You’ve heard it at work, you’ve probably even heard it at the coffee house you collect your breakfast from each morning, with those youngsters seating across from you. Sure you have heard about it, sure you feel it is going to be important (we predict that it will be one of the top trends to emerge in 2014), but do you know what it really is? Programmatic advertising has been a hot topic for the last few months. People throw around abbreviations like RTB (Real Time Bidding), DSP (Demand Side Platform) and BTA (Behavioral Targeted Advertising) like it is something that has been around for years.
It has to do with media selling and buying in real time, however, for most people it is rather confusing. So, what is programmatic?
Definition: Programmatic advertising is an intent-based, real-time buying of advertising inventory. It’s an automatically triggered event, deployed according to a set of rules applied by software and algorithms.
If you are looking for a “Programmatic for Dummies” guide, AdWeek has done an excellent job in identifying what it really is, with interviews of some of the most influential marketers in mobile, and beyond.
How does Programmatic affect the mobile industry and what does it mean for media buyers and Ad Exchanges?
Research by Magna Global projected that programmatic Ad spending will reach past $32.6B by 2017, with a US spending reaching $16.9B. More specifically mobile RTB, including the social giants, will reach past $1 billion by the same year.
Ad exchanges try to perfect their RTB extension of their platforms and focus less on leveraging and expanding their publishing side. Advertisers are looking for that one platform that will enable them to evaluate and bid on each individual impression. The truth is that now-a-days the better your RTB platform, the more publishers and agencies you will attract.
Therefore, to effectively compete in this industry you really should focus on expanding your platform to further develop your programmatic buying capabilities. Every mobile advertising exchange that respects itself is in this business. Earlier last year, Millennial Media, in partnership with App Nexus, launched what they claim to be the largest advertising exchange driven by real-time data collection mechanisms (report). Such move brought them in direct competition with Google.
We have now reached an era where mobile Ad display units are bought on the fly in real time and you need to be fast, efficient and precise in order to reach your desired audience. Mobile conversions rely on the accurate reach of a blink-and-you-miss-it Ad on a users device, and advertisers rely on a platform that can execute precisely that.
Programmatic advertising in mobile is becoming a mainstream, but yet premium, inventory that will attract more publishers and therefore advertisers. During this year, more and more publishers will provide inventory on their destinations for platforms that support programmatic buying through private and premium exchanges.
Programmatic video advertising in mobile is picking up
On top of the mobile media display exchanges and agencies, programmatic advertising and RTB see a great application on video advertising (mobile video in particular). Video companies now update their platforms and products to incorporate programmatic buying technology that will help them take the big leap. Online Video Insider predicts that during 2014 almost 60% of all digital video ads will be bought programmatically.
More premium publishers will partner with video Ad platforms that host programmatic buying methods, aimed to help them automate their selling process and target premium advertisers. Europe is ahead of its game with UK leading the race and is expected to reach over 24% in programmatic video Ad spending during 2014.
Programmatic buying in the micro-location advertising business
However, and due to the fast paced industry we live in, it’s not just a matter of who is implementing programmatic buying, but rather who is doing it better at this time. Already, more than half of the US online and mobile Ad buys happen this way. Consider this; if you are a Mobile Ad Exchange not offering RTB, you probably lose customers for competitive platforms as you read. Soon advertisers and media agencies will require location specific, customized data to bid on in an effort to dissolve customer fragmentation and stay on top of consumer personalization.
Companies such as BlisMedia, Placecast, Placeable and Warp.ly offer micro location targeted advertising solutions enabling advertisers to target specific audiences based on their location, preferences, user groups, content and interests, while offering programmatic buying technology to both their publishers and advertisers.
All this only makes it more blurry for the mobile advertising teams, and 2014 will be a decisive year for who will emerge from the competition to take a clear lead in the mobile advertising ecosystem.
Categories: Mobile Advertising