Making Money On-line: Why CMOs Need To Be Bullish On Programmatic Advertising

Tuesday 28 June 2016

Why CMOs Need To Be Bullish On Programmatic Advertising

Before I get to my thoughts on why CMOs need to be bullish on programmatic advertising, let's first take a look at just what programmatic advertising is.

We define it simply as “Automated advertising buying coupled with machine learning.” However, there are no shortages of definitions of the term programmatic advertising.

“Programmatic ad buying typically refers to the use of software to purchase digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It’s using machines to buy ads, basically.” —Digiday

“Programmatic advertising helps automate the decision-making process of media buying by targeting specific audiences and demographics.” —Marketing Land

The first definition helps explain it in very simply terms whereas the second helps explain what it does.

In terms of the different types of programmatic advertising, according to the Interactive Advertising Bureau (IAB)—which is an industry organization geared toward ensuring standards across the advertising ecosystem—there are two types of programmatic buying (the process in which you’re buying advertising):

1. Programmatic Direct
Also known as Premium Programmatic Advertising, this is an automated technology-driven method used for buying, selling, or fulfilling advertising. It provides for an Automated Guarantee Systematic automation of sales process. No insertion order (IO) or master services agreement (MSA) covered within the partnership.

2. Programmatic Real Time Bidding (RTB)
Two types of RTBs are Open Auction (audience targeting) and Private Marketplace Deals—which require a private marketplace and allow for fixed pricing and data overlays. We are beginning to see more and more of this type of programmatic advertising being used every day.

Why CMOs Need To Be Bullish On Programmatic Advertising

The shift to programmatic tactics means a few things for marketers and the industry as a whole. In essence, it has validated and delivered against the need for data-driven, and accountable ROI-based media delivery. Additionally, it has enabled an efficient method for publishers to monetize core inventory.

In a nutshell, programmatic advertising aligns media with brand lift metrics for real ROI and only spends money where it will be effective.

And it would appear that many of your fellow CMOs are planning on being bullish as eMarketer predicts that in 2016 programmatic TV spending will climb 127.8% to $710 million and by 2018 will account for 6% of all TV ad spending.

The New Currency of Advertising

Digital delivery and content is the new currency of advertising. Brands must find a way to connect while measuring returns on more than recall or click through rate (CTR). Only programmatic platforms can deliver that value.

Download The Programmatic Guide for Modern Marketers, Publishers, and Media Planners to learn how to deliver advertising that enhances the customer experience and a lot more.