Results tagged “programmatic” from IABlog
- Programmatic is more than RTB. There is a lot of confusion over the term programmatic, which many people mistakenly believe is only real-time bidding (RTB) or used only for remnant inventory. Ultimately programmatic is the process of buying and selling media in an automated fashion. This includes four main types of transactions - open auctions, invitation-only/private auctions, unreserved fixed rate/preferred deals, and automated guaranteed/programmatic guaranteed deals. Every time someone says the word “programmatic” make sure you ask what exactly they mean. Watch this Digital Simplified video that explains how one part of programmatic, RTB, works step by step.
- Lots of challenges still exist to enable programmatic to work. Concerns that were addressed throughout the event included transparency, fraud, and trust; limited understanding and knowledge; confusion over terminology; moving from direct response to branding dollars, moving from mostly standard banners to native, video, rising stars, and audio ad formats; internal organizational challenges for brands and publishers; and delivering different creative through programmatic.
- Programmatic is big and getting bigger. The programmatic market (including auction, and direct deals) is expected to top $10B in 2014 and grow to $20B by 2016. For now, RTB remains the dominant part of programmatic spending (92% in 2014), but is expected to fall to under 60% of total programmatic spend by 2016 as programmatic direct increases. Within RTB, open auctions account for 88% of total RTB spend, though this is changing with private marketplaces growing significantly faster. While display is still dominant for now, mobile and video programmatic are growing fast.
- Fraud and trust are big issues, but are being tackled by the industry. Bots and fraud have become a big issue mainly due to the large sums of money involved. The IAB and the industry are building a trust stack to tackle fraud, malware, piracy, and transparency and include these in a joint cross-industry accountability program) building on the existing Quality Assurance Guidelines. Advertisers and buyers should make sure they know their supply sources, choose their vendors carefully, and always remember “If it’s too good to be true, it probably is!” Publishers need to ensure they are coordinating between sales, marketing, operations, and analytics to identify any strange traffic patterns and remember if they are doing audience extension they need to apply the same controls as buyers should.
- Publishers can hit a home run with programmatic video. The concern that programmatic has been perceived as a “race to the bottom” for rates and yield has not been the case in video due to restricted supply. Publishers can use programmatic to fund the creation of quality video content particularly by helping to monetize traffic spikes. Ultimately efficiency doesn’t have to mean lower CPMs; it can also mean more effective engagement.
- Measurement matters even more in a programmatic world. Brand marketers are looking for transparency, inventory quality, and technology simplicity. Buyers should ensure they are reaching the right audience, use a consistent, comparable metric to plan, buy, and sell audiences, use brand data to ensure advertising resonates, and ultimately ensure that the campaign drives the desired action.
- Attribution is essential to effective programmatic spend. Last touch attribution is outdated and is like giving all the credit in a relay race to the last runner. Attribution models should incorporate the “first site visit” separating the funnel into prospecting and retargeting, and set the right incentives to each part.
- Brands in automotive are leveraging programmatic. Leading brands are looking beyond the simple retargeting of ads and embracing programmatic across the consumer path to purchase from unaware to loyal purchasers. The agency automation “stack” includes four layers - unified data platform, open access to media inventory, single metrics regime, and dynamic ad creation/production/serving platform. Brands are finally learning from programmatic media to employ new tactics in automated creative—not creating by machines, but optimizing ad variables based on real-time, impression level data.
- Publishers need to re-org to capture the value of programmatic. Publishers are adopting programmatic as a core part of their monetization strategy. However, this can pose internal challenges. The top five ways to build a successful programmatic publisher organization were the following: align incentives and compensation; educate direct sellers and have them attend Programmatic 101 training; programmatic team to focus on supporting direct sales (agencies) and covering programmatic buying entities (DSPs, trading desks, retargeters); establish a programmatic rate card; and have internal and external quarterly budget reviews.
