Programmatic direct, which amounts to using technology to directly buy guaranteed inventory, is on the rise. According to estimates from eMarketer, programmatic direct spending will grow from a modest $800 million this year to a whopping $8 billion by 2017.
Those numbers may sound surprising, especially considering that programmatic direct isn’t exactly a technological breakthrough. It’s been around, in one form or another, for a number of years, and the technology is more basic and straightforward than the technology behind real-time bidding (RTB)-powered programmatic. So, why is programmatic direct on the rise now when it’s less advanced than other forms of programmatic? To appreciate the answer, and why the rise of programmatic direct is good news for the RTB-sector, you first have to take a step back and look at the broader state of the industry.
Overcoming Programmatic Anxiety
For all the incredible growth of RTB-based programmatic, there are still an awful lot of markers who haven’t taken the plunge. Last year a survey by the ANA of 153 marketers revealed that 29 percent don’t have a clear understanding of programmatic buying. Another 26 percent indicated that while they understand the concept, they still need more education with respect to how to apply programmatic to their campaigns. Alarmingly, 12 percent of the marketers surveyed seemed to not even know that programmatic buying exists.
Considering how much discussion there has been of programmatic in the last year alone, it’s a safe bet that many of the marketers in that survey know a lot more today. By now most digital marketers recognize that programmatic is the future. And yet, either because they’re intimidated by the technology or because they’re brand marketers still under the illusion that RTB is only for direct-response marketing, many marketers still haven’t begun shifting their budgets to programmatic.
This is where programmatic direct comes in. If you’re sick and tired of RfPs and recognize the promise of programmatic, then programmatic direct is a natural first step into the new world of automated marketing. Marketers who don’t want to think about DSPs or any of the other acronyms that sometimes make programmatic seem far scarier than it actually is, can turn to programmatic direct without learning the ins and outs of RTB. And programmatic direct gives them the control of their campaigns that they’ve grown accustomed to — they’ll always know where and when their ads are appearing and exactly how much they’ll be paying for each impression.
The Good News for RTB Marketers
Why is the growth of programmatic direct such good news for the world of RTB? Because it’s inevitable that many of the marketers who try programmatic direct will, in the process, make themselves much more comfortable with the broader concept of programmatic. And if you’ve tried programmatic direct, trying out RTB is a logical next step. While programmatic direct is a fantastic tool that can make advertising much more efficient, it ultimately can’t offer the efficiency that comes with bidding on each impression.
This, of course, isn’t to say that every brand advertiser is going to try programmatic direct before diving into full-fledged RTB. Many brand advertisers have already shifted their budgets to RTB spends, and many will continue to do so in the year ahead. But RTB marketers have good reason to celebrate programmatic direct’s recent growth. Some marketers need to get their feet wet before going all the way in. That’s understandable enough. And the more marketers who become comfortable with programmatic, the better off the entire industry will be.
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