Programmatic technology is fundamentally changing advertising. Programmatic is an auction-based system where ads are bought and served across the web to a specific audience in real time.
Currently 20% of online ad buying occurs with programmatic technologies, but the number is growing quickly. GE sent out a brief earlier this year that they’d like to become 100% programmatic some day. P&G stated that it wants to buy 70-75% of its US digital media programmatically by the end of this year. Programmatic is starting to spread to outdoor ads too.
There are obviously huge benefits in cost-efficiency with programmatic buying, and ad tech has the potential of reaching the right audiences with the right message at the right time.
But it feels like we’re still in the awkward adolescent stage of programmatic advertising. Many brand owners are hesitant, particularly on concerns around quality of the ad inventory. There are complaints of fraud, confusion around where the ads actually show up, and lack of control over the context surrounding the ads.
My first job out of college in the 90s was selling advertising space for an English language magazine in Prague. As anyone who has worked in print ad sales knows, the process was the opposite of programmatic. It involved a lot of labor-intensive schlepping and schmoozing and haggling (and even faxed insertion orders) — the human factor. But the value that we provided to brands was editorial context. Brands wanted to be part of the reading experience we provided to our readers. There were valuable associations provided by the surrounding content.
Years later, when I worked at method, we cared about that editorial context. Telling our advertising story in RealSimple wasn’t just about the audience that RealSimple provided. It was about the associations of the RealSimple brand and how that connected with the method brand. Context mattered.
Programmatic promises to remove that type of inefficiency. It’s obviously here to stay. But it feels like programmatic doesn’t give enough credit to context. I riffed on this idea a couple weeks ago with John Battelle’s quote that “programmatic has torn audience away from its contextual roots.”
As it continues to mature, I think programmatic advertising will need to deepen its appreciation of editorial context to help brands, not just with direct response, but with brand building.
I’d love to hear your thoughts on programmatic advertising and the importance of context.
(Marketoonist Monday: I’m giving away a signed cartoon print. Just share an insightful comment to this week’s post by 5:00 PST on Monday. Thanks!)