You’ve heard it at work, you’ve probably even heard it in the coffee place you take you breakfast from those youngsters seating across from you. Sure you have heard about it, sure you feel it’s going to be important (we predict that it’s one of the top trends to emerge), but do you know what really is? Programmatic advertising has been a hot topic the last few months. People throw abbreviations like RTB (Real Time Bidding), DSP (Demand Side Platform) and BTA (Behavioral Targeted Advertising) like its something that has been around for years.
It has to do with media selling and buying in real time, however, for most people is rather confusing. So, what is programmatic?
Definition: Programmatic advertising is an intent-based, real-time buying of advertising inventory. It’s an automatically triggered event, deployed according to a set of rules applied by software and algorithms.
If you are looking for a “Programmatic for Dummies” guide, AdWeek has done an excellent job in identifying what really is, with interviews of some of the most influential marketers in mobile, and beyond.
How does Programmatic affect the mobile industry and what it means for media buyers and Ad Exchanges?
Programmatic during last years entered for good the world of mobile Ad buying. A research by Magna Global, projected that programmatic ad spending would reach past $32.6B by 2017, with a US spending increase of $16.9B. More specifically, in mobile RTB spending, including the social giants, will reach past $1t billion by the same year.
Ad exchanges try to perfect their RTB extension of their platforms and focus less on leveraging and expanding their publishing side. Advertisers are looking for that platform that will enable them to evaluate and bid on each individual impression. Truth is that now-a-day, the better your RTB platform the more publishers and agencies you will attract.
Therefore, by focusing on expanding their platform to best their programmatic buying mechanisms, really they attract more business. Every mobile advertising exchange that respects itself is in this business. Earlier last year, Millennial Media, in partnership with App Nexus, launched what they claim to be the largest advertising exchange driven by real-time data collection mechanisms (report). Such move brought them in direct competition with Google.
We have now reach an era where mobile Ad display units are bought on the fly in real time and you need to be fast, efficient and precise in order to reach your desired audience. Mobile conversions rely on the accurate reach of a blink-and-you-miss-it Ad on an user’s device, and advertisers rely on a platform that can execute precisely that.
Programmatic advertising in mobile is becoming a mainstream, but yet premium, inventory that will attract more publishers – and therefore advertisers. During this year, more and more publishers will provide inventory on their destinations for platforms that support programmatic buying through private and premium exchanges.
Programmatic video advertising in mobile is picking up
On top of the mobile media display exchanges and agencies, programmatic advertising and RTB sees a great application on video advertising (mobile video in particular). Video companies now update their platforms and products to incorporate programmatic buying technology that will help them take the big leap. Online Video Insider predicts that during 2014 almost 60% of all digital video ads will be bought programmatically.
More premium publishers will partner with video Ad platforms that host programmatic buying methods, aimed to help them automate their selling process and target premium advertisers. Europe is ahead of its game with UK leading the race and is expected to reach over 24% in programmatic video Ad spending during 2014.
Programmatic buying in the micro-location advertising business
However, and due to the fast paced industry we live at, it’s not just a matter of who is implementing programmatic buying, but rather who is doing it better at this time. Already, more than half of the US online and mobile Ad buys happen this way. Consider this; if you are a Mobile Ad Exchange not offering RTB you probably lose customers for competitive platforms as you read. Soon advertisers and media agencies will require location specific, customized data to bid on in an effort to dissolve customer fragmentation and stay on top of consumer personalization.
Companies such as BlisMedia, Placecast, Placeable and Warp.ly offer micro location targeted advertising solutions enabling advertisers to target specific audiences based on their location, preferences, user groups, content and interests, while offering programmatic buying technology to both their publishers and advertisers.
All this only makes it more blurry for the mobile advertising teams, and this will be a decisive year for who will emerge from the competition to take a clear lead in the mobile advertising ecosystem.