A Brave New World: The Future Of Programmatic Advertising

In days gone by, targeted advertising was a costly and time-consuming venture. For a brand to reach its desired audience, it would first have to commit to extensive market research, significant media spend, and an endless stream of calls and emails between its media buying agency and media sellers (publishers) claiming to reach the wanted target audiences.

This has changed with the rise of programmatic advertising. Using automated technology to identify and purchase advertising opportunities in real time, programmatic has allowed brands to overcome many of the costs and headaches associated with traditional marketing strategies.

Programmatic is not simply a quick-fix solution, however. Increasingly, it is delivering substantive results for brands and their marketing teams. For one, programmatic advertising allows brands to spread their message across a multitude of different publishers, securing a wider and more diverse reach than traditional mediums such as television and newspapers. Meanwhile, as programmatic advertising becomes more sophisticated, it becomes better at understanding the interests and motivations of the consumer as an individual.

In this way, programmatic creates scope for brands to build lasting relationships with their target audiences, which in turn leads to a new normal – a time dreamt about for decades – where brands can actually maintain meaningful dialogues with their existing and potential consumers at scale.

With this in mind, it’s perhaps unsurprising that global programmatic spending has increased almost eightfold in the last five years, and that the UK’s programmatic spend has skyrocketed to an immense £3.77bn, with a further rise of 31% predicted for this year.

However, for all its virtues, programmatic has yet to reach its full potential. For this to happen, the industry will need to address some of the pressing issues which surround the process and how it operates.

The Spirit Of Innovation

In recent years, marketing strategies have increasingly focused on one-to-one dialogue. Where brands once targeted customers based on broad qualities such as age, gender or location, the digital revolution has allowed marketers to understand consumers on a much more personal level, especially when it comes to programmatic display. Programmatic has been at the heart of this development, using both explicitly stated attributes but also implicitly found signals and automated buying to reach the screens and inboxes of the exact customer outlined in a brand’s marketing plan.

But while it has generated significant opportunities for one-to-one engagement, programmatic has by no means mastered the art. Cross-device mapping, for example, is still very much a work in progress, with programmatic technology yet to accurately identify the same consumer across their various devices or over extended periods of time.

Given the rewards which can be reaped from a holistic engagement strategy, improving programmatic efficiency is a top priority for marketers and programmers. However, to be in with the best chance of reaching the target customer, programmatic tools need to know as much about that consumer as possible.

Through continued technological experimentation, brands will be able to achieve this goal. Already, beacon technology is being trialled in high street stores to capture data from customers’ smartphones and use it to target them with relevant, personalised messaging based on location. Meanwhile, brands are investing more and more in sophisticated data crunching tools, which analyse information shared over social media in order to determine the messaging most likely to resonate with target audiences, in real time.

Everybody Wins

While technological innovation continues to boost programmatic efficiency, human obstacles such as privacy concerns and a lag in how advertisers adapt to the new marketing tactics made possible by these new technologies continue to slow down innovation.

Sophisticated digital tracking tools have allowed marketers to collect vast amounts of information about customers and their online behaviours. To ensure that this does not become too invasive, more and more opt-in laws are being introduced which dictate that companies can only take so much data from customers without their expressed consent.

Protecting privacy is clearly important, but brands will need to do more to educate and convince their customers of the inherent benefits of sharing their personal information. Travel websites are a good example of a platform through which this can be achieved. When customers are asked if their personal data can be retained for marketing purposes, brands should highlight the fact that programmatic technology will help to ensure that they only receive deals that match their unique preferences and interests.

By merging digital innovation with effective communication in this way, programmatic is making great strides towards perfecting a one-on-one dialogue with customers. Further innovations in conversational interfaces and deep learning will drive this trend further.

Protecting The Brand

It would be impossible to discuss the ethics of programmatic advertising without mentioning brand safety. Recent controversies surrounding Google and YouTube’s use of automated advertising, which resulted in the likes of Mercedes-Benz and Waitrose showing marketing content in an unwanted context, have raised serious concerns about the maturity of this technology. This ambivalence has seen major brands and agencies temporarily pull their digital spending in some cases, citing fears over commercial integrity and brand security.

While these parties are right to be concerned, the decision to pull away from programmatic altogether is at best short-sighted. My opinion is that this immediate withdrawal is unwarranted, as vendors such as Google have acted quickly and are taking the right steps to implement the necessary improvements to prevent this from happening again. Although these issues have showcased some of this technology’s shortcomings, brands need to recognise that the opportunities provided by programmatic far outweigh the risk.

Programmers are already taking much-needed steps to instil transparency into programmatic advertising. Newly-developed algorithms are making it easier for brands to monitor where their adverts are being broadcast and to remove them if they appear in the wrong places. As this continues, firms will rely less on the unaccountable ‘black box advertisers’ who buy and sell slots without considering how a badly placed advert can affect a brand’s reputation. Over time, this quest for brand safety will see programmatic become more transparent, more reliable and, most importantly, more effective.