Programmatic is not a revolution, but a necessary evolution and will drive agencies, advertisers, and media owners to understand and develop new ways of collaboration.

This post is by Martin Beauchamp, MEC.

The rampant rise of programmatic would not have failed to grab your attention, the industry is buzzing with excitement around the opportunities it can deliver on. according to e-Marketer its growth is rampant and puts programmatic digital display ad spends in the UK at £1.80bn (66%) in 2015.

Simply put, programmatic is becoming the new normal and is something agencies, advertisers, and media owners must now strive to understand and develop new ways of collaboration.

UK programmatic digital display ad spending, 2103–2016
£bn, % change and % of total digital display ad spending*

programmatic digital display adspend
Note: Digital display ads transacted via an API, including everything from publisher-erected APIs to more standardised RTB technology; includes advertising that appears on desktop/laptop computers as well as mobile phones and tablets; * includes banners, rich media, sponsorship, video and other
Source: eMarketer, Sept 2015

Technology and use of data fuel the misconception that programmatic is complex when, in reality, the principles of advertising hold true; understand your business objective and use advertising to communicate this to consumers. if we take the definition of programmatic as 'an automated way to buy and sell digital media inventory that enables a more data-driven, audience-focused targeting strategy' we can begin to see that programmatic is a tool used to enable us to deliver against a strategy. yet, it is important to remember that when crafting strategies, key performance indicators are set in order for campaigns to be set up correctly and optimised to the goal.

The opportunities of programmatic are that it is measurable, and instantaneously actionable. inventory is evaluated right at the time that the impression is loaded, the machines calculate a price to bid (within the rules that have been set before the campaign goes live), based on who it is believed to be sitting behind the device, and an algorithmic anticipation of what they may do next. all in relation to what the rest of the market believes that the same person is worth in that moment.

Programmatic offers a 'test, learn and optimise' environment that can surface very real insights. these can be audience led (behaviour, interest, demographic), signal driven (weather, location, temporal, context) and creative interaction. All of which opens up the opportunity to become very smart and creative with data-driven advertising.

The challenge for brands is how they can unlock rich sources of data within their business and what other partnerships they should forge. There is no one-size fit all answer to this. An obvious starting point is the correct tagging of websites under the brand's control. Correctly set up and executed this can push the marketer's ability to target, profile, and learn about the audience and how they interact with the brand before going to the expense of implementing a Data Management Platform (DMP).

If programmatic is one buzzword in digital marketing, then a DMP is the other – usually used to converge disparate sources of data and to bring CRM data to the digital world. A DMP can be hugely valuable in connecting the offline retail world to the online commerce world and aids a deep understanding of customer and their lifetime value. Once in place, mining the DMP starts with knowing the right questions you want to ask of it, from there it becomes easier to build a strategy, how to deliver a change in customer behaviour or realise that pursuing that audience group becomes too complex and costly.

The change that programmatic is bringing to the market is not automation, but a new vista in the way digital media is planned and executed. The challenge is to:

  1. communicate the business objective,
  2. think about audience first,
  3. understand the data opportunity,
  4. is there anything particular you want to learn from the campaign,
  5. set KPIs against which brand performance can be measured,
  6. be flexible with budgets and test different strategies, and
  7. the creative is the thing behaviour seen by the audience.

Soon, programmatic will just be called digital and brands will leverage the tool to deliver, dare I say it, 'the right message, at the time, to the right person'.