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Programmatic direct to take 70%

21 January 2014
NEW YORK: Programmatic direct buying is growing fast in the US and will take the lion's share of total programmatic ad spending, a leading industry figure has said.

Dr. Mark Grether, COO of Xaxis, an agency trading desk owned by WPP, told eMarketer, that he expected the situation in the US would eventually mirror that in Europe, where programmatic direct accounts for 70% of such spending, the remainder being taken by RTB.

He explained how the change had come about: "One of the main reasons for that [change] is the shifting of dollars from performance to branding", he said. A lot of the early programmatic inventory had been bought from exchanges, as quality had been less important, but with the increasing significance of branding and video that was no longer the case.

Media buyers were now looking to buy good quality inventory efficiently while being able to overlay their own data, with the result that publishers were starting to offer programmatic direct deals, striking an agreement with media buyers on inventory and price.

"The only difference is, they're using the same pipes you would use for RTB to actually execute the buy," said Grether. "This provides the efficiencies of programmatic with the benefits of buying direct."

The sale of premium inventory through automated systems was a trend that had been noted at an Ad Revenue Europe conference in late 2013, but Henry Rowe, founder of FaR Partners, thought the area needed better insights, strategy and data.

Grether claimed, however, that many media buyers weren't actually interested in buying inventory via an auction but simply wanted to use programmatic techniques to run campaigns efficiently. "This is an area where publishers could benefit from a little bit more education on the whole area of programmatic so they can see there's a lot of benefit for them," he observed.

He also had strong words on the subject of mobile, noting that while clients were very interested in it they struggled when it came to execution.

He identified one aspect of the problem as being the lack of a proper definition of mobile. "If the ad isn't taking into account an individual's location, then I don't consider it mobile," he declared.

"Marketers need to learn how to redefine their marketing campaigns to take location into consideration," he added. "Most marketing campaigns aren't detailed enough to do that".

Data sourced from eMarketer; additional content by Warc staff

 
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