tag:www.econsultancy.com,2008:/topics/ad-exchanges Latest Ad exchanges content from Econsultancy 2016-03-01T15:48:00+00:00 tag:www.econsultancy.com,2008:BlogPost/67554 2016-03-01T15:48:00+00:00 2016-03-01T15:48:00+00:00 2016: the year of programmatic creative? Glen Calvert <p>However, far less attention has been paid to the innovative element of this automated buying and selling of digital media – the creative.</p> <p>And herein lies the seed to the <a href="https://econsultancy.com/blog/67574-has-programmatic-advertising-killed-creativity-in-marketing/">merging of programmatic and creative</a>; which is the next wave of disruption and innovation to impact the digital ad industry – <a href="https://econsultancy.com/events/creative-programmatic/">programmatic creative</a>.</p> <h3>So, what is programmatic creative?</h3> <p>The software powered, automated, algorithmic approach to media buying, enabling pinpoint accuracy of people-based targeting with advanced optimisation is half the story.</p> <p>Programmatic creative is the enabling of intelligent creative, where each person is exposed to a brand’s message that adapts, changes and is personalised to them, regardless of the device or site they’re on.</p> <p>Programmatic creative enables the content of an ad to be programmatically manipulated so it’s more relevant and personal to the person it’s being served to, with a continuous feedback loop for optimisation.</p> <p>The same application of <a href="https://econsultancy.com/blog/64743-predictive-analytics-machine-learning-and-the-future-of-personalization/">machine learning algorithms</a> to decide who to target, when and on what site, will be applied to the creative messaging as well.</p> <p><strong><em>How will Programmatic Advertising impact the role of marketing professionals?</em></strong></p> <p><iframe src="https://www.youtube.com/embed/k93THhdXIIw?wmode=transparent" width="615" height="346"></iframe></p> <p>Programmatic creative optimisation enables the ad elements to adapt from various data points – such as the user’s previous surfing behaviour, their location, the time of day etc. – to change the message, font or colour in an ad.</p> <p>Programmatic creative also (and more interestingly) utilises user-specific data to enhance the messages themselves for that very individual.</p> <p>For example, showing the exact product they may like, and changing the price and offer based on who they are.</p> <p>In short, programmatic creative enables the intelligent manipulation of the creative based on what you know about that cookie ID, and the automated use of live data inside the creative so it’s increasingly personalised for the individual.</p> <p>It’s important not to confuse programmatic creative with serving dynamic ads via programmatic channels or dynamic creative optimisation.</p> <p>Programmatic creative goes beyond serving dynamic ads programmatically, it has the potential to adapt messages to individuals in real time on an on-going basis for true one-on-one communication, compared to delivering dynamic creative that is served to user segments that are predefined by the marketer.</p> <p>The critical benefit of programmatic creative is that it’ll be the only way to truly 'talk' to millions of people individually, and reach that previously mythical land for advertisers of "mass personalisation."</p> <h3>The ramifications</h3> <p>Software that can automatically build ads, optimise and personalise them, will have significant ramifications on the entire advertising value chain. It means traditional owners of marketing communications need to be prepared.</p> <p><strong><em>Has Programmatic Advertising killed creativity in marketing? </em></strong></p> <p><iframe src="https://www.youtube.com/embed/7fEj3_hG5mc?wmode=transparent" width="615" height="346"></iframe></p> <p>It’s not going to be easy. It’s a pretty well-known fact that creatives – the people designing the ad – don’t talk with the programmatic delivery teams and, therefore, don’t know if their work was effective or not.</p> <p>Some of the blame for this lies with marketers who could do more to teach creatives how their work is impacted by programmatic media plans, and the potential benefits ad tech provides without impinging on the creative process.</p> <p>Much of the focus of start-ups and innovation with digital advertising has been focused in the infrastructure, the plumbing hidden beneath that no one sees. However, with the increasing need to thwart <a href="https://econsultancy.com/blog/67076-the-rise-and-rise-of-ad-blockers-stats/">the threat of ad blocking</a>, 2016 will see much more focus on how technology can impact what we actually see, that which is delivered to consumers.</p> <p>Relevance and usefulness, without overstepping the delicate privacy line, is the key to a viable and successful online ad model.</p> <p>The impact on our industry will be huge and creative agencies should be the first to be prepared.</p> tag:www.econsultancy.com,2008:BlogPost/67517 2016-02-11T11:08:00+00:00 2016-02-11T11:08:00+00:00 How to embrace creativity in the programmatic age Maeve Hosea <p>These personas include an understated man who wants to look stylish but not fashionable, ‘aspiring fashionistas’ and ‘extreme fashionistas’.</p> <p>Tom Lancaster, senior creative manager at <a href="http://www.topman.com/">Topman</a>, oversaw the development of multiple creative executions, which then ran in parallel media placements online. The one that attracted the most interactions became optimised.</p> <p>“Programmatic allows you to run segmented work that will appeal to all of your audiences – it then optimises the creative to the version that best suits a media channel’s audience,” comments Lancaster.</p> <blockquote> <p>Taking the creative programmatic route gives you a much bigger brief and a lot more work to do, but the benefit is that when you are building that creative you can make it the right kind of thing for each target audience.</p> </blockquote> <p><a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb/">Programmatic advertising</a> is currently gaining momentum because of the attractive promise to brands of data-led real-time relevancy and accuracy in who they can target.</p> <p>By leveraging the capacities of programmatic display advertising, Topman not only targets people on key demographics such as age and profession but has found a relevant way to reach consumers on publisher and lifestyle sites beyond the usual fashion media.</p> <p>However, although creative programmatic strategy is a part of the ongoing picture for Topman, it has its limits.</p> <p>The first is the cost factor: “You have to think how much of your budget you want to spend on your creative versus your media buy,” explains Lancaster.</p> <p>“And obviously your media buy has to be sizeable enough to want to spend money on all those additional creative executions.”</p> <p>It is not only about the budgets for individual campaigns either: if a brand is taking a programmatic approach, it has to make sure it has a tailored experience to take them through to post click.</p> <blockquote> <p>If you capture someone with quite understated style but then take them to somewhere where there isn’t any of that available to them, then you may have acquired someone but you might not be showing them something that converts them.</p> </blockquote> <h3>Topman</h3> <p>Looking ahead, Lancaster sees a considerable untapped opportunity in the creative programmatic sphere. He would like to exploit the ability to embed live text with an advert, updating the copy for each type of customer and their lifestyle habits.</p> <p>He also sees the potential for serving different creatives in relation to the weather at a given IP address.</p> <p><img src="https://assets.econsultancy.com/images/0007/1698/Screen_Shot_2016-02-11_at_11.02.16.png" alt="" width="800"></p> <p>“It is all the sort of things people have wanted to do for a really long time and if you had this granular level of media buying and creative production then you would do it,” says Lancaster.</p> <p>“However, the challenge is having all those matrix of options at the same quality level: getting that ‘hero creative’ finish lots and lots of times.”</p> <h3>Right Time, Right Place</h3> <p>While some fear the implied threat to creativity that the automated nature of programmatic brings, Nicolas Roope, founder and creative director at Poke London sees it as timely.</p> <p>“It is newly available inventory coming together with concepts that already have personalisation and contextuality built in that makes programmatic exciting now,” comments Roope.</p> <blockquote> <p>Programmatic is a natural extension of storytelling in the digital space: always about some degree of interaction, some degree of personalisation, some degree of contextuality and timeliness.</p> </blockquote> <p>With creative programmatic, those key principals of time, place and context can be applied at scale, giving mass reach to personalised advertising.</p> <p>Essentially, it allows brands to get more relevant and creative and Roope sees that creativity flourishing in the work of Unilever’s Axe brand in Brazil.</p> <p>The brand recently leveraged programmatic adverts to serve online viewers with up to 100,000 variations of its “Romeo Reboot” advert.</p> <p><iframe src="https://player.vimeo.com/video/131929702?color=fcfbfa&amp;title=0&amp;byline=0&amp;portrait=0" width="615" height="346"></iframe></p> <p>Those variations in soundtrack, setting and plotline were part of a personalisation drive that allowed for changes to six out of the eleven scenes in the advert.