Programmatic technologies have opened up a world of new possibilities for media buyers, making it easier than ever before to deliver relevant, timely messaging to the people most likely to convert. San Diego is a hotbed for early adapters especially when it comes to creative and website development. We took a look at the city’s digital advertising landscape and found that many agencies have already embraced the power of programmatic technologies and have begun to use this technology to execute their clients’ ad campaigns.
What is Programmatic?
Programmatic represents a paradigm shift in the digital advertising world. But many media buyers are confused about what the term means. These misconceptions make programmatic seem too overwhelming to implement. “Programmatic” is an umbrella term. It describes a range of technologies that automate the buying, placement, and optimization of ad campaigns. Instead of negotiating media deals on the telephone or fax machine, you turn to automated platforms: exchanges, trading desks, and demand-side platforms (DSPs). A lot of people also confuse programmatic with real-time bidding. But real-time bidding—buying ads through computer-run auctions—is just one way to trade media programmatically. Ad buys are programmatic as long as they’re processed through machines instead of people.
How Programmatic Is Changing the Way Advertisers Connect with Consumers
Programmatic’s implications go far beyond simply changing the mechanisms how media is bought and sold. These technologies are changing how advertisers engage with consumers—helping them deliver personalized, relevant ad experiences. How? Programmatic empowers media buyers to target individuals instead of locations. Targeting becomes more granular, and buyers can leverage their data (as well as third-party data) to focus their ad spend on impressions most likely to convert.
Media buyers can set campaign parameters about whom to target and how much they’re willing to spend. After programmatic platforms layer additional behavioral and audience data on top of these parameters, they help buyers serve the right creative, at the right place and at the right time. Programmatic also helps media buyers make their ad campaigns more cost effective. Once campaigns begin, they generate data analytical advertisers can use to find out more about their customers and make adjustments mid-campaign to maximize their ROI.
Programmatic, Now and Moving Forward
Programmatic is changing quickly, and media buyers are scrambling to find their place in an ever-evolving digital landscape. Just a few years ago, many digital advertisers were skeptical to implement programmatic campaigns. But they’ve seen others tap into programmatic’s potential, and many have now embraced it as an essential component of their strategies.
Last year saw the biggest expansion in programmatic advertising to date. And there are no sign of things slowing down; eMarketer predicts that automated buying and selling of digital ads will double from $10 billion in 2014 to $20 billion by 2016. Mobile programmatic spending is also poised for explosive growth. It’s set to reach $8.36 billion in the United States by 2016, outpacing desktop programmatic spend for the first time as more users interact on multiple devices. The number of video ads purchased programmatically will also soar. Spending will reach $3.84 billion by 2016, accounting for 40% of all digital video ads online.
A Look at San Diego’s Programmatic Advertising Agencies
As programmatic starts flourishing and taking more and more share of an overall media budget, the San Diego digital marketplace provides an large scale of skill sets and offers. The city is a stronghold for creative and website development organizations, however, digital media outside of SEO has always been a lagging element of capabilities offered. The same pattern is found as well when it comes to programmatic service providers.
We conducted an active survey of San Diego digital agencies and their programmatic capabilities, methods and approaches. We found that while most online agencies are executing retargeting and/ or paid search campaigns, few are offering display, mobile, video, native or media analytics. There is room for growth in the area of fraud control, with only 9% of agencies tackling retargeting fraud. Agencies are still starting to get behind the latest technologies, with only 1% of agencies using algorithmic attribution. And even with the advanced technology and efficiency of programmatic buying, 22% of agencies are still using insertion orders as their main media buying method.
Programmatic advertising provides marketers with the most efficient and cost-effective way to run campaigns that reach highest potential audiences. Moving forward, the agencies that will flourish in the increasingly innovative digital ad space, will be ones that embrace the full capabilities and technologies of programmatic.