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Programmatic: not new, but strategic

The advertising industry saw big global brands embracing programmatic and enter the marketplace on 2014. IAB figures shows that programmatic advertising in the UK grew to GBP 1 billion, double the size of the previous year.

The Southeast Asia market is not far behind. Many of the countries in this region are huge potential markets for marketing technology companies because of the surge in internet using population. The main regions showing the highest rate of growth in programmatic are Philippines, Indonesia and Malaysia. Though these countries are immature when compared to European and the US markets, marketers in these countries have started embracing programmatic method of buying inventory.

In 2015, programmatic cannot be regarded as just a new method of advertising, but it is a strategy for all innovators and the landscape is improving daily. This strategy can be beneficial to both publishers and advertisers. For publishers, it guarantees sale of their premium and exclusive inventories at scale. For brands, they are getting the opportunity to buy relevant and targeted advertising spaces in a structured manner.

Though adoption of programmatic happened late in the Southeast Asian countries, the growth rate has outpaced the early adopters in the US markets. This means that, the challenge and opportunities in the programmatic have to be solved with combined efforts from all of them.

Let’s take a look at the challenges and opportunities, the programmatic industry as a whole will be looking at in 2015.

Challenges:
Programmatic treats many premium inventory as a commodity and publishers who own strong brands are not allowing the entire control to programmatic buying. Publishers are working towards an aim of creating control over the inventory and price because it’s one of the fastest-growing segments in the industry with more than 80 per cent of advertisers and 70 per cent of publishers using it.

Viewablity is another area of weakness, the ad tech innovators has to solve. Being a long-standing issue, non-viewable impression is a hurdle to achieve complete transparency. But as the programmatic push forward, the supply side will find ways to sell accountable impressions.

On the horizon now is…

1. Native and video ads on the rise
One of the advertising industry buzzword in 2014 was ‘Native’. Native has come a long way from just being a buzzword. Native is the way of displaying the brand communications where the ads adapt to the users’ interest and behavior.

In 2015, we will be able to see a high scale transition from pure native to Programmatic Native. With publishers working together with advertisers to incorporate effective native ad delivery system, countries like Indonesia can expect a major shift in the Programmatic Native space.

While smartphone share rising in the Southeast Asian markets, Video Programmatic is also accelerating sharply. Buyers are expecting to erase the line between Rich media ads and video ads in 2015. The play rates for video ads stand as high as 12 per cent that being the reason of high demand from brands.

2. Understanding data
The shift towards programmatic is driving many publishers as well as advertisers, to dig out meaning from the data generated by the consumer. The potential of data is tremendous and has the power to steer the way, the industry will move in 2015.

“Believe it or not, if you are just trying to match the demographic data on top of the cookies that you have, you will not be getting more than 50 per cent match rate in programmatic buying.” The Demand Side Platform (DSP), through which the programmatic buying takes place, has to have the capability to act as a multiplexer combining umpteen permutations and combinations of data points to arrive at that 100 per cent precision of audience.

Brands today, have an unprecedented amount of insights and business intelligence to extract and predict what is going to happen next with their target audience. But the hard truth is, many of the companies don’t see it.

3. Cross device tracking
In 2015, the cross-device targeting of user has become a necessity for every brand. Companies having cross device mapping capability will be seeing good growth in the coming years. Instead of cookie data, unique mapping id proprietary to these companies will be used for tracking users.

“Targeting and relevancy are the key advantages that programmatic bring to any marketer. Programmatic way of buying will become more than a choice in the coming years and the industry expects TV ads to follow the programmatic method very soon,” says Ankit Paul, India Sales Head, SilverPush.

As for the mobile programmatic, stats say that almost 75 per cent of the global smartphone population can be reached via real time bidding. So in 2015, we’ll be able to see mobile outpacing the programmatic growth of the desktop.

The write up is part of the DMA Annual Report ‘What’s Trending 2015‘.
To book your own hard copy of the Annual, write to marketing@digitalmarket.asia

Mudit Seth

Mudit is the co-founder of San Francisco based Cross Device Mapping company, SilverPush. SilverPush users their patented technology to map the devices used by the audience and thus learn their demographics and behavioral pattern. The company has run multiple campaigns in Indonesia, Malaysia, Singapore, India and the US. SilverPush is the only company that has the capability to map non-connected TV with user’s personal devices.
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