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What Media Planners Need to Know About Programmatic Buying

  |  April 3, 2012   |  Comments

Media planners and buyers who do not start engaging in programmatic buying will be in serious jeopardy of becoming obsolete.

Programmatic buying, or the process of executing media buys through digital technology platforms like ad exchanges, agency trading desks, and DSPs or SSPs rather than through manual RFPs, negotiation, and buying, has been advocated for several years now by industry futurists and analysts. (If you need a primer on these platforms, read this past column of mine.) To help put this viewpoint into perspective for media planners, I consulted Joanna O'Connell of Forrester Research, Inc. who co-authored the September 2011 report, "The Future of Digital Media Buying."

In their report, O'Connell and co-author Michael Greene assert that programmatic buying is the future and that those media planners and buyers who do not start engaging in programmatic buying will be in serious jeopardy of losing their jobs by becoming obsolete. Planning and buying as we have known it - decision-making based on understanding media properties and the targeted audiences they attract - will be replaced by quant-based (and cookie-reliant) technologies that, among other aspects of automation, look instead at how users respond to campaign objectives to define where to serve ads. This kind of buying, emphasizes O'Connell, improves operational efficiencies and reduces waste commonly caused by multi-network buys, which tend to deliver overlapping impressions.

Using programmatic buying, according to O'Connell, provides four key benefits:

  • Price transparency
  • Control
  • Granularity
  • Insight

forrester-future-of-digital-media-buying

O'Connell believes that programmatic buying benefits both direct response and brand advertisers, though direct response advertisers - who constantly seek incremental gains - will be more likely to gravitate toward this kind of solution first. Right now, programmatic buying best accommodates standard IAB display ad unit buys (as opposed to video, mobile, or custom formats), though SpotXchange/Forrester research (registration required) indicates that video programmatic inventory continues to increase.

With programmatic buying, what data points are retained, what are tossed out, or what are the new data points? O'Connell advises looking for patterns like using a DSP's tag on a conversion page to see what kinds of audience segments are hitting that page or days and times that conversions are high and using that information for planning/buying/insights.

Of course, persuading an established industry to make this seismic shift isn't easy. I asked O'Connell why she thinks digital media planners and buyers have been so slow to embrace programmatic buying. "Change is hard and scary. Plus, frankly, planners weren't hired to be technologists or quants. Probably most of them are thinking, 'Why am I not getting to work on the interesting custom brand building stuff?' not, 'Oooh, I love logging into platforms, pulling levers and looking at data.'" In other words, media planning and buying of the future might require an altogether different breed of person. This should be a pretty big wake-up call to both the people doing the planning and buying as well as agency management who has to think about either retraining or attracting and hiring this talent.

And what about advertising clients? We agencies, after all, constantly have to sell our processes as well as our ideas to them in order to get their buy-in. If programmatic buying has been hard for media planners and buyers to understand and embrace, imagine what it's like for an advertiser to get it! O'Connell advises that you start small - like dialing-down retargeting or some network buy allocations and swapping programmatic buys into your media mix. To me, it sounds like a big part of the equation will be client education, just as we've had to explain most forms of new digital media over the past 15 years.

Of course, the whole programmatic marketplace will be rocked if Do Not Track goes into effect and the majority of Internet users climb aboard. What will the future of digital media planning and buying look like then? It will be a very different animal, one that most people in the industry don't even want to think about (but that's a column for a different day).

Interested in more columns on programmatic buying? Subscribe to ClickZ's Networks & Exchanges columns.

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ABOUT THE AUTHOR

Hollis Thomases

A ClickZ expert columnist since 2005, Hollis Thomases (@hollisthomases) is president and founder of Maryland-based WebAdvantage.net, an online marketing company that provides results-centric, strategic Internet marketing services, including online media planning, SEO, PPC campaign management, social media marketing, and Internet consulting. Author of Twitter Marketing: An Hour a Day and an award-winning entrepreneur, Hollis is the Maryland 2007 SBA Small Business Person of the Year. Hollis speaks extensively on online marketing, having presented for ClickZ, the American Marketing Association, SES, The Newsletter and Electronic Publishers Association, The Kelsey Group, and the Vocus Worldwide User Forum. WebAdvantage.net's client list has included Nokia USA, Nature Made Vitamins, Johns Hopkins University, ENDO Pharmaceuticals, K'NEX Construction Toys, and Visit Baltimore. The agency was recognized as a "Small Giant" by the Greater Baltimore Tech Council and was chosen as a "Best Place for Business Women to Work" by "Smart Woman Magazine."

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