</p> <p>“Fundamentally programmatic is interesting,” says Roope. “Because it highlights how limp, unintelligent advertising in a digital interactive space just doesn’t make any sense.”</p> <p>If successful, he argues, it delivers compelling creative, connecting people with the brand at the opportune moment. Roope also cites Google’s work with billboards as a valuable example of an inspiring creative approach to programmatic.</p> <p>Google trialled its DoubleClick ad technology last year, allowing premium billboard ads to be bought programmatically and passers-by to see the most relevant adverts for the time of day and location.</p> <p>“The real time quality of weather, sports and travel news was quite a surprise and interesting for people,” comments Roope. “That contextuality can be really powerful.”</p> <h3>Affinity and Desire</h3> <p>The antagonism with programmatic tends to come when you examine the formats used in most programmatic deals, which are currently much more constraining than the formats used in broadcast media.</p> <p>Within creative programmatic, you need to have very quick, low-cost adaptability for the best campaigns to work. This may call for a hundred different versions of a very similar idea and so the construct tends to be more limited and more mechanical.</p> <p>Programmatic has its place for Charles Vallance, co-founder and chairman of integrated agency VCCP, but it shouldn’t be at the expense of building a brand in full view.</p> <p>He argues that brand values and brand affinity are inextricably linked to bigger budget brand awareness campaigns.</p> <p>“We must value the advantages and efficiencies of programmatic,” he says. “But we must not have that at the expense of the colossal value of building a brand and building affinity that is shared and appreciated by a broader audience.”</p> <p>Vallance says that there are two things that communication can do: the short-term goal of selling things and the longer terms one of creating an environment of ‘buyability’ around a brand.</p> <p>“If I only ever communicate to people with the precision of programmatic, I might never make them want to buy,” he cautions.</p> <blockquote> <p>The two go hand in hand: you need broadcast or mass communication to create a collective sense of why this brand is desirable, what this brand means, what this brand stands for, and then programmatic can harness and exploit that.</p> </blockquote> <p>Shared real-time experience will never go out of style and is arguably much more valuable than automised, fragmented ones, however accurate they may be.</p> <p>“There is nothing very programmatic about Star Wars,” offers Vallance. “You don’t want 100 different versions: you want the one version that everyone is talking about.”</p> <p><strong>Creative Programmatic Conference</strong></p> <p>Charles Vallance, Tom Lancaster and Nicolas Roope will be speaking on a panel debate at Econsultancy’s <a href="https://econsultancy.com/events/creative-programmatic/">Creative Programmatic</a> event on 2nd March.</p> <p>The session will examine the opportunities and challenges of harnessing programmatic in the creative process.</p> <p><em>Please note that this article was <a href="http://www.marketingweek.com/2016/02/08/how-to-embrace-creativity-in-the-programmatic-age/">originally published on Marketing Week</a>.</em></p> tag:www.econsultancy.com,2008:BlogPost/67366 2016-01-05T01:31:00+00:00 2016-01-05T01:31:00+00:00 Three display advertising issues to watch in 2016 Jeff Rajeck <p>With so much money at stake, it's not surprising that the industry has its share of issues.</p> <p>Persistent concerns about how ads are delivered, where they go, and how ad views are priced has made it difficult for marketers to know whether to keep investing.</p> <p>To summarize what's going on in the industry, here are three of the main issues which came up for digital display advertising in 2015 - and what you need to watch out for in 2016.</p> <h3>1. Ad blocking</h3> <h4>The issue in 2015</h4> <p>Ad blocking technology has been around for a long time and it has always been controversial. As early as 2010, Econsultancy was writing about <a href="https://econsultancy.com/blog/5531-is-ad-blocking-really-devastating-to-the-sites-you-love">how ad blocking was 'killing' site Ars Technica</a>. (Which has somehow miraciously survived!)</p> <p>But the issue came up again in September 2015 when Apple started to allow ad blockers into its App Store.  </p> <p>Suddenly publishers felt like a niche technology which threatened their business would be going mainstream.</p> <p>And this fear was heightened by a <a href="https://blog.pagefair.com/2015/ad-blocking-report/">report by PageFair and Adobe</a> which shows<strong> ad blocking software usage grew 41% year-on-year from Q2 2014 to Q2 2015.</strong></p> <p><img src="https://assets.econsultancy.com/images/resized/0007/0278/adblock1-blog-flyer.png" alt="" width="470" height="254"></p> <p>This meant that there were 198m users of ad blocking software which, according to the report, would lead to a $41.8bn loss in online ad revenue by 2016.</p> <p><img src="https://assets.econsultancy.com/images/0006/8173/adblock4.png" alt="" width="326" height="298"></p> <h4>What to watch for in 2016</h4> <p>According to a <a href="http://www.niemanlab.org/2015/12/the-mobile-ad-blocking-apocalypse-hasnt-arrived-at-least-not-yet/">report from Harvard University Neiman Journalism Lab</a>,<strong> the number of people using ad blocking on mobile is very low.</strong></p> <p>Actual numbers were not attributed to any publisher, but Nieman Lab said that most respondents said the share of mobile ads being blocked was around "1 or 2 percent."</p> <p>Hardly the mobile 'admageddon' predicted.</p> <p>Neiman Lab does go on to say, though, that desktop ad blocking is still an issue. 77m Europeans and 45m Americans use ad blocking software, according to the PageFair report.</p> <p>But, <strong>new technology is now available which allows publishers to hide content from those who block ads</strong>.</p> <p>And if enough publishers use this technology, this problem may be self-correcting and 2016 will not see anywhere near $41.8bn loss in revenue.</p> <h3>2. Ad viewability</h3> <h4>The issue in 2015</h4> <p>In August, the Media Rating Council updated its viewability guidelines:</p> <blockquote> <p>The current industry standard for a viewable display ad impression is a minimum of 50% of pixels in view for at least one second, and for a viewable digital video ad impression, a minimum of 50% of pixels must be in view for at least two continuous seconds.</p> </blockquote> <p>And the IAB has agreed with this definition. IAB CEO Randall Rothenberg said <a href="http://www.wsj.com/articles/iab-ceo-randall-rothenberg-on-ad-blocking-viewability-fraud-1442836801">in an interview in September</a> that the 'debate side [of viewability] is over now' and that it's up to the publishers to implement the standards.</p> <p>The end result of this standard will be a new measurement for buying ads, a 'viewable CPM' (vCPM) which allows advertisers to only buy ads which can be seen.  </p> <p>And, you can already buy vCPMs through Google Display network.</p> <h4>What to watch out for in 2016</h4> <p>But not everyone is happy with the MRC/IAB definition. <a href="https://www.clickz.com/2015/09/16/50-of-senior-digital-execs-believe-iab-mrc-online-ad-viewability-standards-are-inadequate">A survey of senior digital execs by ClickZ</a> in September said that <strong>only about a third of respondents believe that the MRC recommendation is sufficient.</strong></p> <p>Also, <a href="http://adwords.blogspot.ca/2015/09/Enhancing-the-google-display-network.html">Google announced that it is aiming for 100% viewable pixels</a> and advertisers do not have to pay for unviewable ads. And to make that point, Google has now changed all CPM campaigns to vCPMs.</p> <p>Facebook has also announced the intention <a href="https://www.facebook.com/business/news/100-in-view-impressions-and-moat-partnership">to only charge for 100% viewability</a> and will use a third party verification service, Moat, for video ads.</p> <p>But Econsultancy's Patricio Robles points out in a <a href="https://econsultancy.com/blog/67246-advertisers-willing-to-shift-spend-over-viewability-report/">recent post</a> on the topic that "advertisers should ultimately be basing their investment decisions on whether or not the media they're buying is moving the needle or not."</p> <p>That is, if you're segmenting your audiences and measuring properly on the back end, then viewability should not affect you very much.  </p> <p>If the ads aren't showing, you won't get the same results and you'll stop spending money on that platform, presumably.</p> <h3>3. Inappropriate ad placements</h3> <h4>The issue in 2015</h4> <p>And finally, inappropriate placements came up as an issue in 2015.</p> <p>When display ads are bought programmatically, they may end up in a very bad location due to placing by interest or keyword.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/0281/picture1-blog-flyer.jpg" alt="" width="470" height="311"></p> <p>This also causes a problem for brands when publishers are not entirely ethical. Here is a Singtel ad appearing on a site which offers illegal streaming of sporting events.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/0282/singtel-inappropriate-ads-blog-flyer.png" alt="" width="470" height="295"></p> <p>And it's not a small issue for brands.