- Creativity and programmatic are not enemies. Every ad should be dynamic and leverage the same audience signals used in programmatic media buying to make the creative relevant. This can be done by infusing first or third-party data on demographics, location, and previous website behavior to alter the headline call to action, image, or assets of the ad unit to ensure the message resonates with the user. Doing this can double yield on interaction rates and increase engagement by 50%.
- Transparency is key, but as an industry we need to define - what does it mean to be truly transparent in the programmatic space?
- Now that programmatic technologies are in place, let’s find ways to implement more engaging and interactive creative in real time
- Now that people are getting more comfortable with letting technology do the heavy lifting, we can begin to take advantage of programmatic efficiencies
Since releasing the IAB PwC Internet Advertising Revenue Report for the first half of 2013 on October 9, 2013, the IAB has seen misconceptions about the report, mostly centered on programmatic. Speculation about why the report does not cover programmatic revenue came from a highly esteemed and particularly smart writer and editor. We’ve seen guesstimates of programmatic’s contribution to overall interactive ad revenue based on the IAB numbers.
Why we do not report programmatic buying revenue
There are two primary reasons for not breaking out programmatic revenue in the IAB PwC Internet Advertising Revenue Report:
- The industry has yet to reach a consensus on how to define programmatic
buying, spend and selling. If we cannot define it, how can we collect
credible revenue information? Does anyone really expect that a revenue
bucket or a spend bucket that has not yet been clearly defined is being
accurately tracked by any of the entities we would have to get the information
- Programmatic is a FORM of selling. It is not a format or medium of distribution. Currently and throughout its history, the IAB/PWC report has explored formats and mediums; it’s never looked at selling mechanisms.
Guesstimates of programmatic revenue based on the IAB PwC report are not sound
Based on how the revenue data are collected and how they are reported, it is simply not possible to estimate programmatic ‘s contribution to growth in overall revenue. This would be true even if we had an agreed upon definition of programmatic to use in order to make inferences. That is why we do not engage in speculation about how much programmatic contributes to spend in the official report.
It is PwC that independently collects the data and authors the report on behalf of the industry and the IAB. It is PwC that is charged with maintaining the quality of the data collection and reporting. And it is both PwC and IAB that consistently opt to be rigorous on methods and in reporting.
It would be irresponsible to include guesstimates in the official, published revenue report. It would also be inadequate to release the report without providing context. That is precisely why we host a well- attended webinar with our members and members of the press together to hear the revenue numbers from the report along with context from PwC, the IAB and a guest speaker. This occurs twice a year to coincide with the releases of the half yearly and the annual reports. Contrary to what we’ve heard lately, programmatic has been part of the discussion. The materials are posted to the IAB site and readily available to all.
IAB activity aimed at understanding programmatic buying: what it is and how it impacts the broader marketplace
Revenue reporting aside, the IAB recognizes that programmatic buying and selling are an important part of our ever evolving marketplace. In order to serve our members and the larger ecosystem, it is our responsibility to convene thought leaders, experts and practitioners to clarify and illuminate how market forces are operating and changing.
We have the following key efforts underway in the programmatic arena.
In July, we convened the IAB Publishers Programmatic Task Force, a group of 40 publishers working to identify the issues surrounding programmatic selling and understand which ones can have actionable solutions through consensus.
In September 2013 we released a programmatic terminology piece that explains the four dominant methods of selling programmatically entitled, Digital Simplified: Programmatic and Automation - The Publishers’ Perspective.
On the technical side, the Digital Advertising Automation Task Force is working to standardize, implement, & support adoption of common datasets for IOs, media plans & invoices. The Open RTB & Exchanges Working Group supports the development of OpenRTB specifications.
The IAB regularly holds Town Hall meetings where different ecosystem players convene to discuss and debate some of the bigger challenges we all face. These town halls provide inspiration for many solutions that ultimately make our businesses better. Coming soon is a Town Hall on programmatic selling and buying.
Will the IAB add revenue reporting capabilities?
Yes. We will be trying to supplement revenue reporting so that we capture dynamics and transactional forms that are outside of the purview of the IAB PwC report. We seek the right way to measure programmatic spend and the support from our members to provide this kind of research.
