It is "inevitable" that all media in the future will be traded programmatically, real-time bidding will be the new standard and it is "inevitable that the vast majority of advertising will be digital – it is just a question of when". So said Julian Tol, founder and chief executive of Brandscreen, at a programmatic conference organised by Xpand Group last week.
Programmatic trading is the automated sale of individual internet users' 'eyeballs' to advertisers in real-time: a person visits a website, algorithms whir and a value is determined for that person's worth to an advertiser based on what is known about them from cookies and other data gathering tools. Via exchanges, agencies (and some advertisers with their own trading desks) bid for that user. The winning bidder gets to advertise to that user on the web page they have just opened.
Tol believes that "somewhere between 10% and 20%" of all online display advertising will be traded programmatically next year, up from 8% or 9% in 2012. That is from a market that only began in 2010. The reason for its rapid growth was the idea of valuing people in real-time. "Not in a way that was super-accurate, but accurate enough that [advertisers] were paying less per impression than their competitors."
For Tol, while Sydney is a "hotspot" for programmatic trading, it's "an area of the business that we all need to get better at. The hardcore challenge is getting to know the customer that we are bidding on better".
Andrew Reid, managing director of Komli ANZ, said that meant moving from big data to “high-definition data. And that means "applying research into real-time bidding". "We don't want to refer to big data any more. It's high-definition data. We need to discriminate between good data and bad data. It's about finding attributes and correlations that work."
Big data was “such a problem”, he said, because "we are clicking so much". "When you digest everything you end up with a very small signal you can act upon." He noted the relatively paucity of data in Australia. Citing research from Enliken which put the accuracy rate of the cookie pool in the US at around 50% (gender), he said that in Australia that was closer to 20%. Reid said what the industry needed to improve was "sensitivity and improve reach across sensitive data".
Low-definition data leads to under or over-bidding and poor optimisation, said Reid. "Publishers are pumping out low-definition data. We need to start matching it up [with parties] that can provide high-definition data. We need more research thinking about how we evaluate and measure impressions."
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