The Programmatic Threat
Programmatic advertising is a threat to some publishers. Donâ€™t be one of them.
According to some publishers, programmatic is just a way for agencies to commoditize ad inventory and make sales teams irrelevant. The truth is, software has mostly replaced travel agents, and it will replace some ad salespeople and media buyers too. The benefits to advertisers are too compelling for this not to happen. Amex has already announced it is going 100% programmatic, and others will follow.
So hoping it will just go away if you do nothing is not a healthy option.
If you sell display sponsorships with an effective CPM of $1,500 and agencies aren't pushing you to demonstrate ROI, then go ahead and keep milking it. But start working on a plan B now, because as programmatic expands, you'll have fewer places to hideâ€“whether you choose to participate or not.
Many publishers still equate programmatic with low-quality remnant inventory ad networks notorious for "black box" programs that are rife with fraud. That is not the reality of programmatic now. Amex isn't going to buy crap audiences. They want the most efficient way to reach great audiences. Programmatic is starting to deliver that, and it's getting more efficient as competition and participation grow.
If you're already delivering performance-based campaigns and your audience is valuable and engaged, programmatic could theoretically deliver higher CPMs than you're getting now. Programmatic will almost certainly improve sell-through, meaning fewer unsold impressions every month. Forbes is generating 30 percent of digital revenue from programmatic selling already.
A lot of the fear and confusion comes from the singularity-like speed with which the industry is evolving. That pace will only accelerate. If you are delivering demonstrable value to your advertisers now, it's time to get working on your programmatic strategy.
-- Mitch Speers is a 15-year digital marketing veteran and principal consultant at Step2 Strategy, a consulting firm dedicated to helping marketers and media companies get more from their marketing technology investments. We help companies figure out new ways to make money using the audiences, data and content assets they already have.
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