• wordpressseodev says:

    Programmatic advertising will grow 31% in 2017, faster than all other digital channels, according to Zenith’s Programmatic Marketing Forecasts, published today. This report, which covers 41 key advertising markets, estimates that programmatic will grow comfortably faster than social media (which will grow 25%) and online video (20%) – and a growing proportion of these other channels will be traded programmatically. Programmatic will become the principal method of trading digital display this year, accounting for 51% of expenditure, and will rise to 58% of expenditure in 2017.

    At first programmatic marketing was often used to reach target audiences as cheaply as possible, with little regard for the quality of the sites in which the ads appeared. It is now being used in conjunction with valuable data segments to target individuals in intelligent and creative ways, identifying those most likely to be receptive to a brand’s messages and encouraging them along the path to purchase, often in premium environments.

    Programmatic advertising has risen to dominate the digital display market in just a few years, having accounted for just 13% of display adspend in 2012. Programmatic adspend grew from US$5bn in 2012 to US$39bn in 2016, at an average rate of 71% a year. Its growth is slowing down as it consolidates its dominance of the display market, but we expect programmatic advertising to grow at an average of 28% a year to 2018, when it will reach US$64bn.

    The US is the biggest programmatic ad market by a long distance, worth US$24.0bn in 2016 and accounting for 62% of total global programmatic adspend. The UK comes a distant second, worth US$3.3bn, and China third, worth US$2.6bn. Programmatic trading accounts for 70% of display in the US and the UK, but only 23% in China, so there is plenty room for rapid growth in China.

    The figures in this report refer only to digital media, but programmatic trading is starting to spread into the ‘traditional’ media. Some television, radio and digital out-of-home platforms already offer automated and data-driven trading of inventory. It will take years, but eventually programmatic trading will be available as standard across traditional media.

    “Programmatic buying of digital media has become the norm in major markets, and is aggressively following this path in smaller markets,” said Benoit Cacheux, Global Head of Digital & Innovation at Zenith. “We believe that the growth of programmatic will continue to be fuelled by improvements in the quality of media available in programmatic environments – especially private market places – and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks.”

  • dev says:

    The new programmatic: Customizing the pipes

    Programmatic technology has become the pipes that connect the digital advertising industry, enabling inventory to flow faster than ever before. Like most advances in the industry, however, the initial appearance of automated media buying was met with suspicion and foot-dragging, which eventually gave way to adoption and evangelism. And, in a final sign that the programmatic evolution has unquestionably taken hold, the tactic is being customized to specific nuanced needs.

    Today, the programmatic pipes that control the automated flow of previously unimaginable amounts of digital impressions every day are being customized to serve the specific needs of advertisers and publishers of every kind. In the midst of the rapid evolution taking place in the programmatic landscape, it might be a good time to take a closer look at the various ways these pipes can now be configured, each addressing different programmatic needs and strategies.

    Open exchanges: Opening the floodgates

    Programmatic open exchanges were the first iteration of the programmatic pipeline model. The best way to think about this version of programmatic within the “pipes” analogy is to see the open exchange as a massive open pipeline, delivering automation at true scale. In the early days of programmatic media buying, this kind of automated scale became synonymous with real-time bidding (RTB), a system where the automated auction model could operate free of any modulation.

    While the percentage of digital media transactions that ran through the programmatic pipes skyrocketed, however, these transactions largely did not include coveted media budgets from brands and agencies, as they prioritized control over scale. The pipes would have to be more “hands on,” allowing ability to regulate the “flow” if a greater portion of advertising budgets were to be won over.

    Programmatic private marketplaces: Controlling the flow

    In order to service the call for more control over the speed and quality of programmatic campaigns, the industry went to work reconfiguring the programmatic pipes and created the concept of the private programmatic marketplace (PMP). Here, the massive flow of inventory is diverted across smaller groups of publishers and into specific pools based on targeted audiences.

    In this scenario, advertisers gain the benefits of the programmatic methodology while maintaining control — knowing that their ads are running within a closed set of inventory. Rather than just blindly buying programmatic inventory at massive sale, advertisers can now combine automated efficiency with some of the digital audience tactics they have become accustomed to in the direct buying model, including traditional audience targeting by behavior and demographics.

    This more customized configuration of the programmatic pipes shares the benefits of the firehose-style open pipeline and begins to deliver the flow to areas where it is most likely to achieve specific goals.

    Programmatic direct: Directing the flow

    Continuing along the arc of programmatic pipe customization is the rise of programmatic direct. Programmatic direct allows big publishers to create their own set of in-house programmatic pipes by mapping out their existing inventory and augmenting their current inventory pipeline.

    Programmatic direct pipes can be custom-built on top of a publisher’s existing inventory strategies and can be plugged into either a DSP or another programmatic demand vendor.

    This level of pipeline customization attracts publishers that want to get away from the “noise” of the open exchanges and advertisers that want to engage programmatic but also want to maintain ultimate choice over where their ads are placed. This evolving approach employs the sophistication of the private exchange tools while affording publishers and advertisers significantly more control over the process. Advertisers can now move greater budgets into the automated space but retain the one-to-one focus with which they have become comfortable.

    The trend toward customization

    The arc of programmatic customization has moved forward at what seems an amazing pace. The fact is, however, that this kind of adoption curve — from skepticism to adoption and then to customization — is really the hallmark of our industry. From the adoption of the ad network and exchange models to the evolution of targeting tactics, developments have begun on the edges and quickly migrated toward the center, where they become modified to fit the specific needs in the industry.

    To this end, the customization of programmatic pipes that are fueling this latest leap forward in the digital media space can be seen as a validation of the importance and staying power of the trend.

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