Programmatic Ad Spend to Achieve $84 Billion Next Year

                                    Image credit: State of Digital

“Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions” [1]

In a nutshell, programmatic advertising is buying advertising space and placing ads via an auction procedure. According to Zenith's latest report, Programmatic Marketing Forecasts: “65% of all money spent on advertising in digital media in 2019, will be traded programmatically” [1].

Advertisers are predicted to shell out US$84 billion on programmatic advertising next year – a healthier figure than this year's US$70 billion, and one that “represents 62% of digital media expenditure” [1]. Further, Zenith's research indicates that: “in 2020 advertisers will spend US$98 billion on programmatic advertising, representing 68% of their expenditure on digital media advertising” [1]. Within the term 'digital media advertising,' Zenith includes all types of paid-for online advertising content. This includes: social media and online video, but omits classified advertising and paid searches [2].

Zenith's ROI (return on investment) agency, notes that: trading programmatically has come a very long way from its humble beginning which consisted of constructing cheap coverage from remnant inventory. These days, it is found in premium environments through arrangements in which agencies use their relationship and scale with publishers to guarantee that their clients' advertisements are displayed in the best place at the right price [2].

Driving Optimum Success

As Zenith states: the route to success is being able to achieve unique competitive advantage by generating unique data sets that are normally founded on data partnerships or first-party data, and to utilise them for crafting brand messages and communicating these in a place where they are likely to propel consumers along the consumer pathway [2].

Optimising Programmatic Activity

“AI promises to unlock new understanding of customers as people, as well as improving the optimisation of the trading process” [1]

A number of agencies have gone the extra mile to perfect their programmatic activity by modelling these datasets. This certainly appears to be the way forward, as through its application of machine learning to attribution modelling, Zenith is now regarded as a leader in the field [2]. Moreover, Zenith, [and international companies such as OONA TV – the ad-based free cutting-edge OTT global entertainment platform that has a strong focus on AI], strongly believe in programmatic advertising, and understand that this extra process can deliver double-digit increases in performance [2].

Positive Changes

Global Head of Digital & Innovation at Zenith Media, Benoit Cacheux, stated: “We believe that the growth of programmatic will continue to be fueled by improvements in the quality of media available in programmatic environments... and the greater availability of programmatic mobile media, as well as the sophistication provided by ad tech solutions such as data management platforms and connected ad tech stacks” [3]. As programmatic trading is expanding, more video, mobile and audio formats are continually appearing online. - Although in some cases, it does have to be said that agencies and brands should take steps to get publishers to ameliorate their inventory quality.

Slower Growth

“Technology is making programmatic advertising work harder for brands” [1]

Programmatic advertising growth is actually slowing down as it takes its place as the world's most important digital trading method. Zenith predicts that the spend on programmatic advertising will only grow by 24% this year - (it was 32% in 2017). Further, their forecast for 2019 and 2020, shows further drops down to 19% and 17% respectively.

                                  Credit. dev.meioemensagem

The Big Players

The US holds the number one slot for heading the largest programmatic market, and it is anticipated that this year, its programmatic ad-spend will amount to US$40.6 billion. - (This equates to 58% of the global total). Rolling in at number two, is China, although the gap between first and second place is massive – its programmatic ad-spend was US$7.9 billion. And the United Kingdom takes third place with a programmatic ad-spend of US$5.6 billion [1].

Further, the US also comes up trumps for embracing the most programmatic advertising, as this year it traded 83% of all digital media programmatically. Slightly lower at 82%, Canada takes second place, followed by the UK's, 76%, and Denmark's 75%. Moreover, Zenith predicts that: “by 2020, programmatic advertising will account for more than 80% of digital media in all four markets” [1], and in the same year, Canada will be “spending 99% of digital media programmatically” [1]. Zenith anticipates that every market will eventually follow suit, and employ programmatic trading for all digital media transactions [1].

The Time Scale

The transformation period for full-on programmatic trading, is not happening quite as quickly as Zenith predicted. The slowdown in spending is mainly due to advertisers focusing on making their programmatic capability more effective by pouring more funds into data and infrastructure.

Furthermore, the huge challenges associated with privacy legislation, such as the European Union's complex General Data Protection Regulation, has meant that specific information that was regularly used within programmatic transactions, is now out of bounds. And in addition to this, other data has become more expensive to have processed [1].

Advertisers Need to Step Up

Advertisers need to shake things up internally, if they want to optimise their programmatic campaigns, and ensure that trading receives the high-grade support it warrants. Further, any programmatic strategy can only be as effective as the data that is utilised to create it [1].

Data is King

Every programmatic advertiser must have a game plan for acquiring the best and most comprehensive data available, and should regard such information, as an essential corporate asset [1]. OONA TV's deep data collection methods make an excellent case study, and its strategy is certainly proving to be one of OONA Global's major corporate assets.

OONA - Leading By Example

OONA is currently set up to offer ad-based local and international video on-demand and live entertainment via hundreds of top channels, to 185 million Indonesians, and is on course to provide the same for billions of people in other parts of Asia, Africa, the Middle East, South America, the US and Europe.

As it focuses on user experience for competitive advantage, OONA is naturally geared up towards programmatic advertising. This employs various parameters such as viewers' historical data and advanced algorithms, which calculate real-time bids for each advert that is placed by channel owners and content holders. In these scenarios, the purchasing transactions are immediate.

