Critics of programmatic; listen up

Programmatic Media director Stephen Wright
By Programmatic Media director Stephen Wright | 2 November 2017
Stephen Wright.

See: Hyland bids to plug client holes left in wake of 'dirty' agencies

The advertising and media marketplace is changing at an unprecedented pace and programmatic is front and centre of this change.

Programmatic has been the catalyst for many of the market changes. Here’s a summary of eight factors of change that have flowed from the emergence of programmatic:

1. Automation – it takes the human decision making out of the day to day buy and allows data to make the selections. Gut feel and experience have been superseded by data and learnings.

2. Distrust of media agencies - at a time when procurement were squeezing media agencies, programmatic (through company owned trading desks) allowed agencies to discretely recover substantial margins behind the backs of their advertising clients. The breakdown of trust between agency and advertiser was inevitable when these ‘murky’ and ‘fraudulent’ practices were uncovered. This distrust was further heightened by the silence of the multinational agencies when these practices were exposed and their reluctance to put things right.

3. The new found importance of control - the new found desire by a growing pool of marketers to wrest back control.

4. Taking services ‘in-house’ - the move by advertisers to take programmatic ‘in house’ as a means of regaining control.

5. The rising profile of marketing within advertisers and their strengthened internal connection with customer service and sales as data provides a 360 degree view of customers and how to optimize value from them.

6. The ability to target customers individually and improve the return on marketing dollars. Mass personalization is only possible through automation and programmatic.

7. The rise of the management consultancies the swift emergence of well-funded, well trusted competitors in the large management consultancies as media and advertising transition from an external black art to an internal data science.

8. An awakening to the importance and value of first party data – and in line with this is the increasing concerns over external parties having access to this data.

Critics of programmatic, such as Ritson, seem confused by the transformation underway. They see programmatic as merely an area of digital and focus on sensationalised examples of poor execution. They talk of programmatic as an overhyped fad that could be gone tomorrow.

But programmatic is far more than that, it is a delivery mechanism increasing it’s share within digital, TV and now outdoor. It is a superior means of targeting enabled by customer data and insights. It is here to stay, there is no turning back the clock.

The world has changed and ‘walking backwards into the future’ is a fool's game.

For marketers it can seem daunting, but those who actively engage with these challenges to regain control will reap the rewards, often at the expense of competitors who sit back.

For some media agencies the trust has mostly gone.

They have been ‘found out’ by their clients and the relationship will never quite be the same again. This low point in the relationship coupled with the threat of the management consultancies means their future looks tough. Arbitrage seemed like a good idea at the time………..what could possibly go wrong?

For management consultancies there is mostly upside.

New players they have trust in spades, are cash rich, have a seat at the boardroom table and with extensive data expertise they are poised to push the agencies aside. As they muscle in on agency territory they are simply purchasing the pieces of the puzzle they don’t currently have. They’ve grabbed a massive share of the market in the US and their growth here in Australia is inevitable.

Across the industry for marketers and media agencies alike never has Darwin's quote been more appropriate:

‘It is not the strongest of the species that survive, nor the most intelligent. It is the one that is most adaptable to change’

By Stephen Wright, director at programmatic specialists Programmatic Media.

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