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Media and Communications

The future of programmatic advertising

The future of programmatic advertising

When a webpage loads, there are one or more ad slots on the page and they are sent out to ad exchanges and put up for auction. And essentially the highest bidder that meets the advertiser’s criteria wins that impression. Now, this has given rise to the flourishing of data management platforms, DMPs, that come about to give the advertisers the data they need to make intelligent buying decisions. So, if I can recognize that this is one of my customers who has abandoned their shopping basket with for example a television, I’m willing to bid a lot more than a regular user that is out there, because if I can win an impression and convert that user, I can generate a high value sale. Programmatic has moved beyond the sort of standard web-based display and including native advertising which is advertising it blends in with the content more seamlessly. And then mobile ad formats video etc. But it’s also starting to do what it was built to address, which are the inefficiencies in the ad market. Advertisers no longer need to call the publishers and negotiate rates, fax IOs back and forth, or wait for signatures to appear. Right now an advertiser can start to engage in what is called programmatic direct or programmatic guaranteed, where by using their DSP and clicking a few buttons, they can actually start to reserve this media directly with the publisher and purchase it automatically through their DSP. Hence, eliminating the need for IOs (inputs/outputs), email and any form of going back and forth. What’s really exciting coming within programmatic are things like addressable television. So, for example dish networks in the US are now trialing systems whereby the set-top box of the user can be queried. Right now it’s being done in an offline basis but they’re moving towards online meaning in real time. When the ad break comes up during your television program, that set-top box can be sent out to the ad exchange where buyers can, in real time, see the user make an informed decision on that and send rich media video content directly to the set-topbox and that to me is one of the more exciting pieces coming out of that. Sky in the UK are actually starting to do this already in a limited format and I see this right for expansion throughout the world. But I would also say maybe the final piece coming would be in wearable technology. Google Glass was an experiment by Google to get augmented reality in front of people. But as that starts to evolve, I can definitely see a point of sale where you’re walking down the street and you go past a shop and they can insert the ad to you if you have their loyalty card, for example. So, moving beyond mobile and directly into things like wearables is a possibility.

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