The rise of programmatic marketing

Programmatic marketing continues to grow, and as companies adapt to the fast-changing environment this is producing, some are taking some drastic decisions, such as getting rid of their sales teams and replacing them with automated algorithmic processes.

So, are we moving inexorably toward a market in which the advertisements we receive are decided via Real Time Bidding? If the web statistics are to be believed, the answer seems to be yes: programmatic marketing has vastly improved the bottom line for companies with an advertising inventory that includes information about users, who suddenly see that advertising takes off without anybody having to sell it, and at prices much lower than the typical premium campaigns, albeit higher than non-segmented mass advertising.

Programmatic marketing’s potential is clear: it puts advertisements in front of people with the right profiles, based on their behavior and preferences. The explanation provided by a leading company such as the Interactive Advertising Bureau give an idea of the processes we’re talking about:

But beyond this potential we need to ask ourselves if programmatic marketing is really going to define the environment we want to live in. Presumably, we’d all prefer advertising adapted to our interests as much as possible and that eliminated anything that obviously isn’t going to be of interest to us, and instead was focused on products and services that we might be susceptible toward, if we haven’t already shown interest in them. But this initial response doesn’t necessarily reflect the true complexity of the subject, and nor should it be seen as an absolute truth.

Recent advances in the advertising model of some highly successful platforms, such as Snapchat, would seem to suggest the very opposite: that there is a segment of users, particularly young people, who have expressed their concern about receiving highly focused, segmented advertising based on their online profile, seeing it as the result of constant monitoring, making them feel as though they are under surveillance. Being on the receiving end of advertising all the time about a particular type of product, which is increasingly the case, and highly characteristic of poorly thought out retargeting (such as advertising about a product that we have already bought, and are now no longer interested in) is bothersome. In the post-Snowden era, this constant echo of what we have been looking at online, and increasingly, offline, is likely to have the opposite effect in terms of our receptiveness toward advertisements.

It’s clear that this kind of advertising is susceptible to misuse: reducing somebody to a few basic social and demographic profiles, as these kinds of programs do, often results in us receiving the same kinds of advertisements all the time, and is simply because of poor interpretation of the sites we have been looking at.

The outcome is that users can feel that their every movement is being tracked and sold on to advertisers interested only in accessing their profile as cheaply as possible, which is increasingly being seen by some demographic groups as little more than harassment.

At the same time, there seem to be few alternatives: the growth in programmatic advertising is the result of a kind of perfect storm bringing together media that have been struggling for years with low profits and ever-higher sales costs with advertisers looking for higher and higher conversion rates, which has led to a situation in which there are those with something that others want to buy, along with purchasing processes that set prices without any human intervention through algorithmic processes that have created what is essentially a continuous market, along with an auction on a par with the stock exchanges or commodities markets.

Escaping the clutches of such a situation seems hard indeed. But… are we really sure that users are going to be comfortable and will want to be part of an environment defined by these types of processes? Or will it produce an adverse reaction and withdrawal from the market via the use of ad-blockers? If we used to complain about non-segmented advertising and constantly receiving advertisements that were of no interest to us, are we now going to complain about the opposite, of seemingly being pursued by certain products or services that segment us to the nth degree, and that seem convinced that we must pay attention to them? Where is the balance in all this, if there is one?

(En español, aquí)