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Why a decline in social media use is pushing programmatic into new channels

As consumers spend less and less time on social media platforms such as Facebook, programmatic advertising is being forced to adapt, and this is driving it into new channels.

Speaking at The Drum’s Programmatic Punch event on a panel exploring the new frontiers for programmatic, Samuel Huber, founder and chief executive officer of Admix, explained how gaming is likely to establish itself as a popular channel over the coming years.

“People, especially the younger generation, are spending less and less time on social media platforms like Facebook, with only 9% of generation Z naming Facebook as their favourite social media channel,” Huber claimed. “But despite this fall, they are spending more time online overall and a lot of this time is spent on channels such as gaming, which is now a bigger category than both the music and cinema markets put together.”

He explained further: “With gaming, when a user is wearing a headset or playing a game, not only can we capture the normal static data, but we can also capture much deeper behavioural data such as where a user likes to look and how long they look for, and then feed this back to advertisers. This helps to build a more dynamic profile of a user so we can, in theory, target those users more effectively based on parameters we’re not able to really capture on other channels. It’s really exciting for the programmatic industry.”

The potential of programmatic advertising within gaming was something also echoed by Lewis Sherlock, vice president of sales at Bidstack, who believes the channel gives advertisers a chance to reach an audience that was previously unreachable. “Around 30% of the population in the most developed markets actively plays video games so the fact you can now dynamically insert ads within the ad hoardings of a football or racing game means there’s lots of potential,” he added.

“Gamers traditionally don’t spend as much time on social media or watching TV, and they’re also very into ad blocking as well. So, for advertisers, advertising within a video game is a huge opportunity to reach consumers who were previously unreachable. As the advent of cloud gaming and the ability to stream games on a device gets bigger and bigger, as well as the speed of 5G, this will allow the gaming market to scale up and will mean a bigger opportunity for programmatic advertisers to tap into.”

Another new frontier for programmatic advertising could be through music, with Spotify’s head of automation for EMEA, Zuzanna Geirlinska claiming the proliferation of connected devices, particularly smart speakers, has driven a rapid increase in user consumption of audio advertising.

“From our own sort of listener behaviour we see car streams have gone up by 55% year on year, while connected speakers are up 130% year on year. On average, people stream about two and a half hours a day of music on Spotify,” she said. “Facebook users and certain age groups are moving out of the social media space and into these new environments and that’s very interesting for programmatic advertisers.

“At Spotify we like to say your music is a mirror because it's a real reflection of you. What you're streaming in that moment and in that mindset or mood you're in, well, that's data that we're able to capture. And then with the capabilities of programmatic that real-time activation can really let brands catch users in a special moment of time, and really capitalize on that unique data set.”

Yet Geirlinska also advised: “But you shouldn’t necessarily think of audio as a standalone channel. It really should become part of your sort of holistic buying strategy. We've had some really good examples of brands who’ve layered audio onto existing display and video campaigns, and they've actually seen a marked increase in incremental lift. Across the board, we’ve found that there was a 50% increase in incremental reach of audiences by layering in programmatic audio onto an already existing campaign.”

Looking forward, Cristina Constandache, chief revenue officer at Viber, said she’d like to see programmatic advertisers prioritise more than just video and become more sophisticated in their executions. She said targeting consumers in environments like gaming or music streaming is ideal as once a user is on a platform that they find captivating and is performing very specific functions they can’t get anywhere else then they’re much more likely to be engaged than on the web or mobile, where it’s a lot easier to get distracted.

This was echoed by Adam Green, senior vice president at Broadsign, who said advertisers need to stop spending disproportionate amounts of money on programmatic on the same old platforms such as Google and Facebook, and start to expand their horizons.

“There's a danger on both sides of treating programmatic as a single tool; so for publishers to just chase fill and for buyers to just chase a price. If programmatic is an 88 key grand piano then you don't buy one just to play middle C and only middle C. It would be awfully foolish thing to do this, and the same principles apply.”

Viber, Bidstack and Broadsign were partners of Programmatic Punch UK 2019. Register your interest for 2020 now.

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