Unpacking Programmatic: How Automation Impacts The Digital Advertising Industry

Data-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 Dennis Buchheim, senior vice president of data and ad effectiveness at the Interactive Advertising Bureau (IAB) and general manager of the IAB Data Center of Excellence.

Soon, truckers may be out of a job. Why? Automation. Factory work continues to dwindle, again, because of automation. Artificial intelligence, the driver du jour of high valuations in tech, is all about – you guessed it – enhancing automation.

Already this year, the Harvard Business Review has published more than a dozen articles related to the topic. Automation is a global force across all industries, and it’s being wrestled with at the highest and lowest echelons of organizations and society in general.

But we in advertising don’t talk about automation. Instead, we use the word programmatic, an increasingly ambiguous industry term that can’t hold the weight of the conversations that need to be had. Now don’t get me wrong: Jargon can be OK. Every industry has it. But any language we choose to use must enable rather than disable communication. And in this case, it’s beginning to hurt.

A semantic and contextual shift is necessary. To achieve new levels of efficiency and effectiveness, digital advertising leaders need a new lens through which to perceive and discuss the massive changes going on in their companies because of, yes, automation.

The term programmatic originated years ago to describe elements of digital advertising campaigns performed by software. The word was generally used to distinguish transactions executed by machines, especially via real-time bidding, from those negotiated and executed by flesh-and-blood salespeople and media buyers. At first, the word was apt. But times have changed.

The rapid evolution and extensive adoption of data-fueled technology has pushed us into a post-programmatic world. Today, partially or wholly machine-driven processes are woven throughout the entire digital advertising supply chain. We need to talk in depth about automation across not only transactions but also planning, creative development, data management, decisioning, personalization, measurement, verification, optimization and more. This is all more far-reaching and complicated than the original notion of programmatic advertising. And yet we’re still using the term and concept of programmatic. It’s a vast oversimplification and cause of confusion.

Automation is a universally understood term that refers to all of the ways that technology is replacing or augmenting humans. Use of this term within advertising will force all of us to unpack what’s been obscured by the idea of programmatic, and it will empower discussions about the role automation plays or could play in specific supply chain processes, as well as the utility that can be provided by technology and data relative to their costs and, most importantly, the value that can be created or destroyed by automation.

These conversations need to be had and can lead to a spectrum of benefits. The benefits notably include increased transparency and control related to tools, data, ad inventory, vendors and associated costs; more efficient and more effective advertising; and better consumer experiences. The industry has long tended to rush toward adopting automated technologies, but relying on zeros and ones instead of a person isn’t always cheaper or faster – and the black boxes that have developed between buyers and sellers often cause more cost than benefit.

Questions such as “When does automation save time?” and “When doesn’t it?” and “What is the optimal mix between humans and machines?” need to be answered for each application of automation in a business.

Now, a change in language alone clearly can’t resolve all of these open issues. But a shift in perspective toward the challenges and opportunities created by automation across the supply chain is the foundation of these explorations.

The digital advertising ecosystem has achieved a scale so gargantuan and personalized that humans can’t do all of the driving. It’s up to business leaders to determine when their teams should step on the gas, tap the brakes or even change lanes – and when a machine should do this for them.

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  1. Fabrizio

    Could not agree more Dennis, was just having the same conversation over coffee with industry executives. Automation will make advertising more efficient, as any other industry, time to move on from the negative connotations associated to the word programmatic.

  2. Shawn Riegsecker

    Dennis, great article. I’m in agreement our industry should be more focused on automation as a goal and not shying away from its use as a moniker. The problem I see is that “programmatic” as a function hasn’t created efficiencies, measured in labor cost, relative to our industry yet. It’s created jobs for more people and has added operational cost via the amount of platforms needed to be managed that didn’t exist before. Add in the increasing role of data scientists and programmatic hasn’t been an efficiency gain for the industry. Automation is an inevitable outcome for us, and in all industries, and it’s something we should be more focused on discussing and working on solutions. I just wouldn’t lump what’s been previously referred to as “programmatic” until programmatic starts to actually focus on comprehensive automation as well as creating operational efficiencies and improve profit margins.