Programmatic: The Automation of the Advertising Industry

How It All Started

Automation has been around us for quite some time but its widespread adoption across marketing and advertising started around a decade ago. It wasn’t until 1992 that the first marketing automation tool from IBM named Unica was developed. That marked the beginning of a revolution, and the automation of other marketing processes such as advertising followed soon after.

When websites’ popularity grew in the early 2000s, brands found it challenging to keep track of all the advertising banners they were placing in different sites. Several adtech platforms, such as ad networks and ad servers, emerged with the purpose of automating this process and making it easier for advertisers to reach their desired target audiences. Then, in 2007, the landscape experienced a seismic shift when the iPhone was launched: in just 4 years, mobile and Internet users doubled, applications appeared, and the industry encountered a host of new challenges. That’s when programmatic first made an appearance as the veritable saviour.

Benefits of Programmatic

Programmatic introduced the algorithmic sales/purchases of advertising space in real time. By this model, different advertising technologies were used to automate the buying, placement, and optimisation of media inventory. Programmatic ads started to be placed using real-time bidding (RTB) for online display, social media advertising, mobile and video campaigns, and of late, has forayed into connected TV.

Programmatic advertising simply cut out the middlemen in the ad transacting process. ‘No human intervention’ might have sound scary in the beginning, but the benefits that came with it were simply too significant to ignore:

  1. From Media to Audience Buying – This industry shift meant that instead of deciding where an ad was going to be placed, brands could now choose which audiences they wanted to target, even if they were scattered around different sites on the Web.
  2. Increased Audience Accuracy and Reach – Programmatic advertising let brands specify their exact target audiences, with high levels of granularity, while increasing reach. Today, around 3.5 billion people around the globe browse the Internet daily and, via programmatic, advertisers have access to all of them.
  3. RealTime Insights and Transparency – In an automated ecosystem, gathering and analyzing data became more efficient and could be used to draw insights to improve the efficacy of any campaign. It became easy to track ad performance and adapt strategies along the way, if required, often in-flight i.e. while the campaign was underway.
  4. Greater Efficiency – Programmatic became one of the most efficient modes of advertising. The real-time tracking, precise targeting and incisive optimization, all clubbed together, resulted in much higher return on investment (ROI) than previously achieved.

Impact of Automation in the Advertising Industry

Shift in the role of CMOs

In today’s fast-changing world, a CMO must constantly evolve his role and broaden his expertise to keep abreast of the latest trends and technologies. CMOs will need to gain a deep understanding of these new tools, and also have to navigate the rapidly emerging topics of data privacy and compliance. As a result, there will be a need for a closer collaboration with CTOs, CDOs and CIOs.

Rise of the CDOs

The designation of a Chief Data Officer (CDO) is fairly new but the number of people assuming this position has grown threefold in the past five years. The job of a CDO is all about cultivating methods of using data for value creation and revenue generation. Since CMOs require data for their marketing and advertising activities, the two roles will continue to be ever more closely related. CMOs might spearhead the adoption of digital practices, but the CDOs will be the ones helping in establishing the platforms to put the practices in place.

Conclusion

If there’s one thing for certain it’s that programmatic is here to stay: According to Zenith’s Programmatic Marketing Forecasts, in 2019 67% of the world’s digital display advertising will be traded programmatically and the value of advertising sold programmatically will rise to US$84.9bn. Automation, in the form of programmatic, has unalterably changed the course of advertising, growing from a trending word or concept to entirely restructuring the discipline. But have we reached the pinnacle? Not quite. New technologies and data solutions continue to permeate the industry, offering novel opportunities for marketers and brands. In many ways, the best is still yet to come.

Author: Projjol Banerjea, Founder & CPO at Zeotap

Projjol Banerjea is the Founder & CPO of global data company zeotap. He is also a serial entrepreneur, an active angel investor from computer vision to fashion, and an alumni and entrepreneurship advisor to both Oxford and DePauw universities. Projjol spent the lion share of his career in the technologically advanced digital advertising industry, holding leading positions at enterprises like moboqo, Fyber, Surfin and Cummins. He holds an MBA from Oxford’s Saïd Business School, an MS in Informatics (HCI) from Indiana University and a BA in Computer Science (summa cum laude, Phi Beta Kappa) from DePauw University.

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