Opinion: Why Programmatic is the Future of Mobile Advertising

Opinion: Why Programmatic is the Future of Mobile Advertising The following is a guest contributed post from Or Shani, CEO and founder of Adgorithms.

With a recent boom in ad technology, many marketers are lost as to how they can use it to drive mobile campaigns. One of the strongest developments is in programmatic media buying, but the Wall Street Journal found in a recent survey that only 23 percent of Chief Marketing Officers (CMOs) understand programmatic advertising enough to use it in campaigns, and 12 percent of respondents haven’t heard of it at all. When implemented correctly, predictive programmatic media buying can get mobile marketers to their goals faster, with a better response to market dynamics and even a reduction in the incidence of ad fraud – and all without wasting valuable budget dollars on manual trial-and-error schemes.

What is programmatic advertising?

Programmatic advertising uses machine-learning technology and real-time bidding (RTB) to purchase digital ads. Online programmatic campaigns are booked, executed, analyzed and optimized via demand-side platform (DSP) or supply-side platform (SSP) interfaces and algorithms. With programmatic advertising, advertisers can set a specific budget that they are willing to spend. Some have specific requests, such as certain websites an advertiser would like to be featured on, or a certain type of audience, demographic or geo-location. In comparison to human ad buyers, programmatic methods offer an inexpensive and reliable way to buy and sell digital ads. Manual buying requires humans to combine huge amounts of data and negotiate for the best campaign results possible. And humans are also prone to mistakes, so having a machine to ensure the process goes smoothly wherever possible creates a more efficient process. It’s important to note that the biggest difference between advertising via desktop and mobile is that mobile doesn’t support cookies. This means it’s even harder to track whether ads are reaching the right customer at the right time and if they’re having a positive effect.

Is programmatic the future of ad buying?

Programmatic buying in the mobile space is on the rise. According to Smaato’s Q4 2013 Mobile RTB Insights, global spend on mobile RTB in the entirety of 2013 increased by 466 percent. And research from IDC predicts spending on mobile RTB in the U.S. will grow to $1 billion by 2015 and $3 billion by 2017.Already, a large portion of advertising is traded programmatically, and agencies and brands are eager to buy media through programmatic channels. Some have even gone as far as building in-house teams to handle the programmatic ad buying. Up until now, programmatic has been largely used for online advertising, but brands and advertisers are beginning to explore ways to bring programmatic capabilities to TV and social media platforms.

What are the benefits?

The mobile landscape is currently a very complex and granular ecosystem full of various players, apps and devices, creating an overabundance of targeting possibilities. Given these variables, programmatic buying is a natural fit for mobile advertisers, as the machine-learning algorithms that automate buying decisions only enhance performance the more data points it has to pull from. And it does so at a speed that manual campaign optimization can’t match.

Mobile advertisers using programmatic buying can target the right audience at the right time. The process delivers campaign results that are extremely targeted and at a larger scale. When combined with RTB, advertisers can leverage third-party data to automatically select and optimize their campaigns to ensure success. The best programmatic campaigns follow the consumer as he moves between channels and touchpoints within the customer lifecycle, allowing for each interaction to be predicted and informed by the next.

Programmatic advertising allows marketers to develop a strategy that best engages with its target audience. But it’s not without its challenges, as mobile is a fragmented and young industry. In traditional display advertising, the ecosystem is relatively stable with around four to seven big exchanges and sources. In mobile, there are many networks, companies and exchanges making it more difficult to work, buy and optimize campaigns. However, programmatic advertising can streamline the manual overload to make mobile ad spend more manageable. Marketers can use customer data to increase their advertisements’ effectiveness, preventing budget dollars from being wasted on consumers that have no interest in their brands or products. For consumers, programmatic buying increases the relevancy of ads that are presented to them, delivering higher quality experiences.