Programmatic: the next frontier

Julian Mossanen, regional VP at Rubicon, on why programmatic spending is only starting to heat up.
julianMossanen

By: Julian Mossanen

TV may still hold the lion’s share of ad budgets, but not for long. Programmatic will see a 137% increase in spending this year compared to last, as roughly $10 billion more will be devoted to it in marketing budgets across the board, according to a recent study by the media agency Carat. That’s not all: In 2016, eMarketer predicts that the global mobile ad spend will top $100 billion next year.

The proliferation of smartphones and tablets combined with waning consumer attention for television have opened up endless possibilities for programmatic. The need is real, and marketers can prove it works.

The reality is that media consumption patterns are fast changing. Fewer people are watching cable. According to a new PwC report, cable subscriptions continue to drop, and many current subscribers are doubtful that they’ll remain so in the next few years. Netflix isn’t the only culprit here, though it’s certainly one of the big ones – companies like HBO and CBS have their own streaming services now, and programmatic video will make sure ads on these types of services are more effective than standard cable.

As noted above, TV isn’t the only screen marketers have to worry about. Multi-screen usage has been increasing drastically, and those under the age of 35 are much more interested in streaming from other devices, if they aren’t streaming directly to a television screen. As many as 34% are watching television on mobile devices, including both tablets and smartphones. The upside is that this younger generation is watching – wait for it – as many as 22 hours a week of video on Netflix or free online video (as well as with 8.3 hours of linear television). Something as small as a decrease in cellular data cost could cause this number to skyrocket even more, as video could be watched from any location, an immediate necessity for consumers. All of this points to a need for a smart programmatic strategy.

Video obviously isn’t the only opportunity for programmatic. Dr Pepper recently drove more than 213,000 in-store visits by using a combination of programmatic mobile and in-store activations. Being able to search and find relevant information when and where you need to is key for consumers. It’s also possible for marketers to marry in-store attribution, as more location data is made available, to ads that meet a consumers current needs.

With these various screens, advertisers are looking to add more programmatic spending to their budgets. That’s good news because tracking technologies for marketers have gotten better. New standards in regards to viewability are being rolled out. As with all new technologies, there’s an early trial and error period and a learning curve that needs vetting, but this should behoove marketers to adopt new practices in measurement instead of just overlaying traditional standards on top of different technologies.

Once measurement issues are addressed, the sky’s the limit. Which is good news because mobile has the potential to impact far more viewers than television.

Julian Mossanen is the regional VP at Rubicon, which acquired Chango in April.