April 19th, 2016
‘Everything that can be traded programmatically will be’ (but a few things have to change first)
In as little as five years, all forms of ‘traditional media’ could be traded using programmatic, or automated, media buying technologies. Although resistance from the old guard, concerns around regulations, and the ongoing ‘tech fear’ (as well as headaches) is holding back the potential benefits it poses, according to panelists at today’s Ad Week Europe sessions.
Hosting the panel was Oli Whitten, Rubicon Project, SVP Europe, interim head of international, who told attendees that the ad tech behemoth prefers to steer advertisers and media owners away from the jargon of “programmatic”, instead preferring to use the term “automation”.
“Programmatic buying will be a subset of the automated movement… everything that can be traded programmatically will be,” he said.
Speaking on the panel was Jonathan Forster, Spotify, VP, EMEA, who spoke of his belief that Spotify’s ad business will be 100 per cent automated within five years, the drivers of which will be cost savings.
He also explained how up to 70 per cent of Spotify’s ad revenue came from programmatic buying technologies in certain markets across Europe, although the entire industry needs to better articulate the process of automated buying to more traditional sectors of the industry.
“We sit on a huge amount of data, because for the first time we can go out to new to existing advertisers that just simply wouldn’t be possible in traditional broadcast models,” he said.
Fellow panellist Theo Theodorou, managing director, EMEA of xAd, a company that works extensively with the out-of-home (OOH) sector, echoed Whitten’s desire for the ad tech sector to use less jargon. “’Simplification’ is a word I like,” he said. “It will be key to the adoption of 100 per cent automated trading… we need to make things easier for people.”
Martin Corke, UK Sales Director for Clear Channel, also spoke of the OOH company’s ambition to be 100 per cent automated by 2020 – all the smart players in the OOH sector will also, he noted. “This year 50 per cent of our revenue will come from 10 per cent of our (digital) inventory,” added Corke.
Also speaking about the current impact automated trading is having on its bottom line was fellow panelist David Fisher, Sky Media, head of digital, who revealed that up to 20-to-30 per cent of its display advertising revenue is generated by programmatic media buying technologies, and also claimed that up to 10 per cent of its total TV ad revenue is programmatic (through Ad Smart).
However, the prospect of serving ads into ‘traditional broadcast TV’ is being held back by concerns around regulatory compliance, plus ad mis-serving, which is a well-known phenomenon in ad tech, explained Fisher.
Spotfiy’s Forster also claimed that not all media buyers are comfortable with such a method of trading media, and prefer to opt for more established modes of trading, this is due in large part to many agencies simply not having the expertise to acquire media effectively in this way.
“Over the last years we’ve been experimenting with programmatic, but we also went the other way and decided we had to allow certain advertisers buy in the traditional broadcast way,” he added.
Despite the in-built intransigence from certain quarters of the media industry, all those participating in the panel were sufficiently satisfied that there were enough collaborative efforts for ‘old school media’ to hit 100 per cent automation within a matter of years.
“OOH is very simple, and we’d like to keep it very simple,” commented Clear Channel’s Corke. “What’s good is that we’re quite a collaborative bunch, and through things like the IPA we’re starting to see people get together and keep it simple by creating standards… it’s moving fast [towards automation].
“For instance, it’s good is that Rubicon Project is focused on the word ‘automation’, and not so much on ‘programmatic’,” he added.
Similarly, xAd’s Theodorou said what’s driving this trend is that advertisers can use big data analysis to better understand how advertising is impacting their bottom line, and even connect how digital media is affecting in-store sales and visits.