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Looking for Programmatic Everything in 2016? Keep Waiting

(As Posted on Adotas)

Programmatic technology has revolutionized the digital ad world, to the point where many are expecting similar waves of change in the traditional media world. Programmatic tech and audience data models have the power to disrupt the print, radio, TV and out of home markets and also serve as a foundational force in any advertising models applied to the Internet of Things.

But that’s the future. Marketers took the long road to programmatic in both display and video, and it will take more time for traditional channels to begin shifting towards programmatic. Anyone expecting 2016 to be the year that media goes full on programmatic is bound to be disappointed. This year will be a transformational one, but not in terms of traditional ad budgets. The industry continues to strengthen the programmatic foundation this year through acquisitions, infrastructure, and transparency.

The journey to a fully programmatic landscape starts with workflow. This is the low-hanging fruit, but it’s the necessary first step. Advertising technology innovation has built a solid foundation for display and has now moved on to video and mobile, which are both more complex formats. Building programmatic TV and out-of-home capabilities on top of these existing tech stacks requires new innovation from experienced programmatic teams that have the vision to bridge these channels.

Comcast’s Acquisition of Freewheel

Comcast’s acquisition of Freewheel is one example. The media company undoubtedly sees some value in online video advertising, but the real value in Freewheel’s team lies in the fact that they are already thinking about programmatic TV and can now build those systems within a conglomerate like Comcast.

With that infrastructure in place, we’ll see a rise of super platforms that can identify a consumer across multiple devices and provide advertisers with full funnel attribution models. Like Comcast, Verizon may have a big opportunity here as one of the players that can connect the dots between TV, mobile and the desktop Internet.

Realizing this vision of advertiser utopia will take a lot of acquisition and investment, and marketers will only seriously consider shifting more of their advertising budgets to programmatic channels with these cross-channel pieces in place. Even then, there needs to be a clear benefit in order to drive the change in advertisers buying behaviors. Brands are under increased internal scrutiny. In an era of increased transparency and efficiency, they want more for less. In short, they want less waste. Even though programmatic’s promise is all about efficiency, big budgets aren’t rapidly shifting to more data-driven digital advertising channels just yet, which means marketers don’t feel that technology has matured enough and earned the trust of brands.

Transparency Issues

Transparency is a huge factor that will tip the scales in this shift. TV doesn’t have the fraud questions currently plaguing online video, but it’s more difficult to get the same performance transparency. Brands know how many of their ads are viewable online, but don’t have that kind of visibility into TV, and certainly not with detailed audience data. The cable operators and TV manufacturers have access to some of this very specific audience data today, but they haven’t unlocked that intelligence for hypertargeting similar to what’s available to digital advertisers. That data will change how advertisers approach TV and programmatic, and it’s likely to inspire advertisers to slowly abandon ratings points and increase their investment in more granular TV audience data.

The future is bright but there are still too many important pieces missing, which is why 2016 will remain a year of investment, acquisition, plumbing and workflow. There will continue to be lots of moves, possibly including some broadcast companies embracing their future as technology companies, but the budget tipping point is still a ways off.

By Jeremy Ostermiller

CEO & Co-founder

Edison Interactive

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