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. 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.
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.
According to the founder of the Festival of Media Global, Charlie Crowe: “Automated media trading platforms have surely been a significant development in this industry. But while they have their place in elevating the effectiveness and reach of campaigns, they have yet to show maturity and gain the complete unquestioned acceptance of all industry peers”.
Are we ready?
In a survey of 100 media agencies, media owners and brands, conducted by the Festival of Media Global 2013, many believe media agencies are adapting well and that the media planner’s role will change to take on more of a strategic/advisory capacity; however there is some concern over a lack of industry standards and transparency, and the disadvantage of a lack of human input.
Most respondents (66%) say they expect automated media buying to increase next year, with 26% of the group indicating they feel this increase will be substantial. Similarly, 63% say they expect an overall increase in automated media planning, with 20% believing this will be substantial. 55% agree automated media on the whole has increased in the past year – 22% saying substantially.
The main benefit of automated media transacting is that it can save time and resources when planning and buying media – 63% say that this is the case. Ensuring clients get the best media value comes next, as selected by 35%, while 33% say automated media platforms reduce waste and human error. 29% say they enable brands to run more campaigns across more media outlets.
The lack of human input, which can affect results, is seen to be the biggest drawback, according to 68% of respondents. A lack of industry standards is also a concern, as agreed by 35%; followed by a lack of transparency, with 25% believing so. One cynical respondent remarks: “Media agencies automate by default in an effort to wring more profit out of clients.”
How will change the media planner´s role?
There are clear views on how the media planner’s role will change. 55% of respondents say they think it will change to become that of a consultant or advisor. 31% think it will merge with that of others such as strategists or account managers. Ironically, 18% say it will become more important yet another 18% feel it will become less important. One respondent says: “I don’t think the role would change much, just that the planner would have more time to devote to strategic and analytical thinking.”
Yet while 38% feel media agencies are embracing automation and looking at ways of working progressively with it, 25% say they are acting defensively and being slow to embrace it. 14% say media agencies are in a situation where they now have to work harder to prove their worth. “Innovation is needed in an increasingly digital media world,” comments one respondent.
Despite the attention generated by automated media platforms, the bulk of respondents (43%) say it makes up just 5% or less of their media strategy.
Just 4% say that up to 50% of the media business they handle is currently going through automated media channels. At the high use end of the spectrum, 5% say it comprises up to 90%, while just 1% say up to 100%.
Main Survey Results
- The biggest drawback of automated media transacting is the lack of human input, according to 68% of respondents
- 63% are sold on the main benefit being that it can save time and resources when planning and buying media
- 55% believe the media planner’s role will change to become more of an advisor
- 38% feel media agencies are embracing technology, yet 25% argue they are being slow to keep up
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.