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What can The Archers learn from programmatic advertising?

Guy Phillipson is chief executive of the Internet Advertising Bureau UK (IAB). His monthly blog examines the latest developments in the online ad space.

At the IAB, we have a small but neatly formed Archers fan club (Ok, it’s just me and our senior industry programmes manager, Clare O’Brien).

It’s the oldest soap opera in the world, centred in the idyllic farming community in Borsetshire. One of the current subplots is the advent of robotic milking technology, and whether it’s appropriate for a small dairy. Luddite farmer David Archer is adamant that traditional ways are best, but his Geordie wife Ruth and their agricultural student daughter Pip are trying to bring him round.

This technical dilemma so reminded me of the digital display market’s initial reticence about programmatic advertising that I decided to investigate robotic milking a little further. A discussion forum on Facebook led me to some helpful advice from one Chris Atkins (presumably a progressive farmer), who writes:

“I know several small dairies (up to 120 cows) who have put robot milkers in and are doing very well with them. The cows prefer them, yields are increased and correctly set up with pedometers, the software is better at detecting heat cycles and overall health than even the most skilled dairyman. It is possible to predict health issues before the cow even knows it is unwell. Add to that the ability for the cows to choose be inside or outside as they please, it's a big improvement over a traditional parlour based system.”

Now, if Chris Atkins was running an ad tech company, the above might translate to;

“I know lots of publishers who have switched to programmatic, and they’re doing really well. It’s been good for their average CPM yield and they can set their own minimum floor rates. In fact the efficiency of programmatic means the sales guys can be more productive selling custom solutions. Plus the publisher can choose to operate in a private market place or on open RTB. Overall there are big advantages over the traditional sales system.”

Chris Atkins (the ad tech guy) would say that, wouldn’t he?!

Well, Mr Atkins, and everybody else on the RTB Lumascape chart will be delighted to hear that programmatic has caught on big time in the UK.

Our breakthrough study with MTM of Media Owner Sales Techniques (MOST) found that the UK programmatic market in 2013 was worth £500m – that’s 28 per cent of total display across online and mobile. It’s a world first “bottom up” audit of the market with input from 45 major buy and sell side players. Mobile is already 37 per cent programmatic, and video is up and coming with 16 per cent of its market. But the biggest reason to get milking (sorry!) is that by the end of this year we expect total RTB to represent 46 per cent of display. I’ll stick my neck out and predict a nice round £1bn.

On the buy side, consumer goods is our largest spending display category. And in June P&G, in the US indicated they intend to shift 70-75 per cent of their digital media buy to programmatic – that’s way ahead of the curve.

David and Ruth Archer were introduced to robotic milking of a farmers’ trade fair, and they’re weighing up the pro’s and cons now. Interestingly, 60 per cent of 2013 programmatic was direct and private marketplace, so publishers are benefitting on their own terms.

So I predict Ruth and Pip will badger David into switching to robotic milking once he’s mugged up on the potential yield benefits – especially if Borchester Land gets planning permission to build that new road through his farm land (but that’s another plot).

Guy Phillipson is CEO of IAB UK. His blog will appear here monthly

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