Will Programmatic Trading also lead in the Hispanic digital media market?
Programmatic digital media buying, or computerized trading of digital advertising, is advancing at a very rapid pace in the U.S. digital media market. Is it gaining as much traction in the U.S. Hispanic market? Will Wall Street like trading desks be as frequent in Hispanic ad agencies as in general market agencies? Portada interviewed major players in the digital media market to find out.
A recent MAGNA GLOBAL study forecasts that 43% of total online display advertising will be traded through programmatic mechanisms (or exchanges) in the US by 2017. MAGNA GLOBAL forecasts that programmatic will grow by more than 40% this year, rising to 23.2% of all online display advertising sold in 2013. By 2017, Magna predicts programmatic trading will rise to $7.533 billion, representing 43% of all online display advertising.
Programmatic, similar to computerized securities trading on Wall Street, can make digital media purchases more efficient as an algorithm looks for available inventory against a set of specific parameters set by the advertiser. The algorithm matches inventory demand and supply on a global scale. Are these sophisticated digital media trading mechanisms gaining traction in the U.S. Hispanic market?
"We have come across a limited number of agencies that have been asking about it, but as of yet have not seen a major slant towards programmatic buying when the focus is on Hispanic or Latin American based targeting," says Christopher Stanley, CEO and Founder of Online Advertising Network Alcance Media.
Stanley adds that it is also a question of resources: " For many Hispanic buyers, a key focus is on proving the success and showing where that success has come from versus just the statistics. For many companies, they are only starting to reach out to the Hispanic market and are trying to prove the case for more resources through that success."
As of yet, we have not seen a major slant towards programmatic buying when the focus is on Hispanic targeting.
" It really depends on the agency," says Justin Kuykendall, CEO and Founder of Pulpo Media, a Hispanic media and technology company that offers advertisers online media as well as a proprietary technology platform.
"We are working with some very sophisticated agencies that are very receptive and forward thinking in terms of data management, advanced targeting and segmentation. On the other hand, there are also agencies that are very resistant in the US that find it hard to go beyond their upfront plan with Univision--for example--that may only reach a fraction of Hispanics online. We are also seeing general market agencies that are working with us to target bilingual and even English dominant Hispanics in a much more engaging way than we used to see with people just translating banners to Spanish or just tracking CTR."'
Real Time Bidding
Programatic buying mechanisms are supplemented with Real Time Bidding (RTB) which adds an auction marketplace to programmatic buying. Instead of reserving prepaid advertising space, advertisers bid on each ad impression as it is served. The impression goes to the highest bidder and their ad is served on the page. According to Larry Harris Chief Marketing Officer at PubMatic, a digital media platform company for publishers, RTB ecpms (prices per thousand impressions) tend to be 5 times higher, on average, than ecpms offered by online ad networks. Harris notes that RTB amounts to 31% of all paid impressions and 48% of all revenues at publishers associated with PubMatic. PubMatic works with both traditional media companies as well as with so-called non-traditional ones, including companies like Toys "R" us and Target. PubMatic helps these companies to monetize their websites through RTB in a brand protected manner.
Slower growth in Mobile and Online Video
An additional obstacle to the growth of programmatic trading and RTB in the Hispanic market is that these trading technologies are not yet important when it comes to trading mobile advertising inventory. Hispanics index very high in mobile phone usage. The main reason for the low utilization of programmatic in mobile is that mobile audiences need to be better understood: while web browsers enable third-party cookies to provide data in the PC display advertising marketplace, mobile browsers, including Apple’s Safari browser, do often not accept third-party cookies. This has proven to be a major impediment to the programmatic trading of mobile ad inventory. As a result, other targeting data besides behavior is often used in mobile, such as location. According to PubMatic's Harris programmatic trading and RTB are still nascent in the mobile space. "There is a need for a more robust offering as well as a question of getting enough inventory as well as the ability to standardize and automate it."
The impact of programmatic trading and other digital advertising technologies on the Latin American and U.S. Hispanic market will be explored in-depth at Portada's Latin American Advertising and Media Summit on June 4-5 in Miami.
Learn more about the enormous role Online Video can play in the Latin (Latin America and U.S. Hispanic) marketing space. Book now for our Latin Online Video Forum, a required event for any marketing professional.