</p> <p>In a <a href="http://www.mumbrella.asia/2015/12/programmatic-rated-as-more-important-capability-than-creativity-for-agencies-in-the-future-finds-survey/">recent AppNexus survey</a> in APAC, the biggest challenge to using <a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb/">programmatic buying</a> more was 'the fear of adverts appearing on undesirable sites' and the third most important issue was 'lack of of transparency on where advertisements end up'.</p> <p><img src="https://assets.econsultancy.com/images/resized/0007/0284/programmatic-issues-blog-flyer.png" alt="" width="470" height="304"></p> <p><strong>What to watch out for in 2016</strong></p> <p>Pixalate, a data platform built specifically to bring transparancy to programmatic ad buying, created a <a href="http://www.pixalate.com/sellertrustindex/">ranking index</a> for the display ad sellers based on the quality of their inventory.</p> <p>That goes some way to helping big ad buyers know the quality of the sites on which they are showing ads, but still the only way to truly ensure ads don't appear in the wrong place is to manually blacklist the sites that marketers want to avoid.</p> <p>As Singtel told <a href="http://www.mumbrella.asia/2015/10/ads-for-singtel-pg-posb-and-toyota-found-on-unlicenced-streaming-websites-highlight-failing-of-automated-media-buying/">Mumbrella</a>: “As new sites are constantly introduced, we regularly update our exclusion list to ensure that we only run advertising on relevant and appropriate websites.</p> <p>"We are reviewing the process to ensure that advertising only appears on suitable sites.”</p> <h3>So...</h3> <p>Display advertising is still a huge opportunity for marketers to raise awareness of products and services in 2016. </p> <p>It does have its issues, but it seems that ad blocking, viewability, and even publisher quality are at least being taken seriously now.</p> <p>How these issues affect brands, however, can always best be determined by the results.  </p> <p>Even in 2016, nothing will beat high-quality back-end analytics for determining return on ad spend.</p> tag:www.econsultancy.com,2008:BlogPost/67287 2015-12-07T11:32:47+00:00 2015-12-07T11:32:47+00:00 Eight ways to improve the real-time bidding ecosystem Fiona Salmon <p>Certain agencies are going further, with a goal for 100% of the digital ads they buy in 2016 to have some form of automation.  </p> <p>But while this is a huge change for the industry, more is yet to come. Currently programmatic ads are sold in a four stage priority, very neatly <a href="http://www.iab.net/media/file/IAB_Digital_Simplified_Programmatic_Sept_2013.pdf" target="_blank">set-out by the IAB</a>.</p> <p>First come the “automated guaranteed” or “programmatic direct” systems, which use technology to replicate the favourable pricing and certainty of placement of the industry’s non-programmatic direct relationships. At the bottom of the priority are the open <a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb/">Real-Time Bidding (RTB) auctions</a>.</p> <p>While the US has seen some use of automated guaranteed deals, the UK hasn’t quite been so keen, and few trading desks are demanding it.</p> <p>Moves to integrate the industry’s established ad booking systems with automated platforms could breathe more life into the automated guaranteed market.</p> <p>However, with the greater adoption and improved technology in the RTB markets, we’ve got to wonder – how long will this priority last?</p> <p><em>The real-time bidding ecosystem</em></p> <p><a href="https://econsultancy.com/reports/real-time-bidding-ecosystem/"><em><img src="https://assets.econsultancy.com/images/0006/9732/rtb_ecosystem.png" alt="" width="344" height="383"></em></a></p> <p>RTB systems have already improved to emulate some of the automated guaranteed channel’s benefits in private marketplaces.</p> <p>The more sophisticated RTB platforms are affording ad buyers far greater levels of control over campaign effectiveness, new abilities to define the requisite performance of their chosen ad inventory and great value prices.</p> <p>In fact one of the primary differentiators of the automated guaranteed marketplace is its utility when booking campaigns using non-standard ad creative.</p> <p>Yet RTB systems are also introducing <a href="http://mobilemarketingmagazine.com/vibrant-takes-in-text-programmatic/" target="_blank">more unique formats</a> which challenge even that benefit. Consequently the value of the automated guaranteed deals could be under threat, and they too may fall out of the ad buying priority.</p> <p>Much depends upon which performance criteria are made available through the RTB systems.</p> <p>Here is my wish list, and to learn more on this topic download <a href="https://econsultancy.com/training/courses/programmatic/dates/2797/">Econsultancy’s Programmatic Branding Report</a> or book yourself onto the <a href="https://econsultancy.com/reports/programmatic-branding">Programmatic Training Course</a>.</p> <h3><strong>1. More effective limits on bot fraud</strong></h3> <p>Realistically bot fraud will never be solved regardless of the channel through which the ad space is sold.</p> <p>However, it’s imperative that the fight against fraudsters continues, and the cleanest programmatic platforms should win-out. </p> <p><a href="https://en.wikipedia.org/wiki/Rutger_Hauer"><img src="https://assets.econsultancy.com/images/0006/9733/blade_runner.jpg" alt="" width="399" height="309"></a></p> <p>The simplest tactic to follow is to opt for programmatic platforms that give access to a premium network of reputable publishers.</p> <p>However, greater reporting on the legitimacy of inventory sources, instances of malware, fake impressions and masking of domain names will help the entire industry to end the scourge. </p> <h3><strong>2. More guarantees of brand safety</strong></h3> <p>In terms of brand safety, the minimum requirement for programmatic systems must be to enable ad buyers to select ad space verified by the <a href="http://www.jicwebs.org/current-priorities/brand-safety-online/161-dtsg-seal-press-release" target="_blank">JICWEBS Digital Trading Standards Group (DTSG)</a>.</p> <p>Programmatic platforms that can distinguish ad inventory that both complies with and goes beyond these standards would be extremely helpful.</p> <h3><strong>3. Combinations of targeting data</strong></h3> <p>Certain ad technologies already enable targeting based on a combination of <a href="http://www.vibrantmedia.com/en/new-large-scale-private-ad-exchange-moves-out-of-beta/" target="_blank">audience and contextual relevance</a>.</p> <p>However, easier compositing of brands’ own (“first party”) data, publishers’ (“second party”) data, behavioural targeting companies’ (“third party”) data, search string data, and the user’s precise and favourite mobile device location data will bring hyper-targeting to RTB systems.</p> <p>As so many publishers are making more ad space available programmatically it should become increasingly possible to combine targeting techniques without compromising the scale of campaigns.</p> <h3><strong>4. More native ad formats</strong></h3> <p>The functionality of ad formats directly impacts campaign performance. Currently most of the ads available through programmatic systems are the ubiquitous and indistinctive IAB banners.</p> <p>Everyone has been using these standard IAB banners for years despite complaints of banner blindness, their inherent lack of creativity, and intrusiveness.</p> <p>As more ad buyers are seeking the best performing ad formats there is a growing demand for non-standard formats which outperform IAB banners – primarily the ever improving programmatic native ads.</p> <p>However, at present most native ads find it difficult to scale across thousands of online publishers to achieve a campaign with sufficient reach across the mobile and desktop web.</p> <p>Even the automated guaranteed deals can struggle with programmatic native ads. There’s just too much offline negotiation and constant customisation for most of these formats to be involved in a truly automated marketplace.</p> <p>However, the choice of scalable, truly native ad formats available programmatically is growing.</p> <p>These are being made available through RTB systems, offering more creative and native placements to positively surprise and engage consumers. There’s no reason to think that other non-standard formats will be excluded from RTB marketplaces in the future.  </p> <h3><strong>5. Deliver viewable ads</strong></h3> <p>Comscore has verified that <a href="https://www.comscore.com/Insights/Blog/Viewability-Benchmarks-Show-Many-Ads-Are-Not-In-View-but-Rates-Vary-by-Publisher" target="_blank">the majority of digital ads never actually have a chance to be seen</a>.</p> <p>This has resulted in viewability becoming one of the fundamental performance criteria upon which ads are now being selected. Organisations such as <a href="http://www.mindshareworld.com/news/groupm-and-unilever-push-better-online-ad-viewability" target="_blank">GroupM and Unilever</a> are leading the way, with the most stringent viewability demands in the industry.</p> <p>There are whispers that certain agencies <a href="http://www.iabuk.net/about/press/archive/iab-lifts-advisory-against-trading-on-viewable-impressions-for-display" target="_blank">will start trading on viewable impressions</a> as early as Q1 2016.</p> <p>Platforms that are trialling viewability performance campaign options have sometimes seen advertisers compromise on the number of impressions they buy, and even the media titles their ads appear on, in return for premium viewability.