This post draws on data from Street Fight’s National-to-Local report, which delves into enterprise marketers’ experiences, needs, and spending outlook.
Enterprise marketers – especially those that value local media highly – rate programmatic ad buying across digital and traditional media as one of their top three local marketing technology interests. As demand may outpace supply right now, local media publishers and marketing tech suppliers should view that as a chance to get their offerings in gear, rather than avoid the fray in fear of commoditized inventory.
In digital display advertising, programmatic buying is characterized by machine-to-machine purchasing, using publisher and ad network APIs, and demand- and supply-side platforms (DSPs, SSPs). It’s often done using real-time auction exchanges and marketplaces. Buyers aim for operations efficiency and lower prices, and target by audience rather than publisher brand. Sellers use programmatic for better yield management and to participate in big buys that require more inventory than they might have on their own sites. There is tension between efficiency and commoditization, and networks can be plagued by remnant or third-tier inventory. Buyers complain of transparency – not knowing where their ads run – and outright fraud from bots and squatters.
Using an extremely loose and inclusive definition of “programmatic” — i.e., any advertising that is bought via API — eMarketer projects that two-thirds of U.S. digital display spending will be programmatic in 2016, for a total of $22 billion. In an earlier forecast, Borrell Associates pegged last year’s local digital programmatic spending in the 10% range, although that share doubled from the prior year.
But that’s just digital.
When Street Fight surveyed national brands and retailers about their local marketing efforts, we asked decision makers about which new marketing techniques and technologies were on their near-term radars. “Programmatic local ad-buying across digital and traditional media” ranked third on the list, right after mobile push and real-time location data. Nearly one-third (32%) of the survey respondents who also said that local media and content was important for their marketing were thinking about such cross-channel programmatic. (That figure was 26% for the overall survey, and also ranked number three). Interest appeared highest for marketers who found local TV effective, but also played strongly with radio and print fans.
So the demand for multichannel programmatic is there, but is the supply? Companies like Mediaocean, Tubemogul, and Videology offer TV ad operations platforms that support some features that resemble digital display programmatic. And NBC/Comcast (via Tubemogul) and AT&T/DirecTV (via Videology) use the term “programmatic TV.” No doubt Verizon will soon do so. In most cases, however, these offerings are totally separate from addressable infrastructure that targets to the set-top box. Meanwhile, cable networks and broadcasters don’t want buyers to cherry-pick inventory among shows, and the TV buying process doesn’t support real-time auctions. Buyers complain about remnant inventory rather than the reinvention of the spot market.
In radio, iHeartRadio (formerly Clear Channel) is making digital and streaming inventory available via tech from Jelli and AdsWizz, in a private marketplace. But that’s streaming to apps, not over-the-air radio yet. Google has tried and failed to deliver TV and radio ad networks in the past. In print, Time Inc. magazines offer ad-purchasing through MediaMath’s DSP, in an effort to target distinct reader types characterized by offline surveys.
For the moment, traditional media programmatic doesn’t replicate digital display buying conditions. Marketplaces are highly fragmented, there’s nothing like real-time bidding, and audience-targeting may be housed in completely different technology infrastructures. Still, it’s a start.
Local media, and suppliers of marketing technologies and services, can help grease the wheels for multichannel programmatic by doing the following:
- Identify what characteristics of digital programmatic buying a marketer is actually interested in when he’s talking about programmatic TV, radio, or print. Chances are, it’s some combination of operations and audience targeting. To avoid pricing pressure, pitch the value of targeting and operational cost savings.
- Create high-quality marketplaces. There’s still plenty of time to build premium networks with trusted local media brands and higher-quality inventory. Programmatic native advertising is just another name for cross-title sponsorships targeted at particular audience types.
- Help ease measurement incompatibility. Digital programmatic uses impressions rather than GRPs. Streaming video “views” have nothing to do with the way Nielsen counts audience ratings. Brands are taking digital programmatic in-house, in part because they don’t trust their agencies to measure things properly. Smart sellers will help buyers translate across medium.
David Card is Street Fight’s director of research.