For a long time, the idea of programmatic buying has been synonymous with cheap digital inventory – a discounted way to purchase remnant inventory from publishers.
But as the industry matures, the times are a changin’! I am so pleased to see a mindset shift beginning in the local market. It’s become clear to top marketers that programmatic buying is an important way to purchase a broad range of digital inventory, even those perceived as premium placements and executions. In 2018, we will see the rise of programmatic buying continue as it shifts into media beyond digital, like TV and radio. Programmatic is now being seen as simply a buying method – the way in which one can execute any media buy.
We have already seen the blurring of lines between traditional and digital. Showmax streamed on your iPad is still TV, but TV content re-purposed as video content, which appears on a website and can be bought programmatically, is now digital. The biggest shift in this progression will come when terrestrial TV and radio are available programmatically. Many traditional broadcasters (interestingly, both locally and internationally) are in the process of developing the technological means to make their most expensive and prestigious media inventory available via a programmatic platform. Marketers who understand this programmatic landscape now are well poised to assist our colleagues in the more traditional spaces with this process.
So, in essence, programmatic buying will, in the not so distant future, be a primary way in which all media is bought, including radio and television. While different experts are attempting to predict exactly when this will happen, there is little doubt that it is a certainty. In fact, it seems inevitable that all TV media inventory will eventually be bought programmatically. According to marketingland.com: “Research by PWC predicts that programmatic TV will represent approximately a third of global TV ad revenue by 2021, whereas a study by Videology states the consensus among industry experts to be closer to more than half by that date.”
What the research says
eMarketer research suggests that in the US, 5% of all TV ad spend will be programmatic by 2019; while that may not sound like a huge percentage, it represents a growth from $640 million in 2016 to $3.8 billion by next year. This progression is hugely exciting. The current use of programmatic TV on Video-on-Demand platforms (such as Netflix and Showmax), Digital Linear TV and Video streaming (such as YouTube) means that for the first time, advertisers can optimise TV advertising campaigns through real-time, detailed data and feedback, and the same is happening in radio.
Wide Orbit surveyed more than 9000 ad buyers and media company executives about the future of programmatic radio advertising and the survey showed that “nearly two-thirds of respondents and almost 90 percent of ad buyers plan to use programmatic platforms in the next 12 months.” In South Africa, there are already options for buyers to purchase radio inventory programmatically; with two publishers launching the services in late 2017. This will undoubtedly grow in 2018, and the possibilities of this tech stack in the local market are monumental.
Benefits of programmatic
As programmatic buying filters into more traditional media types, the focus of this kind of buying is on increased efficiencies and targeting audiences, rather than driving down the price. This approach further confirms that a programmatic buy is not necessarily cheaper than the same media bought in the traditional direct buy.
With this in mind, at SouthernX @ The SpaceStation, our focus has been (and will continue to be) on making premium digital programmatic buying more fluid and competitive in terms of the type of real estate one can buy. If more valuable executions like background branding, rich media, instream and outstream video are not available programmatically, a perception is created that programmatic buying only offers cheap inventory. We are actively countering this by giving our buyers the opportunity to execute their entire buy programmatically if they wish, instead of using direct buys for what is perceived as premium and the remainder through a programmatic buy.
This year is going to be an important one for the local programmatic market. It’s the perfect opportunity for savvy brand managers and marketers to get ahead of the curve – we’ve seen time and time again that the international programmatic market largely reflects locally. The future of programmatic is here, we just have to ensure that we take full advantage of the rapid advances that will undoubtedly continue.
In 2018 the programmatic industry will continue to innovate and bring exciting new formats to the market, but we will also continue to bring exciting new formats to the programmatic medium, like TV and radio. The broadcasting formats may stay the same, but technology really is changing how the media industry works with them, now and into the future.
Paula Raubenheimer, Head of Programmatic @ SouthernX at The SpaceStation