</p> <p>However, publishers expecting to develop a higher yielding product line from “viewable cost per mille” (VCPM) campaigns in the future are likely to be disappointed.</p> <p><img src="https://assets.econsultancy.com/images/0006/9734/Screen_Shot_2015-12-07_at_11.26.31.png" alt="" width="700"></p> <p>Brands buying ads expect all of them to be seen, and don’t want to pay more for them.</p> <p>What’s more, those platforms trialling viewability performance criteria often do so on a binary basis – i.e. either the ad formats pass the Media Ratings Council’s definition of a viewable ad (“half an ad for one second”) or they don’t.</p> <p>However, that performance criteria and method devalues the performance of a great many ad formats that frequently display far more than 50%+ of every ad.</p> <p>Those ads should not be marketed as being on a par with the lowest acceptable industry standard.</p> <p>If programmatic platforms want to adopt such a binary method for identifying viewable impressions, it’s better to focus on whether 100% of the ads are viewable or not, and back it up by a service level agreement. </p> <p>Alternatively, programmatic platforms could incorporate viewability score data from providers such as Moat, which will show the full spectrum and degrees of viewability, giving essential insight to ad buyers.</p> <p>At an absolute minimum, programmatic platforms have to move away from predicted viewablility scores.</p> <p>The technology and research providers are out there to deliver precise metrics on viewability. Soon there will be no excuse not to guarantee viewability through programmatic platforms. </p> <h3><strong>6. Precise page positions</strong></h3> <p>The precise positioning of an ad impacts its value. Currently, as long as ads are displayed above the mythical fold, most advertisers will be happy.</p> <p>However, an ad placed further down a page can actually have just as much value or more if it displays within contextually relevant editorial at an appropriate point in the consumers’ engagement with the content.</p> <p>Right now, it’s likely that above the fold ad space will command higher prices than those below the fold.</p> <p>However, programmatic platforms that enable ad buyers to choose a range of page positions to display their digital ads will have an important additional control on their campaign budget as well as performance.</p> <h3><strong>7. Optimum site depths for ads to appear</strong></h3> <p>Loyalty to particular publications is dropping due to the ubiquitous sharing of deep-links on social media that take consumers directly to media titles’ articles.</p> <p>Many people will view just one page of a media title before returning to what they were previously doing, or moving onto a different site.</p> <p><img src="https://assets.econsultancy.com/images/0006/9735/Screen_Shot_2015-12-07_at_11.27.45.png" alt="" width="700"></p> <p>This signifies that it’s less important – and arguably less valuable – for ads to appear high up in the media title’s page hierarchy, such as on the homepage.</p> <p>Programmatic platforms enabling advertisers to select the site depth at which their ads should be displayed will give enormous control to marketers.</p> <h3><strong>8. Optimum session depths are different</strong></h3> <p>Just as it’s essential for an ad to appear at the opportune page depth and site depth, it is also important to calculate the timing of an ad’s display within the user’s session.</p> <p>Many ad buyers will typically pay more through direct deals with publishers to have their ads displayed early in a user’s session, implying that they are the premium slots.</p> <p>However, the more engaged consumers are with a particular subject matter generally indicates that they are more valuable to relevant brands.</p> <p>It will depend upon the ad campaign, of course, but it’s very possible that the later an ad is delivered to the user, the more that user has qualified themselves as being valuable to the brand.</p> <p>This could well mean that the ads will be displayed to fewer people, but the fact that they are displayed to a targeted user can in turn qualify those ad impressions as better value for money to the advertiser.</p> <p>If programmatic platforms offered page, site and session depth controls we’d soon find the campaign sweet spots – where ads are displayed at the precise points in users’ sessions to be both qualified and most open to engaging with an ad.</p> <p>Ultimately the programmatic markets will be rationalised into unified platforms. How quickly depends upon how fast new performance criteria and KPIs are made available through RTB systems.</p> <p>Once ad buyers can make ad campaign choices based on more solid data and the actual performance criteria of ad inventory, so RTB systems will enable the purchase of the most premium inventory. </p> tag:www.econsultancy.com,2008:BlogPost/67050 2015-10-14T02:01:00+01:00 2015-10-14T02:01:00+01:00 Programmatic advertising: A brief history & predictions for the future Jeff Rajeck <p>But before we start, I'd just like to highlight that Econsultancy will be hosting a webinar on the subject, <strong>Programmatic: Trends, Data and Best Practice (APAC)</strong>, on 15 October at 10am Singapore / 1pm Sydney time.  </p> <p><a href="https://econsultancy.com/events/programmatic-trends-data-and-best-practice/">Click here to book your spot.</a></p> <h3>Why programmatic?</h3> <p>It's good to know <a href="https://econsultancy.com/blog/67018-programmatic-advertising-in-apac-an-introduction">what programmatic ad buying (or 'programmatic') is</a> and estimate <a href="https://econsultancy.com/blog/67040-how-big-is-the-programmatic-advertising-market-in-apac-stats">how big it will be in the future</a>. But to achieve a deeper understanding of the topic, it's helpful to look at the circumstances which have caused programmatic to exist.  </p> <p>That is, why do we have programmatic buying? Isn't our existing ad infrastructure good enough?</p> <p>To answer that question, we need to go back - way back - and track the evolution of the online advertising</p> <h3>A brief history of advertising on the web</h3> <p>The first banner ad appeared in 1994 on the website Hotwired. And, according to legend, the format was so new and revolutionary that it had a 44% click through rate.  (As a comparison, banner ads today get .06% click throughs - more than a 99% decrease).</p> <p><img src="https://assets.econsultancy.com/images/0006/7951/first_banner_ad.jpg" alt="" width="500" height="67"></p> <p>By 1996, many more people had joined the web and the number of websites grew enormously. Brands, which initially negotiated ad deals with popular sites, found it increasingly difficult to keep track of their banners.</p> <p>Because of this problem, DoubleClick, among others, created 'ad servers' which helped to produce and distribute ads on the web.</p> <p>But as the web kept growing, it became difficult to manage the various relationships required to serve ads across different websites.  So in 1998 the first 'ad networks' were born.  </p> <p>The ad networks helped brands advertise on many websites through one ad dashboard. The media landscape became manageable once again.</p> <p><img src="https://assets.econsultancy.com/images/0006/7952/valueclick.png" alt="" width="218" height="112"></p> <p>But by the late 90s, with the dot-com boom, the web was growing too fast for these networks to keep up. Web crawlers and portals, like Excite and Yahoo, emerged to index and categorize the web, but many felt at the time that the web had become too fragmented for effective advertising.</p> <p>By 2000, though, Google had developed a search engine which, almost miraculously, made the ever-expanding web accessible again.  </p> <p>And then in 2000 Google, the great organizer, launched AdWords. AdWords was sharply different from the ad networks as it delivered ads against just about every site on the web - while the user was searching.</p> <p>It made effective advertising possible again.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7953/adwords-blog-flyer.jpg" alt="" width="235" height="98"></p> <p>Google followed on by developing its own massive banner ad network (AdSense) in 2003, so with relatively simple interfaces brands were able to reach just about the whole web.</p> <p>Video advertising followed in 2006 with YouTube, and soon after Facebook started delivering ads against the social graph.</p> <p>Of course, I am skipping over a lot of details here but by 2007, it looked like things were pretty much under control.  </p> <p>Every time the web became more complex, new technologies emerged to organize the media landscape and help advertisers reach their audience effectively.</p> <h3>And then things changed</h3> <p><img src="https://assets.econsultancy.com/images/resized/0006/7970/iphone-blog-flyer.png" alt="" width="470" height="301"></p> <p>In 2007 Apple launched the iPhone and Google followed shortly after with the Android OS, and over the next four years, the whole game changed.  </p> <p>Have a look at this chart to see what I mean:</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7954/rise_of_smartphones-blog-flyer.jpg" alt="" width="470" height="258"></p> <p>Over the four years or so after the launch of the smartphones, the price of internet-connected devices plummeted, ownership spread like wildfire and internet usage has skyrocketed.</p> <p>And between 2007 and 2011, the number of internet users doubled.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7955/number_of_internet_users-blog-flyer.png" alt="" width="470" height="235"></p> <p>And daily usage grew by 50%.