COVID-19 hasn’t stalled programmatic but how can it be optimised?
Coronavirus has changed many aspects of online advertising, but passion for programmatic remains strong. In fact, research from the Internet Advertising Bureau (IAB) shows that far from derailing programmatic, the pandemic has seen more spend flowing through automated pipes; with 29% of buy-side decision-makers due to increase their investment.
Given the huge efficiency benefits of programmatic, this comes as no surprise. Over the last decade, increasingly sophisticated data-driven targeting capabilities have made automated dealing the buying and selling method of choice; for display ads alone, global programmatic ad spend has risen from 10.4% in 2012 to 66.3% in 2019.
Now, the rising need to maintain brand visibility and ensure smart budget allocation means machine-driven precision is more vital than ever. But to maximise effectiveness, buyers need deep understanding. That’s why the IAB gathered several leading forces to share their expertise in a recent webinar exploring the state of automated advertising, and its future.
Here is a quick-fire summary of the key highlights:
Finding a new post-cookie identity
Identity is an integral component of the programmatic mix. To accurately measure, control and target digital ads, buyers and technology vendors must be able to follow the footprint of each consumer; and to achieve that, they need a consistent view of individual identity. During the past year, however, traditional methods of establishing identity have faced growing restrictions. As privacy regulations and browser restrictions increase, third-party cookies long relied on for tracking consumers across the web are losing their power.
For Lisa Kalyuzhny, Senior Director of Advertiser Solutions for PubMatic EMEA, this shift isn’t unexpected; as she points out: cookies have not changed in 25 years while the internet has evolved apace. But the crucial importance of understanding who consumers are and what they want means there is an urgent need to find a robust long-term solution — not just “a quick fix” — that will ensure the online ecosystem can continue to leverage the advantages of large-scale programmatic profiling, segmentation and optimisation, even without third-party data.
Addressing this challenge requires greater input and collaboration from all sides: demand partners, publishers, ad exchanges, brands, and media agencies. But there are positive signs of progress. Kalyuzhny sees many causes for optimism; including real IDs using deterministic first-party publisher data, standardised IDs such as the IAB’s DigiTrust initiative, and probabilistic ID stitching. Through collective innovation, the industry can create a better future for programmatic campaigns and ensure the open web continues to thrive.
Navigating a clearer path to supply
Acronyms are already a core feature of the programmatic landscape, but a new term is quickly rising to dominate discussion: supply path optimisation (SPO). At its core, SPO is rooted in the increasing need to cut through complexity driven by header bidding, as explained by Amber Tomlinson — Rubicon Project’s EMEA DSP lead — and Account Director for the UK and Nordics, Helen Keelan. With header bidding came scope for publishers to expand their pool of demand by offering inventory to multiple supply-side platforms (SSPs). But the shift also created issues for buyers: multiple paths have raised the risk of variable costs and quality, as well as fuelling poor transparency and convolution.
Tomlinson feels SPO is the ideal way to clean up programmatic buying. With the driving aim of helping buyers find the best way to access their desired inventory, it can be used to boost results by pinpointing the most “transparent, direct, and cost-effective” supply paths. But which route brands and agencies take will depend on their unique requirements. To make the right choice, they must guide their selections by bearing two critical factors in mind:
- Value – what counts as ‘meaningful value’ is different for each buyer, and this makes it crucial to weigh up unique priorities when making decisions, instead of simply handing over the reins to their demand side platform (DSP). For example, some may prefer tech with the capability to support algorithmic optimisation, while others require an infrastructure that’s flexible enough to build their own marketplace.
- Transparency – buyers must ensure partners not only offer access to essential data, but also demonstrate commitment to open practice through adoption of initiatives such as txt and Sellers.json. This dedication to upfront and honest dealing is always vital, but it’s especially important in the wake of the ISBA’s Programmatic Supply Chain study and the sizeable ‘unknown delta’ of ad spend it reveals.
Stepping into the AI future
We’re a long way from the days when the ability to find specific audiences and automatically deliver a tailored digital ad was revolutionary. But Dan Calladine, head of media futures at Carat, feels there are still new frontiers to explore. In particular, Calladine predicts that artificial intelligence (AI) will significantly enhance the efficiency of programmatic and make it easier to buy digital inventory that has a stringer chance of driving returns. In addition to “predictive analytics that can calculate probable performance and fuel smarter bidding”, he predicts the next few years will broaden the horizons of contextual ads; bringing the ability to target audiences based on emotion and deep semantic insight.
Calladine not only expects an influx of intelligent content matching and spend distribution, but he also sees the seeds of coming change in current innovations. Citing leaders in dynamic creative optimisation (DCO), such as A Million Ads, he anticipates that the programmatic space of tomorrow will set a new bar for multi-factor personalisation on every channel, from digital-out-home (DOOH) to audio and connected TV.
Alongside challenges, COVID-19 has given digital advertising renewed motivation to keep advancing. But as more brands and agencies turn to programmatic to bolster results and returns, ensuring ongoing effectiveness will mean sustaining an even balance. As well as pushing new boundaries in AI analytics and optimisation, the industry must maintain a consistent focus on collaboration, quality, and transparency.