OONA offers a strong business model to channels and content holders via its OTT monetization methods. Programmatic advertising is a highly successful advertising option on the OONA platform. It effortlessly streamlines the process of ad buying via the use of automated data-driven, technology. There are three platforms involved in this type of marketing automation: 1. DMPs (data management platforms) which analyse and collect the users' information to drive specific targeting. 2. SSPs (supply-side platforms) which maintain the publishers' ad inventory, and 3. DSPs (demand-side platforms) which provide ad purchases on the open market [4].

OONA's advertising options include: 1. A programmatic advertising video (30 seconds), CMP and CPC revenue; 2. Programmatic display advertising (30 seconds), CMP and CPC revenue; 3. Programmatic advertising short-video (pre-roll 6 seconds); and 4. Pay per view micro-transactions.

What is So Advantageous About Programmatic Advertising for OONA?

Programmatic marketing empowers OONA's channel and content owners so they can target specific audiences. This can cover various demographic segments including location, social standing, gender, age and interests. Moreover, ads can be limited to certain frequencies and specific times in the day to coincide with target markets, such as in between live sports specials. With this method, channel and content owners are only paying for hugely effective adverts, delivered at the right time to the right people.

The bottom line is that programmatic advertising increases efficiency and saves money - two very valuable advantages. By opting for automation, it puts human beings are out of the equation, and buying ads becomes less expensive and more dependable. Also, very importantly, program channels and content holders are able to optimize their KPIs (key performance indicators), and attain a deeper insight into consumers' behaviour [5].

The Rock and Roll Future of Programmatic Advertising

There are a number of predictions: 1. “Organizations not championing automation will fall behind those that do” [5]. 2. Traction will be gained in the field of DCO (dynamic creative optimization), the state-of-the-art display advertising which delivers automatic multi-variate testing, namely, algorithms which interpret results and ascertain how to deliver advertisements for the most optimal performance. 3. There will be more header bidding [3], such as that offered by OONA. This empowers channels and content owners with a high tech method so they are able to offer inventory to multiple advertising exchanges at the same time. 4. Personalisation will become more intelligent. When channels and content owners are able to laser focus their programmatic ads to individual viewers, then they can leverage strategies including explicit demographics and geographical location [5].

OONA Understands the Immense Value of First-Party Data

As Zenith stresses, first-party data is the most valuable information. - This either comes directly from consumers, or is tracked activity from owned websites. By taking a cutting-edge AI approach,OONA creates a deep personal one-to-one experience between the user and its PA genie in the app, Siskabot. She appears in person when the app is downloaded, and has regular conversations with each user to:

1. Find out more about them, what they like and dislike, and the types of products they use.
2. To understand the exact type of entertainment content they love, be it: series, films, action, comedy, cartoons, celebrity news, fashion, cookery, combat, live sports, motoring, educational programs, documentaries, news, etc.
3. And to discover what kind of branded products and services they would chose, and the cool video and other types of ads they would like to see.

First-Party Data Virtually Guaranteed

In order to ensure direct communication via regular chats between users and Siskabot, OONA gives its millions of viewers loyalty rewards in the form of tcoins. This virtual currency benefits viewers just for watching content and personalised ads; sharing the content they love with friends and family; and interacting with OONA's PA, Siskabot. These tcoins can be exchanged for a broad range of branded goods, meals, fun days out, discounts, free telephone minutes and telcom products. Further, tcoin collectors even stand a change of winning regular prizes such as the hottest mobile phones, or cool motorbikes, with OONA's daily bid n'win challenge. All these great benefits virtually guarantee frequent first-party data, all of which is protected and kept strictly confidential.

On top of this first-party data, OONA uses deep data from machine learning and other conventional sources. All these aspects are essential to guarantee the immense success that the ad-funded OONA platform needs for running a totally free, second-to-none global entertainment experience in broadcast quality.

References

[1]. Zenith (2018). “65% of digital media to be programmatic in 2019.” https://www.zenithmedia.com/65-of-digital-media-to-be-programmatic-in-2019/ Accessed 26 Nov. 2018.

[2]. Zenith (2017). “67% of digital display to be sold programmatically by 2019.” https://www.zenithmedia.com/programmatic-marketing-forecasts/ Accessed 26 Nov. 2018.

[3]. Zenith Media (2017). “Programmatic ads to grow 31% in 2017, ahead of all other channels.” Retrieved from:https://www.zenithmedia.com/%EF%BB%BF%EF%BB%BF%EF%BB%BFprogrammatic-ads-grow-31-2017-ahead-channels/ Accessed 26 Nov. 2018.

[4]. Statistica (n.d.).“Programmatic digital display advertising spending in the United States from 2013 to 2019 (in billion U.S. Dollars).” Retrieved from:

https://www.statista.com/statistics/278727/programmatic-display-ad-spend-in-the-us/ Accessed 26 Nov. 2018.

[5]. Kloefkorn, Sheila (2017). “Trends In Programmatic Advertising To Watch This Year.” Forbes. Retrieved from:https://www.forbes.com/sites/forbesagencycouncil/2017/05/16/trends-in-programmatic-advertising-to-watch-this-year/#781cb7cf7f11 Accessed 26 Nov. 2018.