As an industry we love absolute claims about what is in and what is out, but to truly understand the future of programmatic we need to understand what it has evolved from in order to anticipate where it is going.
Since the inception of digital marketing, ads were bought and sold in the same way as traditional press. Media agencies and sales houses would negotiate a price of an online ad, dependant on positioning and duration of a campaign.
The ad banner was placed on the website and displayed for all to see. It was considered revolutionary! Today this ‘spray and pray’ approach would be deemed ineffective, wasteful and irrelevant in connecting marketers and their audiences across digital domains.
Enter the first central ad server. This progression in the digital space allowed sales houses to sell ads on multiple websites and agencies could hand pick which sites they wanted their client’s ads to be seen. There was still no guarantee that your target audience would see the banner, it was served to anyone who came to the site. Retirement health products could very well be seen by 22 year olds straight out of university, resulting in massive media wastage.
The internet boom lead to an upsurge of thousands, then millions of websites. Publishers grew quicker than advertisers, which left an oversupply of ad inventory – much of which went unsold. Just like the revolution of the ad server, ad networks became the next big thing.
Ad networks pooled inventory from all different types of publishers, making the buying easier for agencies, and giving advertisers the ability to deliver more reach. Despite the ability to advertise across the web there was one main issue, and that was targeting.
A nimble and reactive system
Digital media progressed even further, and Real Time Bidding was born (RTB). RTB allowed the buying and selling of ad inventory through real time auctions. The combination of the ability to reach an audience across the web and control through a nimble and reactive system formed the foundation of programmatic as we know it today.
Programmatic deploys artificial intelligence (AI) through machine learning to buy ads at the speed of light at scale. No humans needed. It’s basically replacing Insertion Order (IO) buys that deploy machines to do the work. Programmatic works in two ways, the buy side (demand) and the sell side (supply).
Buyers can buy media programmatically in four ways.
Programmatic has evolved beyond the realm of display advertising. Anything in its digital form can be bought programmatically. Audio, connected TV and OOH are some examples of how programmatic is informing the ability to reach audiences in a relevant way.
Data is the life blood of programmatic and allows sophisticated targeting through algorithms and technology. This mass of data collection and sharing between buyers and sellers has led to concerns over privacy and rising distrust from the online community. Few like the idea of their every move being tracked and interpreted, while this can enable advertisers to serve an audience more relevantly, too many advertisers have bluntly used the approach leaving many audiences in a bit of a creepy commotion.
The cookie question
Data is collected by way of a cookie, and without them, the current sophisticated technology used for targeting becomes obsolete. Cookies have become the universal foundation of ad tech companies to communicate with one another to enable the trading of programmatic ads. Cookies are critical to all steps of the digital advertising process, from the planning and activation of ads to the measurement of how they perform.
As ever, the digital space is constantly evolving. And just like the first ad server, new technologies are being developed to counter the over-reliance on cookies. Enter, the unique identifier solution (ID). This new technology will counter Google’s cookie depreciation.
This massive appetite for cookies has recently been brought into scrutiny following the announcement that third party cookies will no longer be supported by Google’s Chrome browser in 2022. The third party cookie is the Achilles’ heel of programmatic advertising, but we are inching closer towards a world where a cookie-dependent ad ecosystem will no longer exist.
Google’s solution to replace third party cookies is the notion of a ‘Privacy Sandbox, which will allow publishers and advertisers to continue to target ads to consumers without violating individual privacy. We will see an increase to the layering of data on the publisher’s side while publishers and media agencies will be trading more directly using programmatic guarantees or private marketplaces.
But ultimately advertisers should focus on the generation of their own first party data to ensure the best pedigree of data for their requirements.
The digital advertising space is ever evolving because data has always been essential to developing the online advertising ecosystem that drives programmatic.
Programmatic is far from dead, it’s the most alive it’s ever been! But challenge lies in how we collect and use data to drive our advertising systems.
Abraham Lincoln has often been quoted as saying, “The best way to predict the future is to create it”; if programmatic has created a system that enables the relevant use of data to best serve advertising, then the onus is on the industry to find better ways to secure better data to fuel this system.
Quanita Salie is media director at Meta Media Cape Town. She has worked in the advertising/marketing field for the past 19 years, in full service creative agencies, media independents, corporates and digital. She’s ex-AMASA CT chairperson and AMF committee member driving education within the industry. She’s passionate about training and development, having lectured at AAA, Red & Yellow and Vega and has developed several intern programmes.
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