'Programmatic': Old Word, New Meaning

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neerajData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Neeraj Kochhar, managing director for programmatic at MAGNA GLOBAL.

Earlier this month, the IAB, in partnership with the Winterbury Group, released a white paper titled “Programmatic Everywhere? Data, Technology and the Future of Audience Engagement.” It’s a comprehensive 36-page paper “encompassing feedback from more than 260 executive-level marketers, technologists and media industry leaders.”

It’s worth reading in its entirety if you still have an appetite for anything more than 140 characters. At the very minimum, I suggest close examination of the following excerpt:

“Often associated with the practice of auction-based media buying (and referenced interchangeably with these “real-time bidding” tools and tactics), the real practice of “programmatic” is far more complex – and potentially far more transformative – than its most well-known use case would suggest.”

Programmatic continues to suggest cheap rates, remnant inventory and tonnage for a large majority of the industry. This is an oversimplified and shallow view.

The demand side is wildly enthusiastic about programmatic. Armed with data and technology, agencies and some advertisers are aggressively investing in talent and technology to deliver on the promise of programmatic – i.e. targeted reach at scale in spite of ever growing media fragmentation.

While several media owners have joined the cause, others on the supply side remain fearful. The specter of irreversible rate decimation and devaluation looms large. “Race to the bottom” is the current popular sell-side tagline for programmatic.

Clearly, programmatic has a brand problem.

So, the excerpt from the IAB paper is encouraging in that it advances a more evolved and mature view of programmatic.

The industry – media, data and technology players – should come together to drive sensible, balanced and mutually beneficial discussions to ensure that we unlock the full potential of programmatic. Otherwise, meaningful transformation will prove elusive and programmatic will remain associated with a certain limited type and class of inventory.

In fact, collective failure to make progress across the media industry could end up placing more power and control with a few select, already dominant media/technology players.

Rapid developments in data processing, audience data management, media procurement and attribution modeling continue to reshape the underlying marketing infrastructure framework. New agile tools and analytics capabilities let marketers surface answers to complex contribution questions (the Wanamaker quandary) in nearly real time.

In this environment, value will accrue to media partners who funnel adequate indicators through the marketing system and demonstrate measurable results for clients. It’s hardly a one-sided apocalyptic tale of distressed CPMs; the price paid for media will always be commensurate with the value obtained and, effectively, command a certain pay-for-performance monetary value in the marketplace. This is shaping up to be the new normal for media investment management. Is programmatic the connective tissue?

“What’s in a name?” asked Shakespeare. Evidently, a fair bit when it comes to programmatic. The good news is that it’s still early days and we, collectively, have the unique opportunity to breathe life into this thing called programmatic.

Follow Neeraj Kochhar (@neeraj_kochhar) and AdExchanger (@adexchanger) on Twitter.

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