It’s no secret that when it comes to digital advertising, programmatic buying is the way of the future.
In the past five years we’ve witnessed the real-time bidding revolution: digital marketers, and direct response marketers specifically, flocked to programmatic as their preferred method of buying digital media impressions. And today, growing numbers of agencies are shifting the lion’s share of their standard display buying to programmatic through their trading desks. There’s a perception that programmatic is poised to take over digital media buying.
eMarketer projects that the programmatic marketplace will grow from $3.3 billion in 2013 to $9 billion in 2017. That’s certainly a significant growth. However, let’s not lose sight of that fact that it represents less than 30% of the projected $32 billion U.S. digital display market.
If everyone is moving to programmatic, why isn’t the projected spend closer to 100% by 2017?
When we look at the numbers closely, we realize that the bulk of the advertising dollars spent in digital display advertising come from large brand advertisers who are traditionally more interested in brand building than in direct response. These advertisers have avoided the programmatic markets due to issues related to quality, reliability, and the ability to deliver higher impact units.
In recent years many barriers related to programmatic quality have been addressed to some extent, and as a result we see more Tier 1 brands shifting their budgets to programmatic channels. But no one has really tackled the challenge of delivering high impact ads programmatically, in a brand-safe environment, with contextual relevancy and audience layers.
This is the next challenge for programmatic, and once this is fully addressed the percentage of programmatic buying will increase dramatically.
We founded Legolas Media (which later became Upfront Digital Media) with the vision of driving more brand dollars to programmatic channels, and this task continues as we join forces with Undertone. Recognizing the potential of integrating programmatic, auction-based buying with Undertone’s successful high impact units – all layered over quality, clean, and contextualized channels – both teams realized that we are on to something big. Undertone’s acquisition of Upfront Digital Media wasn’t only about unlocking programmatic Tier 1 inventory and high impact formats for brand advertisers – there are other benefits as well – but those are two key ways to help brands truly tap into the benefits that programmatic can offer, and we’re very excited to be a part of that process.
The starting pistol has been fired and the race for programmatic high impact has begun. We plan to stay the leaders of this race.