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7956/time_spent_online_2008_2015-blog-flyer.png" alt="" width="470" height="309"></p> <p>And we are not done. Internet users are set to double again this decade, from 2bn in 2010 to over 4bn in 2020. </p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7957/internet_mobile_in_2020-blog-flyer.png" alt="" width="470" height="249"></p> <p>And usage, as we can see above is on an upward trend as well. </p> <h3>How we consume media has changed too</h3> <p>And this proliferation of devices and growth of time spent on the internet is not the whole story. We also consume our media differently now as well.</p> <p>With mobile devices, we now access the internet on-the-go and in random places and are subject to constant distractions. We consume media more in the 'stream' of social, messaging apps, or short videos, and less in a nicely-structured HTML page.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7958/mobile_usage-blog-flyer.png" alt="" width="329" height="201"></p> <p>All of this adds complexity and brings us back to an environment that's incredibly difficult for brands to figure out, and means we are less effective at measuring advertising ROI. </p> <h3>What are we going to do?</h3> <p>To see what is going to happen, and what we should do, we need to look back to the history of online advertising.</p> <p>From 1994 to 2007, the web grew and became much more complex just like now, and new technologies emerged to help advertisers navigate the new media landscapes.</p> <p>Ad servers helped serve banner ads more efficiently. Ad networks organized publishers. Google indexed the whole internet - and let us advertise on it.</p> <p>So how might this possibly happen again? How are brands going to reach consumers in such a fragmented media landscape this time?</p> <h3>Here's what we need to do</h3> <p>I believe the answer lies in the programmatic ad buying infrastructure that is being developed right now. If you look at the diagram below (and please read <a href="https://econsultancy.com/blog/67018-programmatic-advertising-in-apac-an-introduction/">the previous post</a> for details), you can see the building blocks for the future of online advertising.</p> <p><img src="https://assets.econsultancy.com/images/0006/7747/programmatic-ecosystem.png" alt="" width="640" height="248"></p> <p>The SSPs will hide the complexity from publishers and the DSPs will do the same for advertisers.</p> <p>Trading desks will deliver the single point of contact experience for those who need it and first and third party data will be managed by DMPs. Analytics and optimization will be available at every node to help with ROI.</p> <p>In short, with such an infrastructure brands can concentrate on the message they wish to deliver and who they wish to reach, and technology will take care of the rest. </p> <p>Now some sites, notably Google and Facebook, have a different approach.  </p> <p>They are attempting to organize the web once again and offer brand marketers simple, yet powerful, access to their network.</p> <p>But if mobile devices, usage, and behavior keep changing at the same rate, I think the distributed programmatic environment is a much more robust solution. It offers a high-level abstraction of the core components necessary to deliver advertising across a complex array of devices, interfaces, and publishers.</p> <p>Whether we have the actual products now is debateable, but the architecture that is evolving does makes sense and, by many accounts, it is set to take over display in the next few years.</p> <p><img src="https://assets.econsultancy.com/images/0006/7883/3.jpg" alt="" width="345" height="321"></p> <h3>So now what?</h3> <p>Well, if you feel like you're late to the game, you're probably not.  </p> <p>As Mary Meeker showed in her 2015 Internet Trends Report, mobile advertising is severely lagging behind other mediums if you consider time spent vs. dollars spent. </p> <p><img src="https://assets.econsultancy.com/images/0006/7960/mobile_under_indexed.png" alt="" width="452" height="337"></p> <p>And as most mobile advertisting will soon be programmatic, according to a <a href="http://www.emarketer.com/Article/Mobile-Programmatic-Display-Ad-Spend-Eclipse-Desktop-Automation-Grows/1013090">recent eMarketer report,</a> if you can capture that time spent on mobile with programmatic advertising you are probably still ahead of most others.</p> <p>If you're wondering where to start, ironically the best place may be on Google and Facebook. I say this because even as they try to absorb the web into their own sites, they now offer 'programmatic lite' ad engines.</p> <p>And by becoming familiar with the vast features and analytics available on those platforms, you will be preparing yourself for more complicated programmatic ad buying in the future.</p> <h3>The future of programmatic</h3> <p>Of course there are many other challenges for programmatic. It's facing big issues from <a href="https://econsultancy.com/blog/67019-12-alarming-ad-blocking-stats-that-reveal-the-size-of-the-problem/">ad blocking</a>, ad-free messaging apps, and privacy concerns. </p> <p>But keep in mind that the web has always seemed a difficult place for advertisers. New technology has organized the chaos before, though, and it seems likely that it will do it again.</p> tag:www.econsultancy.com,2008:BlogPost/67020 2015-10-13T15:31:00+01:00 2015-10-13T15:31:00+01:00 Why Instagram should be the channel of choice for marketers Stephanie Carr <p>Are digital marketers witnessing a watershed moment for Instagram? 200 countries have access to <a href="https://econsultancy.com/blog/66689-how-brands-are-using-instagram-ads/">Instagram ads</a> and further international expansion is expected.</p> <p>By completely opening up its ad platform to all marketers and third party platforms, Instagram is marking a profound shift in its advertising model.</p> <p>This is a fantastic opportunity for advertisers to easily reach an engaged and fast growing community of 400m users.</p> <p>The benefit for Instagram is clear. The move will help it tap into potential ad revenue. But what does it mean for marketers, brands and importantly Instagram’s users?</p> <p>Below, I’ve outlined the key takeaways for each of these groups. </p> <h3><strong>Marketers</strong></h3> <p>Marketers with access to Instagram’s Ads API will now have unprecedented control over their social budgets.</p> <p>Previously, marketers would have to buy advertising space via an Instagram sales representative, which was a slow process and has held back <a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb/">programmatic buying</a> through the platform.</p> <p>Now, this is very much a possibility and marketers can optimise and manage their campaigns more effectively.</p> <p>The easy access that marketers now have to Instagram’s valued community is ground-breaking. Instagram is being treated as a targeting placement option for Facebook ad sets.</p> <p>So with just a click of a button, marketers can replicate their existing Facebook ads on Instagram.</p> <p>This means marketers can use the <a href="https://econsultancy.com/blog/64845-seven-dos-and-don-ts-of-custom-audience-targeting/">audience targeting capabilities of Facebook</a>, removing the guesswork and friction of launching on a new publisher.</p> <p>This tailored approach means marketers will more easily ensure KPIs are met.</p> <p><img src="https://assets.econsultancy.com/images/0006/7730/NET-A-PORTER_LONDON_FASHION.JPG" alt="" width="796" height="592"></p> <h3><strong>Brands</strong></h3> <p>Brands that use a platform with access to Instagram’s Ads API have the opportunity to engage directly with their fans in real time.</p> <p>For example, Helen McGee, Head of Marketing International at Net-A-Porter commented:</p> <blockquote> <p>The Instagram Ads API allows us to target a very specific European audience within 24 hours of our events.</p> </blockquote> <p>Net-A-Porter can now drive better brand awareness, and importantly share exceptional fashion content with its customers.</p> <p>By using just one interface to manage ads across various platforms, brands can significantly improve the speed of ad deployment.</p> <p><strong><img src="https://assets.econsultancy.com/images/0006/7731/NET-A-PORTER_INSTA.JPG" alt="" width="916" height="596"></strong></p> <h3><strong>Users</strong></h3> <p>Finally, perhaps the greatest impact of a more open advertising structure is on Instagram’s users themselves.</p> <p>Brands have a responsibility to use this opportunity to deliver a positive user experience and keep the audience engaged, especially as advertising on the platform is still a relatively new concept. </p> <p>This can be achieved by using rich visuals and considering other creative options such as image format (square, portrait, or landscape) and the viability of using the same creative across audiences and platforms.</p> <p>Marketers that target users effectively with relevant content will inevitably be rewarded.</p> <p>While Facebook will continue to dominate the budgets of advertisers to great effect, this shift by Instagram now provides an attractive alternative.