Programmatic buying and buying using Real Time Bidding (RTB) have been some of the big buzz words for 2014. With many publishers and agencies embracing the international trends, there has been a steady uptake in investing in the required technology and skills in order to get the most out of the latest programmatic platforms. Paula Raubenheimer looks ahead to what’s in store this year.
There are already many major media buyers in South Africa that have allocated budget to programmatic campaigns, and those who are not already buying programmatically are undoubtedly allocating budget for the new financial year.
Considering that more and more traditional mediums are consumed in digital ways, embracing advancements such as programmatic buying can only strengthen the media landscape as a whole. Beyond ensuring that your company is ahead of the convergence of traditional and digital media, buying within the RTB environment has shown a number of benefits. There are no IO’s and optimisation can be done by the buyer in real time, allowing the sales process to be fast and seamless.
In addition, the price of every impression is determined by the market and at its most sophisticated, programmatic buying allows user data to be collected, collated and related back to the agency to ensure campaigns are reaching the intended audience. It’s not surprising then, that the SA market is following international trends and embracing the programmatic buying environment.
Although programmatic buying is on the rise in South Africa, there are currently no significant statistics available on the revenue flowing through real time bidding technologies for 2014. Due to the very limited local inventory currently available, most of the money being spent by media buyers on South African eyeballs is limited to international sites with SA traffic. However, even with the limited local inventory, buyers have seen a significant growth in 2014 from the relatively low base in 2013.
Looking at international trends and growth, it is expected that digital spend on programmatic inventory in the US will grow by anything from 50% to 120% in 2015, whilst the European market is already allocating about half of all digital spend to programmatic buying. Considering that the South African market is largely driven by international trends, we can expect a fairly steep growth curve in not only the acceptance of programmatic buying but also the budget allocated to this method of buying in SA and neighbouring African countries.
We are already seeing brands testing the programmatic waters and allocating small budgets until they feel that they have found a solution that works for them. As programmatic buying allows buyers access to far more data than before, it requires buyers to understand the technology and output in order to make intelligent buys that utilise the platform to its full capability. As buyers grow more confident and their level of understanding increases, so the SA market will follow the international trends of not only increasing the programmatic portion of the digital spend but more importantly, growing the digital spend as part of the full marketing mix.
Currently, we are seeing that most serious buyers are plugging into open exchanges and bidding on South African eyeballs on international sites. However, as more local players enter the programmatic buying space, more and more buyers and sellers are opting for controlled environments to diminish the risk that comes with low CPM’s for sellers and unsafe brand environments for buyers. These controlled, exclusive marketplaces lessen the entry barriers and allow South Africa to grow programmatic buying in a safe environment.
In 2015 and beyond, we’ll see brands utilising programmatic buying to gather consumer data so that they can better understand their target audiences and their buying behaviour. Whilst programmatic buying can provide a wealth of consumer data, it will take brands time to efficiently use that data. Therefore 2015 should be used as a foundation for brands looking to leverage data; programmatic buying should be seen as a long term investment strategy and not only be measured against short term campaign wins.
While 2014 has laid the way for buyers and sellers to accept that programmatic buying is the future for media buying, it requires skill, technical and analytical ability and experience in order to fully harness the advantages it offers. This necessitates significant investment and for this reason the barriers to entry are the same for both agencies and brands; however as with any specialist skill there will be companies that decide to invest time and money in skilled programmatic teams and those who make the decision to rather outsource to experts.
Either way, early adopters on the sell side will begin reaping the benefits as they gain the technical knowledge to retain control of data collected from their users and leverage it to provide valuable, data rich inventory to buyers.
Paula Raubenheimer is the managing director of SouthernX, a media marketplace for buying and selling digital inventory.
