1. The Wild West story of programmatic innovation

The Wild West story of programmatic innovation

Over the past decade, digital media in western markets has undergone what can only be described as a complete revolution.

Published: October 18, 2016 7:24 AM
There is always a learning curve in the implementation of any new technology. (Representative Image) There is always a learning curve in the implementation of any new technology. (Representative Image)

Over the past decade, digital media in western markets has undergone what can only be described as a complete revolution. Broadly speaking, India has followed a similar trajectory. Until recently, programmatic media adoption lagged behind the West. But this is now changing fast.

Today, in the UK, programmatic buying accounts for more than 70% of the display media marketplace — programmatic online video is growing fast and it’s poised to transform even traditional channels such as TV and out-of-home as infrastructures shift from analog to digital. The total programmatic spend in India is less than 10% and online video in particular is growing fast. Right now, programmatic has limited impact in TV and out-of-home.

There is always a learning curve in the implementation of any new technology. While the long-term advantages of the shift to programmatic are manifold, the industry still has some way to go. Any advertiser considering a move into programmatic buying should consider the following:

People are more important than ever: Technology is undoubtedly the key enabler for programmatic buying but success or failure doesn’t depend on selecting the right tech. In the early days, we assumed that technology would reduce our dependence on human expertise but in reality the opposite is true. The required skills have changed, with data and analytics skillsets becoming highly sought after in particular.

Machines are a little like children: According to the sales pitch of some ad tech companies, we’re entering a golden age of AI-powered media buying. But if left to their own devices, machines can wreak havoc on a marketer’s carefully constructed strategy. Buyers are often expected to balance many (potentially conflicting) requirements in their media investments — performance (for instance, cost per sale), media quality, environment suitability and regulatory restrictions to name just a few. Machines understand none of this by default and will simply follow their programming — we may see the emergence of genuinely intelligent media buying AIs in the next few years, but for the moment, constant human supervision is critical.

Caveat Emptor (buyer beware): Programmatic media marketplaces, both in India and the UK/US, are a very different beast to financial markets (an oft-used comparison) as they are completely unregulated in the conventional sense. Until recently, the most significant consequence of this was high levels of fraudulent activity, which made the programmatic ecosystem a minefield for inexperienced buyers. The industry has already made great strides to clean up the ecosystem, but legitimate players continue to fight an ongoing battle with fraudsters. As buyers have discovered the hard way, it pays to protect oneself with the latest technology and to treat all supply sources as potentially suspicious until proven otherwise.

The consumer is still the king: And we should treat them as such. In North American and European markets, advertising is facing spiralling levels of ad blocking and general antipathy from the general public. Currently, ad blocking is negligible in India but if advancements in ad technology come at the expense of consumer experience, the global industry will be fighting a losing battle.

Often it pays not to be an early adopter and let others work through the complexities. There is, of course, a good case for that in the Indian market — after all, hard lessons have certainly been learnt in western markets. However, to extend the ‘Wild West’ metaphor, there’s a gold rush on and it would be wise to stake a claim before the opportunity is lost.

Richard Lloyd

The author is chief digital officer EMEA, Maxus

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