Advertisers will focus less on quantity and more on quality over the next five years. That shift in how they spend their marketing budgets will change the role programmatic – and media agencies – play in the marketing ecosystem.
“The days of buying volume are going to reach a point of obsolescence,” said Forrester principal analyst Shar VanBoskirk, the author of the US Digital Marketing Forecast 2016 to 2021, released this week.
Marketers will pull money out of media and put those dollars toward the customer experience: better store layouts, mobile apps that help customers and marketing technology that personalizes the experience for those shoppers. VanBoskirk cited a 2016 survey of more than 200 marketers. Eight-two percent planned to increase their budget for digital experiences that year, the highest percentage in the survey.
As ad budgets decline, media agencies will suffer. “Media-buying agencies are going to be on the decline,” VanBoskirk said. “I don’t see how they can sustain without significant reinvention.”
Changing media consumption habits will support this shift.
“The always-on nature of people’s media habits today means a frequency-based strategy is too much,” VanBoskirk said. “That made sense when you had an hour in the morning and an hour in the evening to reach me. But [high frequency] pushes past the point of relevance and makes me mad, not happy, about your brand.”
There could still be a role for programmatic, VanBoskirk said. Instead of brands moving unilaterally away from programmatic, they could undergo a “polarization.” Some brands will focus more on the quality of the customer experience, while others will use programmatic as an always-on part of their marketing plan.
Despite the shift toward customer experiences, digital marketing will still grow, Forrester predicted, estimating it will increase from $70 billion in 2016 to $118 billion in 2021. And it will go from commanding 36% of all advertising spend to 46% of all media spend, the firm reported.
The programmatic tech stack will also change as marketers seek to combat waste.
“You already see some dissatisfaction with the mistargeting of programmatically bought ads. It’s an imperfect science today, and there is limited accountability,” VanBoskirk said.
For example, marketers may show the right ad to the right person, but in completely the wrong context. Fixing these types of issues will require more human oversight.
Some programmatic tools will get swallowed up during this transformation, Forrester said.
“Over the next five years we are going to see standalone DSPs go away,” VanBoskirk predicted. They will still exist, but not on their own.
But the data management platform (DMP) will rise in importance. “Companies will start to develop their own advanced DMP that ties together customer insights, business insights and online behavioral data. That might work with a platform that includes a DSP capability to manage their buys.”
CMOs who continue to use programmatic will increasingly seek to add a human element to what they do, in order to override the misjudgments that technology can make.
“There is going to be a real value in those common sense and empathetic elements that humans can bring to create connections with other humans,” VanBoskirk said.
