Interviews, insight & analysis on digital media & marketing

Programmatic is going premium

According to the IAB Europe’s latest report on attitudes to programmatic advertising, the key driver to invest is access to premium inventory. And in 2020, this only became more important.

 The report says: “Advertisers who once looked mainly at display strategies, historically focused on impression and viewability, are diversifying inventory sources… to focus on clear and measurable outcomes in the forms of clicks, engagement, and conversations.”

 It also notes that total programmatic advertising spend in the United Kingdom is expected to reach 3.8 billion U.S. dollars in 2020. 

 This is just the latest indication that programmatic is maturing and becoming the de facto method of trading not just in its display origins but across all media, with out of home, audio and connected TV quickly transitioning to a real-time, digital future.

 But programmatic itself is also having to evolve to both meet the demands of media that is ‘broadcast’ rather than one-to-one, and the new rules and regulations around privacy. Advertisers, too, are demanding metrics that matter rather than binary clicks and tricks.

 In the first part of this series, NDA explored how programmatic could and should reset to rise “like a phoenix from the flames” to salvage an image beset by problems. Here, we delve further into why that matters and what it means for the future of advertising itself.

 If programmatic can crack privacy, the ecosystem, say our experts, will be the better for all. Now is the time for action, says AAX Media’s Head of Operations Otilia Otlacan.

 She says: “GDPR and CCPA have made publishers take action by partnering with CPM vendors. Publishers are focusing on user registrations and subscriptions so that they can increase their first-party data.

 “The industry is recovering by standardising universal identifiers that can eliminate the dependence on third-party cookies.”

 She says that companies such as hers, which provides a marketplace of 200+ million ad block users, who are willing to receive ads that aren’t “overly intrusive”, offer a way forward. 

“This is significant because brands have previously been able to reach these users and these are users who are young, tech-savvy, well-educated and index high in making online purchases such as through gaming consoles and online subscriptions.”

 However, one of the biggest challenges for publishers particularly is that the majority of advertising spend will continue to flow to the internet giants Google, Facebook and Amazon.

EMarketer predicts that the Google-Facebook duopoly’s share of the UK digital ad market will stand some 69.1% in 2021, up from 67.8% last year (albeit with a slight drop this year). 

“Premium and independent publishers must continue to sell the value of their content, as well as depend on their external data partnerships,” says Otlacan.

 Many publishers also relying on anonymous user data to build a more complete picture of their audiences.

 Tanya Field, Co-Founder of Novatiq says that although the authentication solutions are “really great”, they only reach around a quarter of the mobile web. “It is really important to also have ID specifically generated with the anonymised web in mind because most people will be passers-by or use the web anonymously.”

 She says that “theoretically, it enables open market access to an enriched inventory”. This is important, she adds, because she has “seen a lot of people moving backwards in programmatic this year and go back to direct sales, because for a lot of publishers there were too many transaction costs along the way”.

 Continues Field: “I’ve certainly seen lots of changes, whereby the publishers that we’re using, theoretically the programmatic infrastructure. But they are using it to manage their own direct buys that are optimised for premium.”

 The premiumisation of programmatic can also be seen in its newer channels, such as out of home. Here, the sell is different from those early days of remnant inventory, with programmatic digital out of home touted as a more flexible, dynamic solution for advertisers on the streets.

 It is also, in a year marred by the constraints of the Coronavirus pandemic, perhaps OOH’s saviour. VIOOH’s Chief Marketing Officer Helen Miall says that because of its flexibility and the ability to gather data it will prove a strong weapon in a marketer’s arsenal.

 She says: “Whilst commuting behaviours may never return to pre-COVID patterns, research around post-lockdown campaigns shows OOH continues to deliver strong results for advertisers. Brands can take advantage of the impact that OOH can deliver by leveraging accurate audience data that accounts for new behaviour patterns via their DSP, and activating campaigns programmatically.”

 In recent years the term programmatic might have proved problematic for many advertisers with fears over fraud and fake news, but at a time when marketing plans have never been more fluid nor privacy concerns so heightened, it has arguably never been more important in a premium world.