</p> <p>With Instagram revenue expected to equal a tenth of Facebook’s total ad revenue by 2017, by maximising the options available and diversifying spend, marketers will increase the efficiency of their ad placement. </p> <p> <img src="https://assets.econsultancy.com/images/0006/7740/Instagram_s_5th_Birthday_infographic.png" alt="" width="1000" height="500"></p> tag:www.econsultancy.com,2008:BlogPost/67040 2015-10-13T02:01:00+01:00 2015-10-13T02:01:00+01:00 How big is the programmatic advertising market in APAC? [Stats] Jeff Rajeck <h3>Webinar announcement</h3> <p>But before we start, I'd just like to highlight that Econsultancy will be hosting a webinar on the subject, Programmatic: Trends, Data and Best Practice (APAC), on <strong>15 October at 10am Singapore / 1pm Sydney time.  </strong></p> <p><a href="https://econsultancy.com/events/programmatic-trends-data-and-best-practice/">Click here to book your spot.</a></p> <h3>A refresher</h3> <p>If you're not already familiar with programmatic, then we suggest that you take a look at our previous post (<a href="https://econsultancy.com/blog/67018-programmatic-advertising-in-apac-an-introduction/">Programmatic advertising in APAC: An Introduction</a>) so that you can become familiar with the elements of programmatic. </p> <p>In particular it's important to understand the participants, the systems, and the acronyms and how all the pieces fit together.  </p> <p>In short, the diagram below should make sense. That way, you know what we are talking about when we say 'programmatic'</p> <p><img src="https://assets.econsultancy.com/images/0006/7747/programmatic-ecosystem.png" alt="" width="808" height="310"></p> <h3>Our goal</h3> <p>The goal of this post, however, is to try and come up with an estimate of how big the programmatic market will be in APAC in the next few years. And to be precise, we'll aim for the size of the market in three years' time, 2018.</p> <p>We want to know this in order to determine just how important programmatic will be to digital marketers.</p> <p>And the reason to look at 2018 instead of current figures is that the market now is quite small, but with the spread of technology and data we expect it to become much larger.</p> <h3>First, data on US digital marketing spend</h3> <p>To get started, have a look at this eMarketer chart about US programmatic spending on display. It shows that by 2017, 83% of display ads in the US will be bought programmatically.</p> <p>3<img style="vertical-align: middle;" src="https://assets.econsultancy.com/images/0006/7883/3.jpg" alt="" width="345" height="321"></p> <p>Now if we consider that display makes up around 50% of the US digital ad spending, that means that<strong> in 2017 over 40% of the US digital ad budget will be spent on programmatic ad buying.</strong></p> <p><img src="https://assets.econsultancy.com/images/0006/7884/4.jpg" alt="" width="442" height="451"></p> <p>If that's true for APAC - and part of your job is buying digital ad space - then you need to get with the programmatic quick, or else risk being left behind.</p> <p>But is that the case? Will programmatic ad buying have 40% market share in APAC in 2018? Let's have a look.</p> <h3>Programmatic in APAC</h3> <p>Before we go too deep, I would like to point out that figuring out how much marketers spend on programmatic buying in APAC is tough. This is partially because it's a relatively new topic and few studies have been published on the subject. </p> <p>Also, programmatic buying is largely done by big companies and agencies, who don't readily share spending figures and results.  </p> <p>And to make it even more difficult, the ad buying platforms are fragmented so there isn't a single figure we can all look at.</p> <p>But I have managed to dig up a few fragments from in-depth reports and I will attempt to assemble them into a picture of the size of the APAC programmatic market in 2018.</p> <h3>Magna Global programmatic report</h3> <p>To see how much APAC spends on digital advertising, it's useful to start with other figures from eMarketer, published in June 2014, which offers APAC digital marketing spending figures from 2012 to 2018 (estimated).  </p> <p>These figures show that the <strong>total digital marketing spend will be around $56bn for the APAC region in 2017</strong> (I'll get to 2018 in a bit).</p> <p><img src="https://assets.econsultancy.com/images/0006/7886/1.jpg" alt="" width="324" height="264"></p> <p>Next let's look at APAC programmatic spending figures from the Magna Global report, published in April 2014.  </p> <p>And, just so you know, Magna Global is the strategic global media unit of IPG Mediabrands and part of IPG, a publicly-listed (NYSE) global advertising and marketing services company. It frequently publishes the results of the surveys it conducts with partners and other third-parties.</p> <p><img src="https://assets.econsultancy.com/images/0006/7888/4a.jpg" alt="" width="432" height="314"></p> <p>So, Magna Global estimates that<strong> by 2017 APAC spending on programmatic ad buying will be 10.2bn</strong> which is around 18% of the ad buying (using eMarketer's estimate of total spend).</p> <p>And if it's true, we can all relax because it means that programmatic will still be just a small part of the APAC ad ecosystem over the next few years.</p> <h3>But...</h3> <p>But what worried me is the previous Magna Global paper about US programmatic from October 2014.</p> <p>Remember, it estimates that in <strong>2015 US digital ad buying will be over 40% programmatic</strong>. That means that US programmatic buying will have more than twice the market share that it does in Asia.</p> <p>Now, it's possible that the US will adopt the technology faster than APAC and use it more aggressively. One potential reason for this is that the US has a long history of gathering and using third-party data for marketing purposes.  </p> <p>US-based marketers, then, will be able to use their DMP to target their potential customers much more widely and effectively. Better results mean more investment.</p> <p>Yet, such a difference still seems a bit high, so I wanted to get a second opinion. I found one in another report.</p> <h3>SOCintel360 programmatic report</h3> <p>Socintel360 is a strategy research and consulting firm with analysts globally and it, too, published figures on APAC programmatic ad buying.</p> <p>The report was published at about the same time, August 2014.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7891/5-blog-flyer.jpg" alt="" width="470" height="264"></p> <p>Unfortunately, Socintel360 does not cover the same dates as Magna Global's. Instead of 2017, it used 2018 as the target date, so it will take a bit of unpacking to see how the figures compare with Magna Global's.</p> <p>SOCintel360 estimates that<strong> in 2018 Australia and China will spend $12bn combined on programmatic</strong>. That's $1.4bn for Australia and $10.6bn for China.</p> <p>In order to compare that with Magna Global we need to estimate the 2018 APAC spending on programmatic based on Magna's 2017 figure.</p> <p>As we only have the 2017 figures, we have to estimate the 2018 number. Now, if we use the rate of growth between 2016 and 2017 (31%), we can safely estimate that the Magna Global figures would show that <strong>programmatic will total $13.3bn in APAC in 2018</strong>.</p> <p>If both Magna Global and Socintel260 are correct, it would mean that China and Australia (at $12bn) would account for 90% of APAC programmatic spend (at $13.3bn) in 2018.</p> <p>That doesn't seem quite right either, so let's go back to the eMarketer figures we looked at earlier.</p> <h3>eMarketer APAC digital marketing report</h3> <p><img src="https://assets.econsultancy.com/images/0006/7886/1.jpg" alt="" width="324" height="264"></p> <p>Here we see that in 2018, Australia and China will spend $33.3bn on digital advertising, which is approximately 60% of the $56bn that APAC will spend in total.  </p> <p>That is a large share but it's significantly less than the 90% that the SOCintel figures, combined with Magna Global's, imply.</p> <p>So let's assume, instead, that the programmatic spending by country will resemble the digital spend by country.</p> <p>If we do, and use 60% for Australia and China's market share, the two countries' $12bn spend on programmatic buying offers a different picture.</p> <p>Dividing $12bn by 60% we see that<strong> programmatic spending in APAC in 2018 is actually estimated to be $20bn</strong>. That is now around 1/3 of the total APAC digital marketing spend and much closer to the estimate that Magna Global provides for the US.</p> <h3>So how big will programmatic be in 2018?</h3> <p>In order to know how big programmatic ad buying will be in APAC in 2018, it makes sense to consider both estimates.</p> <ul> <li>If Magna Global is correct, then APAC programmatic spending will be $13.3bn in in 2018 which will be around <strong>22% of the market.</strong> </li> <li>If Socintel360 is correct, then APAC programmatic spending will be nearer $20bn in 2018, around <strong>33% of the $61bn market.</strong> </li> </ul> <p>And, of course both of these rely on assuming that eMarketer is correct.</p> <h3>So...</h3> <p>Back to the original goal. We just want to know how big programmatic wil be in APAC in 2018. Should we consider it something that all digital marketers should know? Or will it be a niche skill more suitable for a specialist?</p> <p>From the data above, the results are mixed. Going by Magna Global and eMarketer's reports alone we estimate that programmatic ad buying will be around 22% of the digital ad spending in 2018. That is significant, but still probably niche.</p> <p>If we, instead, use SOCintel360's estimates it seems that programmatic will be almost a third of our digital ad budgets.  </p> <p>And if that is the case, then there is a much stronger possibility that programmatic will be more of an essential skill for digital marketers.