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Programmatic: Hard at Work or Hard Work?
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Programmatic: Hard at Work or Hard Work?

By Jessica Hogue, SVP, Client Service, Nielsen

If I could pick one buzzword of 2014, it would be “programmatic.” Not only was it a theme of the recent ARF Audience Measurement conference, whole conferences have been spawned solely to focus on programmatic. And, programmatic was the topic of the panel I moderated at Nielsen’s recent Consumer 360 conference in San Antonio.

For the purpose of our discussion, we defined programmatic as:

  • Marketing using real-time systems, rules and algorithms to automate the delivery of data-driven, audience-specific, relevant experiences to consumers as they interact with a brand’s many touch points. The experiences include focused offers, messages, content or ads across paid, owned and earned channels.
  • Using technology to automate processes and the use of math to improve results.

Tod Sacerdoti, founder and CEO of BrightRoll, noted that programmatic creates data and economic efficiencies, helping the industry leverage big, global data sets and better optimize media spend to increase savings, respectively. Lindsay Fordham, product marketing director from Rocket Fuel, pointed out that programmatic does more than cut costs—it also creates real value.

While nearly everyone is aware of the specter of programmatic at this point, and generally seem to agree with this definition, questions still abound: Is it transparent? Does this undermine our relationships? How will this impact pricing? Is high-quality inventory available through programmatic?

But is it Transparent?

According to our panelists, programmatic offers a layer of control that is really important, and information around programmatic activities is available. As Donnie Williams, Chief Digital Officer, Horizon Media, said, “It’s transparent or it’s not non-transparent.” But, like any buying and selling model, it requires third-party validation that ensures that buyers are getting what they paid for and reaching the audiences they intended to reach.

Does programmatic undermine our relationships?

The jury is still out on how programmatic will affect relationships. There is clear concern that programmatic could remove the human touch from the equation and upset the current dynamic. But, done right, there’s the opportunity to combine the benefits of automation with a high-touch approach that ensures the continuation of a trust-focused relationship.

In addition, it’s unclear who will own the programmatic buying process—whether the agency, an advertiser or an ad platform. How that nets out will have clear implications for publishers as well as other players across the ecosystem.

How will Programmatic Affect Pricing?

The debate over this topic was highly engaging as factors like viewability and waste in digital were discussed. New measurement capabilities have shined a spotlight on impressions that were never in view or served to the wrong audience. Programmatic is part of that conversation, as it’s enabled by and likewise validated by these same metrics. As Sacerdoti said, “the critical component or element in terms of thinking through how we leverage programmatic is programming impressions.”

Is high-quality inventory available through programmatic?

The quick answer is yes, though the fact is that many publishers still reserve their best inventory for Upfronts or other direct sales. Though those barriers might be starting to break down as buyers and sellers alike are more comfortable transacting on premium inventory through programmatic processes. Sacerdoti maintained that that is “a relic of the beginning of a category and the maturity of a category.” Though, this is specific to online. Mobile is the next great frontier for programmatic as new measurement capabilities—Nielsen Online Campaign Ratings, for instance—provide advertisers with proof of who they are (or aren’t) reaching on smartphones and tablets.

And, per Fordham, “there is a myth that supply is endless and that all the supply we see on the open exchange is quality. As we get more sophisticated at weeding out the good impression opportunities from the bad, those things will come together.”

The big takeaway from the panel, and from the many discussions we’ve seen and heard around the industry, is that programmatic is here, it’s growing—we’re not proving efficacy anymore. We’ve beyond that into execution and determining how to best leverage programmatic to make us smarter, faster and better as an industry. As Williams noted, programmatic has the potential to help us unlock crucial data sets, like cross-platform insights, that hold real upside for our evolving industry.