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!)
Ferdi Zebua says
November 2, 2014 at 7:47 pmTop of mind for me is the film “Minority Report” and all the contextual billboards and animated milk-carton ads in that future World 😛
So yeah you’ve touched the point I guess, Tom, up there in your post that there would possibly be issues with audience pushback in that the audience would/could feel “annoyed” at being “manipulated”, that they would feel it “creepy” to be “targeted” so “accurately”…
On the other hand I would think this tech is a logical continuation of that old Google argument that “targeted ads are more relevant ads, and relevant ads are good ads”…
Jeffrey Slater (@Moments_Later) says
November 3, 2014 at 7:24 amWhere is the human factor in ad tech buying? How can any of this scale so that context for ads matters.
Your cartoon and blog reminded me of experiences with media buying and planning years ago. First we spent an enormous amount of time getting our message right for the target we wanted to reach.
Then, we spent so much time to find the right environments for certain snack foods brands and it took lots of work by real people.
Our brand, (Slim Jim) could not just appear where audiences demos matched with our targets, but we wanted it to be consistent with our brand’s overall tone and position. We need irreverence to thrive as a brand and some shows/placements didn’t work.
Today I have a problem with ads that interrupt me. When the tone of the message and context don’t jive, its only expedites how quickly I change the channel or turn away from the advertiser’s message.
I will say that you cartoon did make me want to eat pizza. I have no idea why but I guess subliminal messaging does still work.
Mark Miller says
November 3, 2014 at 7:32 amTom,
It’s funny you posted this when you did; programmatic has been top of mind for a lot of us here recently. A lot of clients are asking about it but not a lot understand exactly how it works or who they need to get a strong programmatic…program running. We published a blog late last week with our general thoughts on where it was headed.
The field still has some maturing to do, but I think smart organizations willing to take small risks now will be able to carve out a big advantage for themselves while others drag their feet.
Thanks for the laugh; cheers!
judy bernstein says
November 3, 2014 at 9:56 amI tend to appreciate programmatic advertising the way I do elementary school homework. It’s a great reinforcement of ideas already seeded but not (yet) the ideal context to register something complicated.
Bob Vetromile says
November 3, 2014 at 2:27 pmGreat programmatic advertising cartoon! Yes, programmatic will keep growing, and there’s no doubt, competitive pressures and improved algorithms will continue get better at matching brands with relevant, quality content.
Subhash says
November 3, 2014 at 10:33 pmThis will get addressed as “context” is fed in through programmatic channels. Alternatively, the performance of individual ads – the message, where it was shown and the user – will push the most relevant ad to the most relevant user in the right context.
I can see programmatic go that way. As you have pointed out, we are still in the early stages of evolution of this space.
One more thing, I am not sure individuals can provide context any more. The role that you played probably does not exist any more. At least not at scale.
The focus was on context and message back then. With much lesser visibility to users. In programmatic, the focus has shifted to users and message rather than context.