Programmatic – where to pay the most attention right now?
Programmatic ad buying has changed the face of online advertising. “Programmatic” ad buying typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically. All markets are rapidly adopting programmatic as a way of trading media easier, faster and better – programmatic trading in the Nordics in 2016 was in Finland 26%, Norway 37%, Sweden 30% and Denmark 62% (estimates by IAB) and shares has been increasing continuously during 2017.
There are lot of talk about programmatic and here we share, what we think are the most important trends to pay attention to right now:
Brand safety, fraud and transparency – In 2017 brand safety and fraud increased as a barrier to investment for all stakeholders. Brand safety and invalid traffic are key to determining the quality of the digital advertising environment. Viewability is now less of a barrier, as more viewable ad formats are being made available and awareness has increased. 40% of advertisers also cite transparency of fees as a key barrier to programmatic investment. If you haven’t yet rolled out ads.txt, it might be time to hop on board. The Interactive Advertising Bureau (IAB) Tech Lab introduced ads.txt as a tool that can help ad buyers avoid illegitimate sellers who arbitrage inventory and spoof domains.
Data – The majority of all stakeholders are currently leveraging first party data and this has increased from 2016. The number of advertisers using third party data has increased significantly too, demonstrating signs of mature data strategies. Agencies continue to use a mix of data sources. In Europe more than half of advertisers and publishers and three quarters of agencies are using a Data Management Platform (DMP) to source their data.
Header bidding, Pre- / post-bid – Traditionally, publishers have managed their ad prioritisation via their ad server. Through this method – often known as a waterfall – when the web page is loading and the ad space is up for sale, the ad server plugs into advertising partners to sell the impression. Header bidding is when publishers place a piece of code into their page headers to allow preferred demand sources to submit bids at the same time an ad server is considering the ads that were bought directly. Prebid.js is a free open source library and community that helps publishers implement Header Bidding on their websites & apps. In post-bid, the competition among your mediated demand sources compete after your ad server has chosen the winning line item (vs. in header bidding, demand sources compete before your ad server has seen the impression).
Video – Programmatic is most likely to be used for display and mobile campaigns. Video is not far behind, however, as more than 75% of advertisers and agencies are using programmatic for trading video campaigns, programmatic video buying will rise. Programmatic video advertising investments increased by 155% in 2016. Unsurprisingly then, 49% of advertisers cite being able to engage with their audiences via programmatic video as a key driver to further investment.
Metrics – In 2016, the click was the most popular metric used for programmatic campaigns but now stakeholders have moved towards brand metrics such as brand awareness and purchase intent as well as quality metrics such as targeting accuracy, brand safety and viewability.
Investment in programmatic set to continue to increase
In all of Europe, half of the European display ad revenue is now traded programmatically and the programmatic advertising market has reached a market value of more than €8bn. Programmatic is now a key imperative for advertisers, agencies and publishers alike. Similar to 2016 programmatic trading revenues and investments are set to increase, regardless of market or stakeholder type. There is little difference in optimism regarding the expected increase of programmatic trading investments and revenues; approximately 90% of all stakeholders cite an increase in the next 12 months.
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Source: Data from Local IABs & Danske Medier, IAB Europe Report: Attitudes to Programmatic Advertising 2017