At least once a week, I’ll see a story or overhear a conversation in which someone says programmatic media buying is killing independent media agencies. People will ask me my thoughts on the matter, and I’ll usually chuckle a little and tell them there’s nothing to be afraid of. But the questions—and the articles and conversations—keep coming. So, as we reach the end of 2013 and look ahead to the new year, I thought it would be as good an opportunity as any to state: yes, programmatic is expanding; no, it’s not going to do the rest of the ad industry any harm. And in fact, especially where location-based media is concerned, it’s going to do a lot of good.
It’s About Data
Effective digital marketing is driven by data—millions of individual data points that cannot be collected, processed, analyzed, and mined for insights (all in real time) by even the brightest team of data engineers alone. This data set has multiplied in size exponentially since the proliferation of mobile devices has meant marketers can have insight into not only what consumers are doing, but also where they’re doing it. With almost every step a person takes with his or her mobile device, new data is being created. It would be literally impossible to keep up with this inbound data, and make decisions with it in any sort of scalable way. Programmatic offerings create a model of efficiency: decisions can be made faster, in real time, with little-to-no intervention. And rather than destroying smaller buying agencies, it can make it plausible for small agencies to handle large accounts with complex location-specific goals, by allocating resources to more complicated tasks and letting programmatic take over the core data analysis. If anything, programmatic will increasingly be a challenge to larger agencies that have historically delivered location-specific content, but are unable to turn their attention in a meaningful way to data and analytics while continuing to maintain their core value propositions.
Saying Goodbye to Silos
Programmatic, at its best, is able to handle purchasing across multiple media platforms without any additional work. Whereas location-based (formerly digital out-of-home) buys have historically been purchased with their own budget (a budget that I’ve found was usually anything “left over” after more traditional channels were accounted for), programmatic allows for a more holistic approach to digital media purchasing, as it innately focuses on buying what’s best at any given time, changing its focus to what audience a platform can deliver. Whereas allocating ad spend into silos was easy when managed by people, it was never an ideal or sustainable option, and plenty of money was wasted on channels that didn’t systematically work together. Programmatic eliminates this waste and inefficiency. .
Brands have already embraced programmatic in a big way, with some even creating their own in-house programmatic buying teams. As such, extending programmatic to all aspects of digital marketing—including location—is a natural next step, and the easiest way to do so is to start regarding mobile and location-based video as one and the same. After all, location-based screens’ content is informed by mobile location data, so the need to break down these two particular silos is perhaps the strongest and most logical across all digital platforms.
Focusing on ROI
Ultimately, programmatic in display is, and always has been, about maximizing efficiency and optimizing content to direct response goals. In the case of location-based media, we can add the additional benefit of optimizing content to sales and store visits—the holy grail to digital advertisers. The practice of applying programmatic buying to location-based screens is still relatively new compared to display, so 2014 will be about showing the pairing works and defining the relevant metrics—not about taking away from negotiated buying or creative campaigns.