Programmatic Buying without industry specific analytics and know-how is a fantasy

Guest Post by Microsoft Partner Decentrix

For marketers, data represents both a challenge and an opportunity to develop intelligent analytical tools to better reach their customers. In many instances, data driven analytics in the traditional media space (which still represents over 76% of all advertising in the US) have been hampered by the proprietary nature of most media systems.

Leveraging that data in a meaningful way is an extremely complex process that requires great expertise.

Hot on the heels of analytics now comes automated trading of advertising commonly referred to as Programmatic Buying. In fact, IPG intends to automate 50% of media buying, expanding programmatic into Radio, TV and other linear mediums by 2016. It has become an unavoidable economic imperative of the media industry. As impression-based selling across multiple mediums increasingly becomes the norm, several business impacts are characterizing the advertising world. 

First, advertisers are increasingly expecting diversified multi-platform campaigns in pursuit of ever fragmenting audiences, and; second, the transaction volumes associated with these campaigns is increasing the average complexity and cost of campaign management.

This has directly impacted the cost of transacting business for the agency or media Buyer. And, it is becoming a limiting factor in their ability to manage costs effectively on behalf of the client.

At the same time as the Buyer’s business model becomes increasingly affected, the Sellers of advertising, the media companies, are requiring correspondingly careful management and valuation of both inventory and associated audiences.

This need to support scale and complexity, creates economic pressures that is driving the media industry to automate the buy-sell process.

The Linear Trading Model

Strictly speaking, programmatic buying corresponds to the Buyer’s point of view of an ad-exchange. In the ad-exchange model, the Buyer utilizes a demand side platform (DSP) to purchase the Seller’s inventory, which is generally based on unsold or ‘remnant’ long-tail inventory.

However, the practice of merely trading against remnant inventory has often led to unrealized audience value expectations for both Buyers and Sellers alike.

The approach that Decentrix has taken with Programmatic Buying is focused on addressing the following real-world business issues:

  • Providing appropriate audience data (either the currently traded currency such a Nielsen, Rentrak, Set-Top Box Data or a combination) to build a rich picture of the ideal target demographic.
  • Extending that Audience data by combining it with anonymized external data to provide pin-point marketing demographics and psychographics.
  • Optimizing campaigns based upon current inventory at the real-time market price.
  • Ensuring the best practices for security, auditability and reporting of results.
  • Integrating existing systems with a well-documented, supported and transparent protocol.

Automating the advertising trading model is about creating a win-win proposition.

By leveraging a common programmatic Buy-Sell process and protocol, the Seller’s sales resources can be focused on building better customer relationships, and educating Buyers on the unique or specifically valuable attributes of their properties.

While programmatic methods will streamline the Buy-Sell process and make it more efficient, media buying (and especially planning) doesn't go away. The role of the media agency becomes, in many ways, more critical and certainly more technical. Planning will become a bigger focus of campaign management as the execution will now be faster, resulting in greater emphasis on getting things right before the campaign runs.

Learn more about Programmatic Buying and the importance of a data-driven Audience and Inventory model to drive Revenue at the Decentrix kiosk in the Microsoft Booth.

Click here to schedule an appointment.