small percentage of digital, which in turn is still a relatively small part of the total spend for a client,” claimed Schlickum. “We have a lot of clients who are starting to use programmatic more progressively but we have more who don’t yet.”
Untangling the complexities of automated advertising, while a priority for marketers, is one of a myriad of elements they have to tackle. Consequently, only the most “proactive clients” think it is no longer possible to have a centralised unit of programmatic and that the skillset needs to be pushed upstream within creative agencies, added Schlickum.
The insight harkens back to Ad Week where industry observers said programmatic would only get exciting once creative agencies and first party data got involved. Spurred by the ability to shape media plans around targeted audiences instead of channels, some marketers now realise the collaboration of agencies, media owners and brands around programmatic is key to power creative.
“At Xaxis we’re striving to find ways to add value through the tech we build, the creative ad units we develop and through new ways of targeting,” said Schlickum. “The opportunity for programmatic is much bigger than [performance]. It is really to infuse the entire marketing communications workflow with data and technology. That does require big clients to change the way that they work with their agencies.”
Xaxis has made big strides in its ability to let brands combine their own data with other sources for more accurate targeting over the last 18 months. From WPP’s stake in ad technology provider Appnexus last year to the acquisition of mobile platform ActionX in March, Xaxis is trying to forge a more flexible programmatic offering that can boost trust and confidence among its clients.
The programmatic outfit is built on an arbitrage model, meaning it uses its own technology and data to target advertisers’ clients wherever they are online, in real-time. However, Xaxis isn’t transparent about its costs of media to advertisers, which has ruffled critics to highlight the potential bias of a model whereby the agency making the recommendation on where the media is placed is also buying the media.
Schlickum said: “If we’re not providing products that are relevant then we get taken off the media plan. One of the ironies is that we get held to a far higher level of accountability than third party vendors which no one seems to give us any credit for.”
It all feeds into Xaxis' wider efforts to help retain its place in the value chain as brands consider ways to reduce the amount of intermediaries in the programmatic pot and take on more of the load themselves.
Automated advertising is at an inflection point. It can deliver a deeper understanding of the customer and is no longer solely about remnant inventory.