Programmatic Buying… It’s Not That Complicated

Programmatic Buying is all the rage right now. It has been and continues to be perceived as a threat and an opportunity by advertising professionals and marketers depending upon one’s comfort and grasp of the technology. Those within the industry, particularly advertising agencies and their trading desks or the multitude of vendors that deliver programmatic solutions and services, continue to benefit from the perceived complexity of programmatic buying and oftentimes deliberately contribute to the confusion to serve their own interests. I have witnessed first-hand and heard directly from Marketers examples of vendors and agency representatives deliberately engaging in obfuscation about programmatic buying and how it works in order to justify the investment in their solutions.

A Paradigm Shift

Programmatic buying, like the introduction of any new advanced technology, can appear to be difficult to understand and even threatening to many. Just like a foreign language, from the outside and to the unknown it sounds strange and unfamiliar, until it is understood. Programmatic buying is similar, but perhaps easier and faster to comprehend than the time it takes to learn a new language.

Programmatic buying is not a technology, it is a process that describes the exchange of information via automation. Quite simply we define ‘Programmatic buying as the elimination of paper-based transactions, via automation’. Programmatic buying is a paradigm shift in how the advertising industry functions and is much bigger than the world of digital within which it has now established a firm foothold. According to eMarketer, “nearly four of every five US digital display dollars will transact programmatically in 2017, totaling $32.56 billion”. In Canada, programmatic buying is expected to climb to 74.0% share of display ad spending by 2018. While we are seeing the acceleration of programmatic buying in digital advertising, its real impact will be felt as it permeates through other mediums including Out-Of-Home and most importantly, Television.

Historical Context

Programmatic buying, by its definition, did not originate within the advertising industry, but something that the advertising industry has co-opted from others. The first industry to truly become programmatic was the airline industry in the mid-60’s through the SABRE platform developed for American Airlines initially by IBM, followed by the financial services industry on Wall Street in the late 80’s to mid 1990’s. In both of these precursors to the advertising industry, paper and manual processes were the primary means of conducting transactions which were both inefficient and labour intensive. In each industry, the same fears that were prevalent then similarly exist today in advertising — the fear of the unknown, its implication on jobs and the uncertainty about where it could lead.

It’s Not That Complicated

While programmatic buying will have significant implications for the advertising industry, it is simply not that complicated nor something that should be feared. While there is technology at its core that facilitates the automation requiring some understanding, the concepts and processes of programmatic buying are straightforward. As an industry, we are at an inflection point where a new set of skills are needed to meet the requirements of this transformative technology; however, just as in learning a new language, with a new perspective gained what was once strange and unknown, now becomes familiar and accepted.


Originally published at digitaladlab.org.