Programmatic advertising has not only evolved year-on-year to make a clear place for itself in the future of the business but has also opened up new opportunities for industry stakeholders to benefit from. The year 2014 would see clear trends define programmatic and what it will achieve for the industry.
#1. Programmatic display will continue to disrupt
2014 will see the continued growth in adoption of programmatic by advertisers in the SEA region in general and Singapore/Indonesia in particular. Marketers will start taking notice of the key benefits of an intelligent technology powered display campaign – never seen before click through rates, ROI as measured by post click sales and accountability which together makes display deliver results that are as good as, if not better than search advertising.
#2. E-commerce players will double down on RTB (real time bidding)
Pure online players will continue to invest heavily in programmatic channels. Savvy advertisers will switch to more advanced strategies including optimising to customer lifetime value and will consider the channel not merely as a marketing investment but as a cost of sale. The early movers will continue to benefit from the relative softness of the auction especially on the Facebook Exchange (FBX) and mobile inventory.
#3. Mobile retargeting to the fore
The year 2014 will see the promise of mobile RTB come to life. Marketers know and understand the power of dynamically personalised messaging – in 2014 advertisers will expect the same from their mobile campaigns. Many markets in the SEA region are ‘mobile first’ with some of the larger e-commerce players seeing up to half of their visits (and up to 20 per cent of transactions) coming from a mobile device. Mobile retargeting will move from being the shiny new toy to the must have strategy in the overall marketing mix.
#4. Cross platform will be the only way
We will see the realisation of the power of programmatic to drive performance at scale across multiple screens in 2014. In the near future we expect every campaign to be device and screen agnostic with performance being optimised at a user level across multiple devices. HTML5 gives marketers the incredible opportunity to reach the same consumer who browsed on a mobile device with personalised display ads on his desktop computer, where he may be more likely to convert. The result is a seamless user experience and consistent pricing and messaging strategy that brings order to the wild west of multi-device marketing.
#5. Consolidation of inventory
I expect further consolidation of inventory into RTB channels in 2014. Already we are seeing local SSPs (sell side platforms) across Southeast Asia bringing a ton of liquidity into the markets. Furthermore, premium publishers will begin to realise that programmatic and direct sales can be complementary and together contribute to a higher publisher yield curve. On the demand side, I strongly believe that access to inventory will no longer be a differentiator – most markets will have close to 100% reach via RTB which makes the more relevant question not so much about what inventory do you have access to but what is that you do with the inventory? i.e. technology becomes the differentiator.
#6. Marketers will bridge the knowledge gap
As the industry comes to grip with the innovation in display advertising marketers will begin to ask the challenging questions – such as how much of my marketing dollars is going to towards media costs v/s pay for the vendors margin? Savvy advertisers will demand transparency into traded auction prices, expect a universal frequency cap across platforms, de-tag user on conversion, visibility into performance by channel (Display/Facebook/Mobile)
#7. From Big Data to Actionable Data
If selfie was the word of the year 2013, then Big Data would win the similar honour for the ad tech industry. In 2014 more advertisers will begin to unlock the real value in their CRM (customer relationship management) and data assets and realise that the “big opportunity” of big data is in using it to drive actionable insights and power intelligent advertising. The travel and retail industry are best placed to leverage this.
#8. People will matter – more than ever
Contrary to what words like ‘programmatic’ and “automated trading’ suggest, people will matter more than ever in this business. A machine might be able to analyse a peta byte of data in an instant or consider thousand bid variations for an ad unit but strategy as driven by humans has never been more important. Campaign strategy, differential CPAs (cost per acquisition), split testing – the pace of change and the unprecedented levels of innovation all mean that it’s a great time to work in Ad Technology regardless of whether it’s on the demand, supply or advertiser side.
The author, Rohit Kumar, is the Managing Director of Sociomantic Labs’ Southeast Asia operation