Programmatic ad buying: let the technology choose
As companies cut spending on traditional advertising in a Covid-hit marketplace, expect to see a surge in the use of software to buy digital advertising. But there are concerns about its effectiveness and about the possibility of fraud
Programmatic ad buying — the use of software to buy digital advertising — is set to accelerate exponentially in the local market this year. This is driven in part by the growth of online commerce and media consumption as SA approaches having been under pandemic lockdown for a year.
"Covid-19 has created immense constraints on consumer demand and, in response, brands will be looking to get more value for a far reduced spend," Brave Group chief future officer Musa Kalenga tells the FM. "This is where programmatic [buying] can be advantageous, as it is all about improving cost and resource efficiency."
Joe Steyn-Begley from digital agency Mark 1 says: "Most, if not all, major brands have adopted programmatic buying in some way, shape or form over the past few years, so it’s safe to say the adoption growth has reached its peak. But programmatic spend will continue to rise as budgets shift from traditional media."
A key trend, Steyn-Begley says, will be for marketers to take on their own programmatic buying in-house. "While this shift is happening globally, several local brands have already started to make the move or are discussing plans to do so. This is across all digital media buying, with paid social and search advertising normally the first channels that brands take ownership of."
Steyn-Begley has just become MD of Carbon 1, born out of Mark 1 to advise on best-in-class technologies to automate marketing and advertising processes.
Chris Botha, group MD of Park Advertising, which owns The MediaShop and Meta Media, says programmatic advertising has three key advantages: a guaranteed audience at a biddable and competitive price, access to data that can be extracted from the purchase and the acknowledged performance the media platform delivers.
"Programmatic advertising holds all platforms accountable from a price benchmarking perspective, which means that the value of the buy continues to deliver. Then, as these platforms become more data-rich and intelligent, we find the click-through rates improve as the systems learn. In this way the quality of the audience also improves."
According to Statista’s "Digital Advertising Report 2020", 79% of digital ads in SA were generated by programmatic buying in 2019. This number is expected to reach 83% in 2024. Kalenga agrees that programmatic ad buying offers huge advantages, including more transparency and control, real-time measurement, and better, greater and increased audience reach. In SA there are 36.54-million internet users, according to DataReportal.
But there is also a case for "let the buyer beware". Says Steyn-Begley: "As with the growth of most industries, the rise of programmatic advertising has also led to nefarious players coming into the fray. Globally there are major concerns about ad fraud and it has led advertisers to raise questions about whether their ads are being viewed by real people."
Apart from the concerns about ad fraud, brands should also be aware of the issue of viewability — when ads are served but not in view of the user.
Botha says more and more agencies are engaging with tech companies and media houses to set up private marketplace deals where programmatic buying is done but within a smaller, more controlled bouquet of content. This offers all the price, data and performance benefits but with none of the nasty downsides of swimming in the open ocean of the internet.
So how is success measured?
Kalenga says brands need to monitor a concept called CPM (cost per mile, which measures the actual viewing of a campaign), as well as an overall saving on budget.
Steyn-Begley says: "This is based on the goals of the advertiser, whether it is purely cost per click, engagement or actual costs per acquisition."
Kalenga says retail brands transitioning into e-commerce will get huge value from programmatic advertising as they run multiple campaigns across different target audiences for a plethora of products and services at any given time.
Steyn-Begley believes Vodacom has shown notable success in the programmatic space. "It was the first mover locally to take all its digital media buying, including programmatic ads, in-house. It has also been able to develop strategies that incorporate its first-party audience data and use more personalised creative solutions. It was the first brand locally to deploy a fully fledged programmatic out-of-home campaign."
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