Programmatic Advertising: The State of the Industry
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This presentation looks at how the emergence of Programmatic advertising has enabled new revenue streams, but also complicated the landscape for digital publishers and advertisers by impacting user experience.
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Programmatic Advertising: The State of the Industry
- 1. Programmatic The State of the Industry 5/4/2016 Jory Des Jardins 1
- 2. Programmatic video will account for some 39% of the total amount spent on US video advertising this year Today $21.55 billion Estimated display programmatic spend in 2016, up 40% from 2015 Majority of programmatic ad spend in 2017: Mobile 24% of high-level marketers said they planned to buy TV programmatically in 2016, a growth of 11 percentage points over 2015. 5/4/2016 Jory Des Jardins 2eMarketer 2016 Programmatic Study, Exec Summary, 2015; http://www.emarketer.com/public_media/docs/Programmatic_Advertising_2015-Executive_Summary-
- 3. Programmatic is how we are thinking about media at scale 5/4/2016 Jory Des Jardins 3
- 4. The Good • Transparency • Value • Data • Audience over Traffic 5/4/2016 Jory Des Jardins 4
- 5. The Bad • Creepiness Factor • Ad fraud • Commoditization • Bad UX • Audience over Engagement 5/4/2016 Jory Des Jardins 5
- 6. Unintended Effects • Nothing but Native • Publishers as Agencies • Ad Blocking • Further mistrust of brands and publishers with ad- supported models. Image credit: AMC.com 5/4/2016 Jory Des Jardins 6
- 7. What Next? • BTYB Experiences – Enabling vs targeting • Ad-free business models • CPEs— Cost Per Engagement • Programmatic … – Influence – Content Distribution 5/4/2016 Jory Des Jardins 7
- 8. More on Programmatic Is the Digital Ad Industry in Free Fall? • Getting Real About the Effects of Ad Blockers https://www.linkedin.com/pulse/digital-ad-industry-free-fall-getting-real- effects-jory-des-jardins?trk=pulse-det-nav_art • The Short and Long-Term Fallout for Publishers https://www.linkedin.com/pulse/digital-ad-industry-free-fall-part-2-short- long-term-jory-des-jardins?trk=pulse_spock-articles • Addressing Mashable’s “Pivot” and the Digital Industry’s F-Word https://www.linkedin.com/pulse/digital-ad-industry-free-fall-part-3- addressing-f-word-des-jardins?trk=pulse_spock-articles Jory Des Jardins http://jorydesjardins.strikingly.com/ 5/4/2016 Jory Des Jardins 8
Editor's Notes
- eMarketer and RBC Capital Markets both show year over year increases in advertiser spending on programmatic channels. A study by eMarketer projected advertisers will spend $21.55 billion on programmatic display ads in 2016, a 40% jump from last year. Emarketer 2015 Programmatic Exec Summary: MOBILE PROGRAMMATIC ADVERTISING: GRABBING THE VAST MAJORITY OF US DISPLAY AD DOLLARS BY 2017 As consumers continue to move to their digital and media-consumption activities to mobile devices, programmatic advertising is following them there— its automation and data-driven capabilities make it a perfect fit. Spending on programmatically purchased mobile ads will overtake that of desktop this year by more than $3.23 billion—which represents more than 60% of all US programmatic ad spending. Programmatic also accounts for the majority of all the spending on mobile. One major reason for this is the massive amount of ads placed on Google, Facebook and Twitter, particularly through API-driven, programmatic direct means. As a result, US mobile programmatic direct spending will total $5.88 billion in 2015, accounting for nearly 65% of total US mobile programmatic display dollars. However, it is important to recognize that apart from the significant contributions from these three heavyweights, the vast remainder of mobile programmatic ad dollars—and activity—is occurring in the open markets, thanks to the relative immaturity of programmatic direct beyond these properties and private marketplaces.
- Programmatic is the mobile of our day—it’s here. It’s how we do business. No more “wait for it” warnings. Some of the largest advertisers are running exclusively via programmatic (P&G, Target brought in-house, Unilever active) No longer necessarily seen as low-yield, remnant inventory Disclosure: I don’t come at this with an agenda. I don’t work for ad tech, or even advocate for it. I consider myself a “Media Ecologist” Background of how I came into contact with Programmatic—2014. A premium ad business starting 2007 We sold based on overall content quality, placement of ads Basic targeting Integrated “remnant” in 2008/2009 Grumblings of needing to optimize ad stack 2011; built beginnings of one 2012 Idea of turning over significant amount of inventory to programmatic (seen as remnant) was terrifying. Idea of “smart” or “data-driven” impressions terrifying Inherited programmatic business in 2014; grew it 5X to 20% of our revenue, without significantly growing our traffic, but not exactly a convert. Too much truth? Impacted by such things as viewability and buying on performance Opened up a whole new competency: Yield management./finding money under the mattress Regardless of where the degree of programmatic vs premium ads will shake out, the “programmatic mindset is here” We will make decisions based on RT audience data, not just content Data-driven, less qualitative How will this play out in the industry?
- Transparency Built-in regulating mechanism. Bad impressions will not yield premium rates over time. Extracting more value for advertisers Providing more outcome data for advertisers Focus on Audience overTraffic
- Creepiness Factor Likelihood of ad fraud Commoditization of ads/no distinction across sites Bad user experience Focus on Audience over Engagement
- Unintended consequences for pubs: Ad blocking
- Several dynamics that are testing programmatic --Less capital investment in the category—fewer players and consolidation—maybe a good thing in terms of less ad fraud --Growth of new startups that are not display reliant. High-touch approaches here—branded content, custom native --Engagement metrics will prevail