About the Author
Sherrill Mane is SVP, Research, Analytics and Measurement, at the IAB.
IAB releases Publisher’s perspectives on programmatic as first part in educational series
Programmatic buying and selling of advertising, real-time bidding, and marketing automation is changing the way we transact digital media. Though numbers are very sketchy, by some accounts over 20% of all digital advertising is sold “programmatically” - and it’s growing rapidly.
Yet programmatic competes with Native advertising for the title of “Buzzword of 2013”. And the hyperbole couldn’t be more extreme. Concerns are rampant. Sales people are worried about becoming obsolete, losing their jobs to machines, and declining yields. Some buyers of digital media are worried that only crappy inventory is available programmatically. Aside from perhaps the ad tech community, there’s a great deal of smiling and nodding going on when people talk about the importance of programmatic, and not a lot of understanding. Ad agencies are worried that automation will mean standardization and less of a role for creativity and creatives. On the other side, many see new technological innovation as the source of great potential value - creating significant efficiencies, new markets, and continuing to drive advertising dollars to digital.
There is significant confusion in the marketplace around the meaning of terms like “programmatic”, “RTB”, “programmatic direct”, “programmatic premium”, and other verbiage, often being used interchangeably. New technologies are emerging which are creating significant value, but there is also a lack of clear technical standards to ensure interoperability across different platforms. Buyers and sellers are concerned with the limited transparency and number of vendors involved in the programmatic transaction. And programmatic raises internal, organizational challenges for brands and agencies, and particularly for publishers with their existing direct sales teams and incentives.
Agencies and their clients have a lot to lose if programmatic isn’t implemented coherently: a set of technologies that aim to create market efficiencies could, instead, create a fragmented, illiquid marketplace if each media agency insists on creating its own proprietary marketplace with its own standards and its own technologies.
In the spirit of creating value for the entire marketplace and driving advertising dollars to digital, the IAB is working to tackle many of these challenges. Today it is releasing Digital Simplified: Programmatic and Automation - The Publishers’ Perspective, the first in a new IAB educational series that offers easy-to-understand documents for the industry. The piece aims to provide clarity, from the publishers’ perspective, on the different “programmatic” transaction types. It outlines the four main ways of buying and selling “programmatically” and provides a clear framework for distinguishing between them. It also highlights other factors commonly associated with each of these types of “programmatic” selling.
This is the first output of a newly created IAB Programmatic Publishers Task Force, chaired by Alanna Gombert, Senior Director Programmatic and Trading at Condé Nast and formerly of Ad Meld and Google. The new Task Force is aimed at providing premium publishers a forum to come together to work on issues related to the programmatic agenda and how it impacts them. Its goal is to help publishers establish market clarity and education around the programmatic ecosystem - both internally and externally. Barely a month after its launch there are now over 30 premium publishers participating in this initiative and the list is growing. In addition to working on clarity around definitions and terminology, the group is also working on issues around transparency across the value chain and sales force organizational issues.
The Programmatic Publishers Task Force is a key part of the overall IAB programmatic agenda. This agenda focuses on firstly identifying and addressing the key business issues in the programmatic landscape, and secondly working on technical standards and implementation of standards to address these issues. On the business side, in addition to its work with publishers, the IAB, in conjunction with The Winterberry Group, is conducting a thought-leadership research study to provide an effective roadmap to “programmatic” capabilities based on surveys and interviews with its members, to be released by the end of 2013. It is also working on mobile specific programmatic issues. On the technical side, it is working on both digital automation implementation and open RTB standards.
For more information on the IAB’s work on programmatic marketing please go to iab.net/programmatic or contact Carl Kalapesi (below).
About the Author
Carl Kalapesi is the Director, Industry Initiatives at the Interactive Advertising Bureau (IAB) focusing on Programmatic, Quality Assurance Guidelines (QAG) and brand safety, performance marketing, networks & exchanges and multicultural. He can be reached on Twitter @carlkalapesi or via email at at [email protected].