Why we're entering phase two of the programmatic revolution
Programmatic is about to enter a phase of ultra-customisation for brands and for people, writes Infectious Media's Andy Cocker
Programmatic technology has become an integral part of today’s advertising ecosystem. Billions of ad dollars are being pumped into digital channels with double digit year-on-year growth. Even now though, we’re only really at the dial up stage and it’s the next wave of innovation when we will start to see what programmatic is capable of.
You can chart the first phase of programmatic growth from the moment it launched on the market in 2006 and over the ten years that followed. It was a period dominated by the giants of ad-tech - Rubicon Project, AppNexus, MediaMath and others - who laid the foundations for the complex digital advertising ecosystem we know today.
But, with the pipes in place and programmatic firmly established, a new phase is emerging. We’re now entering a time of ultra-configuration, when advertisers will enjoy bespoke programmatic campaigns built specifically around their business goals and able to be adapted based on an almost limitless number of data variables.
Programmatic agencies will thrive
Whilst the big ad-tech firms almost exclusively drove the technology at the start, a new generation of media agencies will be responsible for the most important innovations in this space. Indeed, it will be these specialised agencies - with programmatic deep in their DNA - that will thrive, whilst more traditional agencies find it increasingly difficult to adapt.
At the heart of this development is the powerful role that STEM’s (Scientists, Technologists, Engineers and Mathematicians) are playing at the next generation of agencies. Rather than having to rely on off-the-shelf programmatic trading platforms, agencies will increasingly be expected to build their own, modular technology stacks, allowing for a far more adaptable approach to campaign configuration.
Armed with these new capabilities, along with the close connection they’ve traditionally had with advertisers, agencies are in a unique position to forge a much more collaborative relationship with brands around programmatic.
As advertiser businesses around the world go through processes of digital transformation and re-organise themselves around their data assets, they are starting to look for a new type of agency partner that can help them leverage these data assets for more effective marketing communications.
The traditional media agency value proposition of ‘buying power’ is quickly being replaced by a demand for configurable technology and consultancy services that help brands leverage their own data asset in the media ecosystem.
At the same time advertisers will also start to own (or contract) elements of the technology stack themselves. This could be a DMP or Ad-server or even DSPs and verification solutions. As this happens, agencies need to be able to configure their service and technology offering around the operating model of the advertiser.
Global networks become redundant
Another huge benefit this age of ultra-configuration will bring is creating greater efficiency in unnecessarily large global trading networks. The global agency groups, some with literally hundreds of offices around the world, will be familiar with this set up.
As programmatic becomes more sophisticated, and the ability to configure campaigns based on these variables matures, these vast global networks just won’t be necessary anymore. They will gradually be replaced by a smaller number of programmatic hubs in key regions.
The efficiencies this will bring for the agency will be huge. Equally impressive though will be the improvements it brings for the brand, being able to cut back on the fragmented teams they have to build in order to manage that relationship. It allows advertisers to integrate their digital marketing operations within smaller teams, giving a select number of marketers oversight over their global programmatic activities.
A new dawn in client and agency relations
As these new programmatic capabilities blossom, it will be vital for agencies to build a long-term, sustainable relationship with their client. That means that their campaigns need to be designed around the advertisers’ data assets and measured in ways that reflect their incremental contribution to business objectives.
Both service and technology operating models need to evolve to become more modular. It’s no longer a binary choice for advertisers between agency or in-house, so agencies need to be able to configure their offering to work with an advertiser’s preferred set up.
In essence, agencies will need to become micro-consultancies in their own right, capable of advising on and feeding into broader technology and media strategies. The next phase of programmatic growth will offer the chance for agencies to become the backbone of a company’s growth, with their influence being felt throughout an entire organisation, from the top down.
Perhaps the most exciting opportunity of all though for this next phase is for programmatic to finally deliver on its original promise: to move our industry away from a ‘one-size-fits-all’ approach to advertising. Whether it’s TV, radio or OOH advertising, ultra-configured programmatic will give us the skills we need to truly harness its potential.
Andy Cocker is COO and co-founder of Infectious Media