</p> <p>Ultimately, though, we are relying entirely on projections here and need to keep in mind that methods and considerations vary from company to company, so we may not be exactly comparing the same thing. </p> <p>Also, despite market size, we may find that programmatic remains with large corporations and specialist agency 'trading desks', so again the skill won't be widely required.</p> <p>But my money is on programmatic going mainstream and it will become something all digital marketers will have to learn.</p> <p>Why? Well, I'll cover that more in my next post and <a href="https://econsultancy.com/events/programmatic-trends-data-and-best-practice/">the upcoming webinar</a>.</p> tag:www.econsultancy.com,2008:BlogPost/67018 2015-10-07T02:02:00+01:00 2015-10-07T02:02:00+01:00 Programmatic advertising in APAC: An Introduction Jeff Rajeck <p>Everyone is talking about programmatic ad buying, but with all of the unfamiliar systems, strategies, and acronyms it's a bit difficult to understand what people are saying.</p> <p>And it's even more tricky in Asia-Pacific as programmatic advertising is a new concept in the region and APAC countries are all at a different stage of adoption.</p> <p>So, in order to understand programmatic in APAC, we need to first go through what the term actually means, and then later go through where we are at in the region.</p> <h3>Webinar announcement</h3> <p>But before we start, I'd just like to highlight that Econsultancy will be hosting a webinar on the subject, <strong>Programmatic: Trends, Data and Best Practice (APAC)</strong>, on 15 October at 10am Singapore / 1pm Sydney time.  </p> <p><a href="https://econsultancy.com/events/programmatic-trends-data-and-best-practice/">Click here to book your spot.</a></p> <h3>Programmatic Overview</h3> <p>Trying to figure out what's going on with programmatic ad buying in Asia is tough. Few industry overviews are available, and the ones which do exist offer statistics which presume that you already know something about the area.</p> <p>For example, Campaign Asia-Pacific and Ipsos announced a <a href="http://www.mediaquark.com/programmatic-in-the-apac/">great headline figure</a> earlier this year: Seven in 10 marketers in Asia-Pacific use or plan to use programmatic.  </p> <p>This tells us, sure, that programmatic is becoming more popular but what does that mean?</p> <p>Well, here today we're going to start from the basics and try to unpack it. We will first look at what programmmatic ad buying is and then in a follow-up post have a look at what this means for APAC.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7735/60331596-blog-flyer.jpg" alt="" width="470" height="461"></p> <h3>First, a definition</h3> <p>Before we get into any details, it's best to start with a definition.</p> <p><strong>The term 'programmatic' typically means an ad buying process that relies on software, or programs, to buy and sell advertising space.</strong></p> <p>And that definition lets us know that programmatic uses algorithms instead of human judgement for pricing ads. But what does programmatic look like in practice?</p> <p>Well, <a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb/">a previous Econsultancy post</a> offers some help. 'Programmatic... is like Google AdWords, only it's for display ads rather than search results'. And I think that is both a useful explanation and a little bit misleading.</p> <p>Useful in the sense that if you know <em>nothing</em> about programmatic, but you know AdWords, then it helps to put it in context. </p> <p>But it's misleading because Google AdWords is fairly limited compared to a true programmatic solution, as you will soon see. </p> <h3>Next, the systems</h3> <p>To understand programmatic a bit better, we have to get beyond a high-level definition and get into the details about what makes the whole programmatic ecosystem work. </p> <h4>Advertisers and Publishers</h4> <p>First off, we have the things we all know and understand - advertisers and publishers.  These two act as you would expect.  The advertisers buy ads and the publishers sell ad space.</p> <p>It's fundamentally no different than how we operate today, but it's how the advertising is bought (i.e. programmatically) where things get interesting - and where the acronyms start.</p> <h4>Demand-side platform (DSP)</h4> <p>Any serious discussion of programmatic should include a relatively new type of ad buying system, a 'demand side platform.'</p> <p>Simply put, a DSP is a system which advertisers, or the 'demand-side', use to buy ad space. It's a 'platform' in the sense that you don't directly buy the space on the publishers, but instead input parameters (typically who you want to reach) and the DSP then, programmatically, buys the ad space for you.</p> <p>And in this way, a DSP is like Google AdWords but with the added bonus of also managing your ad buying. But AdWords is limited to using Google search traffic and a few other factors as targeting parameters. </p> <p>DSPs, however, are connected to many different networks (not just Google) and they offer targeting options beyond what single-platform publishers could offer.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7737/targeting-blog-flyer.jpg" alt="" width="470" height="282"></p> <p>These parameters can include things we are familiar with such as time of day, age ranges, or even interests. But they can go much further than that and offer new targeting options such as life events (just married or retired), recent purchases, or even the emotional content of the video they are watching.</p> <p>And DSPs also learn about the effectiveness of your targeting and can change your targeting subtly and dynamically to optimize results. </p> <p>To really benefit from the options available, though, you need another system. And we need to learn another acronym...</p> <h4>Data management platform (DMP)</h4> <p>The name 'data management platform' sounds simple, but DMPs are arguably the most complex, and most important, part of the programmatic ecosystem.</p> <p>'Data management' does sounds like something quite basic like, say, a database with an admin screen.</p> <p>But there is much more to a DMP than just managing data. DMPs also typically include data organization tools, audience builders, analytics, an optimization engines, and APIs to get data in and out.</p> <p>And with all those features, they are quite difficult to configure and manage. In fact, even sophisticated brand marketers may use a specialist agency with a media 'trading desk' to help configure and manage the platform.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7736/programmatic-ad-buying-blog-flyer.jpg" alt="" width="470" height="250"></p> <p>And proper configuration is just the start. More importantly, your DMP blends first-party (your customer data) and third-party data (from data providers) and lets you build ad audiences that you could never build before.</p> <p>For example, your first party data may be email addresses of customers who have made a big purchase at your store.  </p> <p>A DMP, with third party data, can take that data and blend it with demographic data from another vendor.  </p> <p>Then you can advertise specifically to customers who have another characteristic which you don't know about, say high disposable income, so you can target your ads to the right micro-audience.</p> <h4>Supply-side platform (SSP)</h4> <p>So now we know that the advertiser buys ads using a variety of data sources in their DMP using the capabilities of a DSP. But where do the DSPs buy the ad space?</p> <p>Let's go back to the AdWords comparison. If programmatic is like AdWords, then the DSP (AdWords) buys the ad space from Google search. So Google AdWords provides the demand and Google Search provides the supply.</p> <p>In the world of programmatic buying, there isn't just one supplier, there are millions. But with so many different publishers available, how can DSPs know where to buy?</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7746/news-blog-flyer.jpg" alt="" width="470" height="269"></p> <p>In order to make it easier for DSPs to buy ad space, publishers sign up, typically via an Ad Network, with a supply-side platform (SSP) which then manages both the ad content delivered to the site, the audience data, and paying the publisher for the use of their ad space.</p> <p>How this works is beyond the scope of this post but as, we will cover in the next post, the programmatic industry now has billions of dollars in revenue so you can presume that it works very well indeed!</p> <h3>How it works: Real-time bidding (RTB)</h3> <p>Now that we know who is involved in the programmatic ecosystem, we can now say how this all works in practice.</p> <p>The overwhelming majority of programmatic buying is transacted through a method called 'real-time bidding' (RTB). </p> <p>The way RTB works is that when someone browses a publisher's web page, they tell the SSP that new ad inventory is available. The SSP then informs the DSPs and provides some information about the person who is viewing the page. An auction then commences between the various DSPs connected to the SSPs.</p> <p>The DSPs then bid, in real-time, for that ad space according to a bidding strategy determined by the parameters set by the advertiser. The advertiser who wins the bid, via their DSP, is then given the space to show their ad.