The State of Programmatic Media Buying

In June and July 2017, the ANA conducted a survey to get a baseline understanding of programmatic buying by the overall ANA member community, including how programmatic buying is being measured and staffed and the level of transparency marketers have into their programmatic buying initiatives. In total, 149 client-side marketers participated in the survey. Respondents have a median of 21 years of experience in marketing. More than two-thirds of respondents (67 percent) report their job level as director or above. Approximately 66 percent of respondents focus their marketing on B-to-C efforts, 13 percent on B-to-B marketing, and 21 percent on both B-to-B and B-to-C. A total of 48 percent of respondents work at companies with annual U.S. media budgets under $100 million, and 52 percent work at companies with media budgets of $100 million and more.

• Programmatic media buying is defined as the automation of media buying and selling processes and decisions, enhanced through data. The growth of programmatic buying has been well documented.
• In its latest forecast, eMarketer estimates nearly four of every five U.S. digital display dollars will transact programmatically in 2017, totaling $32.6 billion. By the end of the forecast period, that share will rise to 84 percent.1
• Programmatic display spending will reach nearly $33 billion in 2017. Forecasts predict that spending will reach over $45 billion by 2019. Programmatic advertising is designed to make advertising more targeted and relevant to make buying more efficient. The term programmatic can apply to anything from display to digital out-of-home to television. Programmatic is often described as the ability to reach the right audience with the right message at the right time. By using technology and data to automate media buying, it theoretically becomes much easier and cheaper for a brand to reach its target audience.
• Before the advent of programmatic advertising in 2007, if an advertiser wanted to buy media inventory from a publisher, it would do this manually and directly. This could be a tedious process, which involved negotiations, insertion orders, manual Background and Methodology 1 eMarketer: “eMarketer Releases New Programmatic Advertising Estimates.” https://www.emarketer.com/Article/eMarketer-Releases-New-Programmatic-AdvertisingEstimates/1015682 2 Ibid. 4 // The State of Programmatic Media Buying tracking, and long wait times. Now brands or agencies use a demand-side platform (DSP) to decide which impressions to buy and how much to pay for them, while publishers use a supply-side platform (SSP) to sell ad space. These two platforms are then matched up in real time.
• However, programmatic advertising is not without its downsides. The industry is rife with jargon, the programmatic supply chain involves various intermediaries, and many marketers have a difficult time making sense of the field. This lack of transparency led Procter & Gamble’s chief brand officer Marc Pritchard to issue a call to arms on the industry to clean up “the murky media supply system” and improve areas such as viewability, ad fraud, and measurement. Brand safety concerns have led to a shift to “programmatic direct buys,” where digital media buyers can purchase specific inventory directly from a publisher like The New York Times if they want to lock in a price on ads they know they’ll want, or to make sure they’ve got the right placements for a planned campaign. Programmatic direct buying provides more control over ad buys and guarantees those buys will deliver agreed-upon premium inventory.
• For publishers, going direct allows them to retain their relationships with advertisers by offering the same premium supply via programmatic ads. Concerns around transparency and ad fraud also mean that brands are increasingly transitioning from managed buys to running programmatic buying in-house. Companies including EA, Target, and Unilever have all developed in-house programmatic expertise, with Target even activating its own first-party data so that agencies and its vendor partners — brands that sell products in Target’s stores — can use it to guide media buys. Many companies, however, don’t have the desire, budget, talent pool, or bandwidth to bring programmatic buying in-house. Many prefer to partner with technical experts to plan and execute their programmatic campaigns, either outsourcing entirely or defining their own hybrid approach. Regardless of staffing structures, programmatic advertising is here to stay. 

Source: https://www.ana.net/miccontent/show/id/ii-2017-state-of-programmatic