What Does Programmatic Ad Buying Mean In A Cross-Media World?

Dave Morgan

Founder & CEO

Originally posted on MediaPost

At the MediaPost OutFront last week, when media buyer panelists were asked what one thing they would change in the media market if given the power to fix it, they came back en masse with one answer: They wanted to buy all media programmatically (and transparently).

As the online ad world has evolved over the past decade or so from dynamic ad servers to ad networks to audience targeting to exchanges to real-time bidding platforms, more and more of the online ad world has become programmatic. Or, as Merriam-Webster would define it, of the nature of or according to a program, schedule, or method.

Of course, as we learned at the OutFront, it doesnt appear that programmatic is going to be restricted to the realm of online ads alone. Earlier this week, The Wall Street Journal reported that Vistar has launched a programmatic, auction-based system for the buying of out-of-home ad placements across the U.S. And, at the Omnicom analyst meeting last week, one of the hottest topics was the growth, profitability and capital investment requirements of their programmatic media buying initiatives.

Most of us have a sense of what programmatic means in the fully digital, dynamic and real-time world of online, but what does it mean in broader cross-media, where communication channels like television are still in their infancy when it comes to digitization? This is something I spend a lot of time thinking about, so here is my take on what programmatic means in a cross-media world, and particularly for the world of TV:

Automated. It seems self-evident that the notion of programmatic assumes that significant parts of the buying and selling process be done in an automated fashion, where significant transactions are conducted through interfaces and machine-to-machine operations. Of course, this doesnt have to mean it all happens in real time. The TV infrastructure and business rules are a long way off from a real-time world. However, it should mean that many or most of the routine activities – such as the delivery of instructions to media owners, optimizing campaign inventory, or the collection and processing of post-logs – will occur in an automated fashion, faster, and with lower costs and fewer mistakes.

Algorithmic. Many of the day-to-day tactical decisions in the business of buying and selling media are based on gut, best guesses, historical truisms – and, of course, chance. Not so in a programmatic world, where algorithms drive many of those decisions, and where the machines make many choices that would be quite non-intuitive or counter-intuitive to humans. Of course, as we learned from Billy Beane in Moneyball, it is exactly those nonintuitive and counterintuitive decisions that frequently create your best trades, where you gain the biggest advantages over your competition.

Audience-based. Most non-digital media, particularly television, is packaged, sold and bought based on content and context. While it is possible to scale campaigns across different media with a programmatic contextual approach – such as buying ads on tennis content online and in magazines and on TV – one of the ways programmatic buying and selling can particularly add scale to the broader media world is to introduce the capacity to buy specific audiences, defined by data, across many different media, irrespective of content or context. This doesnt mean that audience targeting will replace contextual buying in a programmatic world. But it does mean that audience buying is likely to complement the foundational approach of buying media according to content.

Accessible. In much of traditional media, the planning and buying tools – and even the marketplace – are limited, opaque and relatively closed. Not so in the programmatic world, which recognizes that openness, transparency and widely available access to information, tools and the marketplace itself makes for a bigger, better and more efficient market. The programmatic cross-media world will certainly be more open – particularly when it comes to TV, a notoriously closed market.

Accountable. Not only does programmatic media buying and selling make the front-end of the media process more efficient – and, hopefully, more effective – it also makes the back-end tighter and more exact. By their nature, programmatic media systems should be able to provide more comprehensive, more robust and more granular data and insights about the results of each and every advertiser campaign, and be able to relate those results to their key business metrics, whether they be cross-media reach, audience duplication or correlation or contribution to sales.

I am sure that programmatic can – and will – bring more than just these five elements to the table as it becomes part of our emerging cross-media world (and they wont all start with the letter A), but these five are probably the most critical and foundational elements. What do you think?

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