</p> <p><img src="https://assets.econsultancy.com/images/resized/0006/7738/oil-span-blog-flyer.jpg" alt="" width="470" height="202"> </p> <p>What this means in practice, is that a DSP will, programmatically, determine a bid price on behalf of the advertiser so that they are likely to win the ad space for the people they want to reach and lose the bid, thereby not spending ad dollars, on the people they don't care to reach.</p> <p>Note that this all happens in less than a second so that the person viewing the publisher's site will typically receive the ad before the page is even loaded.</p> <p>Of course there are other nuances and complexities to the RTB process, but essentially this is how billions of dollars are now spent on advertising online.</p> <h3>So...</h3> <p>So now you know the participants, the systems, and the acronyms involved in programmatic ad buying, you can see how this all fits together rather nicely in the diagram below.</p> <p>And now that we have covered what exactly programmatic is, we are ready to tackle the stats, trends, and outlook for the programmatic industry in APAC in the next post!</p> <p><img src="https://assets.econsultancy.com/images/0006/7747/programmatic-ecosystem.png" alt="" width="808" height="310"></p> tag:www.econsultancy.com,2008:BlogPost/66930 2015-09-16T13:50:00+01:00 2015-09-16T13:50:00+01:00 Five things marketers need to know about programmatic Patricio Robles <p>Here are five things marketers should know about the state of programmatic today.</p> <h3>It's still confusing</h3> <p>The number of programmatic platforms has exploded in recent years and the terminology can make a marketer's head spin. RTB, SSP, DSP, DMP, and so on and so forth.</p> <p>In short, programmatic is acronym hell, necessitating <a href="https://econsultancy.com/blog/65677-a-super-accessible-beginner-s-guide-to-programmatic-buying-and-rtb">programmatic glossaries</a>. Given this, it's not surprising that a 2014 Forrester study <a href="https://econsultancy.com/blog/66639-the-boom-of-the-programmatic-gong/">found that only 23%</a> of marketers understood programmatic buying. A year later, more than half of marketers <a href="https://econsultancy.com/blog/66759-10-fascinating-stats-about-the-programmatic-advertising-space/">still rate</a> their programmatic knowledge as very poor, poor or average.</p> <p>While many marketers are working to get up to speed, the pace of change and innovation means marketers can never assume that they have programmatic figured out.</p> <p>For example, with programmatic increasingly being used to transact video inventory, marketers are being challenged to learn the nuances between buying display inventory and video inventory programmatically.</p> <h3>Data is critical to making it work</h3> <p>If programmatic is a car, data is the fuel that makes it run. Having enough quality data can make or break a marketer's programmatic efforts and data comes from a variety of sources.</p> <p>Second and third-party data can be very useful, but for many marketers, collecting and putting to good use first party data - the data they gather from their own websites and online platforms - is absolutely critical to taking advantage of the programmatic opportunity.</p> <p>Because of the importance of data, <a href="https://econsultancy.com/reports/the-role-of-dmps-in-the-era-of-data-driven-advertising">data management platforms (DMPs)</a> are taking on an increasingly prominent role in the programmatic space as well over half of marketers believe DMPs are key to future of programmatic marketing. </p> <p><img src="https://assets.econsultancy.com/images/0006/4592/programmatic.png" alt="" width="900"></p> <h3>Programmatic inventory is increasingly diverse</h3> <p>While most programmatic inventory was remnant display inventory in the early days, that's no longer the case. As noted above, programmatic is being extended beyond display to video. And through <a href="https://econsultancy.com/blog/66226-prominent-news-publishers-band-together-to-sell-ads/">a growing number of private exchanges</a>, select marketers can programmatically purchase publishers' best inventory.</p> <p>For marketers, this means one thing: it's more and more difficult to ignore programmatic because so much inventory, and so many different kinds of inventory, are available through programmatic sources.</p> <h3>It can be expensive</h3> <p><a href="https://econsultancy.com/blog/66495-62-of-marketers-use-programmatic-for-brand-campaigns-report/">Marketers expect programmatic to deliver greater efficiency and reduce costs</a>, but as AdAge's Alexandra Bruell recently <a href="http://adage.com/article/print-edition/inside-hidden-costs-programmatic/300340/">discussed</a>, there are a number of hidden costs frequently associated with programmatic that eat up all of the savings marketers can realize on programmatic inventory itself.</p> <p>These costs include labor, agency and platform fees, R&amp;D and errant ad buys. Depending on the marketer and agencies or platforms used, programmatic can, according to Bruell, make programmatic "more expensive than ordering print ad pages or TV commercials through insertion orders and other routine methods."</p> <p>Obviously, this doesn't mean that programmatic isn't worth additional cost in some areas, but as marketers get more sophisticated and realize that programmatic is not a panacea, they are increasingly looking to ensure that unnecessary costs are minimized or eliminated altogether.</p> <h3>Programmatic is the present and future of online advertising, sort of</h3> <p>Tens of billions of dollars of ad inventory are now bought and sold every year through programmatic platforms globally. It's virtually impossible to find a major publisher, ad tech firm or agency that doesn't have some programmatic product or service on offer.</p> <p>Clearly, programmatic is already a very important part of the modern-day online ad market, and arguably it still has a long way to go before it realizes its full potential. But that doesn't mean that programmatic is <em>everything</em>.</p> <p>There will continue to exist a market for non-programmatic online advertising and while programmatic will likely shrink the size of that market over time, it's still going to be large enough that marketers will need to look beyond programmatic to be successful online. </p> <p><em>You can learn even more about the future of marketing at our two day <a href="http://bit.ly/1M8uMOA">Festival of Marketing</a> event in November. Book your ticket today!</em></p> tag:www.econsultancy.com,2008:BlogPost/66540 2015-06-05T16:13:00+01:00 2015-06-05T16:13:00+01:00 Is online advertising soon going to look like Wall Street? Patricio Robles <p>As Alexandra Bruell <a href="http://adage.com/article/media/programmatic-buying-inks-ecosystem-media-futures-market/298818/">details</a> in an AdAge piece, a number of adtech upstarts are working to build futures markets in which media buyers and sellers transact for future inventory.</p> <p>She explains:</p> <blockquote> <p>As with crude oil and corn, a futures market for digital media would invite industry players and financiers to bet, through online exchanges, on the future price of media inventory. Ad sellers could lock in sales further out, while buyers could lock in prices on inventory that they expect to become more expensive. </p> </blockquote> <p>Futures markets like those being developed by Mass Exchange and AdFin would not only give media buyers the ability to lock in pricing on future ad inventory but to profit from it.</p> <p>For example, if a media buyer purchases a block of inventory at a CPM of $20 and the price rises to $25 CPM, the buyer would have the option to sell the inventory and collect the $5 difference.</p> <p>On the other side of the transaction, media sellers could come out ahead if they sell future inventory at a premium and its price later declines. </p> <p><img src="https://assets.econsultancy.com/images/0006/3779/stock-exchange-738671_1280.jpg" alt="" width="900"></p> <h2>The good and the bad</h2> <p>Robust futures markets could be a good thing for both media buyers and sellers, particularly for certain kinds of inventory. </p> <p>As Brian Lesser, who heads WPP-owned company Xaxis, notes, there is a "massive quality fluctuation" in the market for video ad inventory, which means it might be ideally suited for futures markets. Being able to sell future inventory could also help publishers make more timely investments in content.</p> <p>On the other hand, futures markets could create a speculative environment in which outside players seeking profit gain influence. As AdAge's Bruell notes, "Those players might include hedge funds looking to bet and buy without the intention of using the inventory."</p> <p>Because of the hit Wall Street's reputation has taken in recent times, the idea of hedge funds becoming media buyers and sellers will probably turn many off.</p> <p>But <a href="http://www.bloomberg.com/news/articles/2014-11-07/high-speed-ad-traders-profit-by-arbitraging-your-eyeballs">arbitrageurs are already playing in ad exchanges</a>, and if hedge funds can help develop and bring ample liquidity to these markets, the benefits these markets offer to publishers and media sellers which intend to use inventory could be significant.</p> <p>Of course, those potential benefits probably won't be realized immediately. The companies trying to lay the groundwork for ad futures markets are young and many issues will need to be addressed. And the markets themselves could take years to grow to a meaningful size.</p> <p>But it's not too early for media buyers and sellers alike to start preparing for the day when inventory is truly no different than any other commodity.</p>