Programmatic: It’s More Than Technology

nickillobreData-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 Nick Illobre, director of enterprise media solutions at Merkle.

As we think about the evolution of programmatic media buying, we can all reminisce about having to explain what “programmatic” was to our colleagues in the industry.

For those not yet familiar with the world of demand-side platforms, supply-side platforms, automated guaranteed or the hundreds of potential vendors that needed the LUMAscape to explain what their company did, it was certainly a brave new world.

I was deeply pleased when Bob Lord, then president of AOL, explained programmatic this way in 2013: “It’s automating the mundane activities of matching audiences to inventory.” However, this explanation leans on the side of programmatic being purely about technology, not the application of the technology to advertising.

While this was a bold statement at the time, it did not address the difference between “pulling the levers” and figuring out how to build something new and unique using all these new platforms and technologies. Therefore, all definitions of programmatic must include not only the technology layer, but the service and application of these tools to create solutions.

Why do we need to include this solution layer to the definition? Think of your go-to Excel expert who taught you all of its tricks. You learned that mastery of Excel is more than keyboard shortcuts to get work done faster; it is also knowing which formula to use, and when, why and how to construct models with dependencies, variables and logic. This is the service layer that is inherent to the use of any technology – it simply cannot exist in a vacuum.

This concept is exceptionally important for advertisers, publishers and agencies because organizational maturity is tied to both execution through technology and the development of solutions to solve business problems. We must all evolve our thinking if we hope to keep up with the rapidly changing technology that is powering the industry.

Many brands in this industry are built upon the backbone of real-time bidding alone. These organizations are confronted with a number of trends that challenge their progress, such as the “race to the bottom” in CPMs; digital programs that use outdated attribution methodologies; and a movement toward making premium inventory available to all advertisers.

While publishers have ramped up their sales teams to break down barriers between traditional and programmatic media, marketers and agencies are faced with the new frontier, one in which programmatic is just a part of how we all work and do business.

We are already starting to see the evolution occur in the holding company world: Publicis, for example, is working toward making programmatic second nature to all media buying and planning. Meanwhile, WPP is rolling out programmatic education to its teams.

While these educational efforts are directionally correct, advertisers must ask whether they will lead to wholesale transformation toward a technology-driven, solution-focused environment – or if the result will be an understanding of programmatic that is out of date even before it’s delivered.

This is a risk for advertisers and agencies because programmatic is more than a litany of acronyms and platform logins. We must learn how to run and use our new tool sets as part of all media planning and buying. The fundamentals of marketing are more important now than ever before: identifying and reaching audiences, proving the value that digital brings and devising great creative that is relevant and impactful to consumers, just to name a few.

As CMOs grapple with how to reach their desired audiences with fragmented media consumption, the role of the programmatic solution architect – the person who figures out how to apply the technology to reach a business objective – will grow to become a central aspect of strategy for all players.

In an industry that is in its mid-20s, digital advertising as a whole is going through its quarter-life crisis. Our programmatic coming-of-age phase is coming to an end. We are confronted with a new set of challenges on our path to achieving the vision of “right message, right person, right price and right experience.”

Whether advertisers and publishers decide to keep the capability in-house or look outside their organizations for expertise, it’s time to accept that all programmatic frameworks must look beyond simple execution. We must seek the solution architects that will blend together their understanding of audience, data, media and technology to create the next generation of programs that add value to advertisers, publishers and consumers.

Follow Merkle (@MerkleCRM) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. These are great thoughts, Nick. The maxim of “too many tools, not enough carpenters” is not only appropriate to ad tech but a systemic reality. Becoming expert in a given tool (DSPs in this instance) is relatively achievable – if looking at it solely in a technical proficiency sense. But what turns a top athlete into an Olympian is the application of thoughtfulness and careful examination of any non-intuitive extensibility of the given tool well in advance/upstream of deployment. The operation of the tool/DSP needs to be an expression of how the operator thinks. That is where passion meets precision and real operating innovation arises, leading, naturally, to an improvement in business processes and returns.