No takers for programmatic buying?
The automated system of buying ads maybe the latest trend in digital marketing, but marketers and publishers are not exactly rushing to embrace the technology yet. We find out why...
Published - 25-August-2014
Programmatic buying – which Jimmy Kimmel called the 'gluten of advertising -- is the new digital marketing buzzword. But, rather like gluten, not too many people know what it is, or what it does.
An automated system of buying ads, either through real-time bids or more conventional ways, programmatic buying promises marketers more targeted ad units at a better value for money.
But with Indians used to direct selling, neither the marketer nor the publisher seems keen on an automated system. In fact, agencies we spoke to said marketers usually do not understand how programmatic buying works.
Lack of experts, expertise
“One has to actively manage the campaign because the prices keep changing. There is not enough push by clients because, obviously, most of them do not understand the concept. Also, most clients are more comfortable with fixed rates that reservation-buying allows them,” said Madan Sanglikar, Co-founder, Affle.
Hitesh Trehan, Director (Sales & New Initiatives), Networkplay, suggested that the confusion between terms like RTB (real-time bidding) and programmatic buying, etc., should be clarified. “RTB as a subset of programmatic buying, is often limited to remnant inventory, and dominated by retargeted campaigns,” he said.
There is a perception that reservation-buying allows clients to manage funds better and get a good deal. Marketers are also getting increasingly result-focused in their campaigns. For example, Sanglikar pointed out, if there is too much price fluctuation, marketing heads worry their management will think they have not planned properly.
“We have been dealing with lack of understanding from clients and publishers. The quality of inventory and support of global technology players in India is also adding to the complexities,” said Tanmay Mohanty, MD, Resultrix India.
Trehan agreed that smaller agencies might find it difficult to either invest money to develop their own bidders/DSPs (Demand Side Platform), or might not be able to spare additional personnel if they choose to work with an exiting DSP technology provider on a SaaS solution. Or they simply do not have the knowledge to take either step.
The trick, Trehan said, is for agencies to not forget that there will be additional personnel costs in any case. “Programmatic buying may not ease the process of buying, but it will add value to their product line if they can disseminate the relevant knowledge within their organisation,” he said. Sanglikar agreed that agencies and marketers who have worked on search or Facebook-based advertising will be natural fits for programmatic buying.
There is an overall lack of supporting service infrastructure within the advertiser teams, felt Diana Loriot, Commercial Director India, Sociomantic Labs. “This can make it difficult for advertisers to provide the user data needed to drive more efficient and effective programmatic campaigns. Data is of primary essence to programmatic display, because it makes it possible to better understand, predict and influence customer buying behavior,” she said.
Amit Gupta, Managing Partner, Httpool, said since programmatic buying will need to handle a lot of data, analyse it, create intelligent algorithms and provide meaningful insights to the advertisers, it will breed experts. “These experts will have to work hand in hand with the media planners. Initial dearth of such specialists will also pose a challenge,” he said.
Meeting marketer's aspirations
Introducing programmatic buying will necessitate a re-look at the way deals are brokered. Trehan says private deals between publisher and marketer/agency could still be negotiated on DSP. “In other countries publishers are often hesitant to sell their premium inventory in an open bidding process but are willing to work via private deals. To educate and convince the client to use programmatic buying might be very challenging as well,” he said.
Such expectations reflect in the type of content they expect, said Mukesh Agarwal, VP (Product Management), Komli Media. “A lot of brand marketers in India expect features like rich media, brand safety and premium placements, which are still not available in API based programmatic buys. Until programmatic moves away from plain banner-based ads and incorporates these rich features, we don’t see a lot of brand marketers adopt it,” he said.
Another issue, Gupta said, is that marketers feel unsold inventory is recycled most of the times through programmatic. It is partially true, especially in case of publisher side or Supply Side Platform (SSP).
“Publishers will have to follow mandate adapted by the advertiser, but will be slow on taking initiative to be part of programmatic platform. They have their own reasons to resist- losing control on their premium placements, earning less revenues due to RTB (real time bidding), integrating their premium inventories liked fixed buys or sponsorships,” warned Gupta.
Loriot opines agencies need to go beyond the scope of retargeting. “We have not yet seen many agencies leveraging programmatic to bring new customers to their clients’ websites via reach campaigns bought programmatically. This is a big opportunity for Indian marketers, and the early movers have an advantage,” she said.
With lack of understanding and initiative, it is critical thing for agencies and advertisers is to partner with programmatic technology vendors that have a thorough understanding of the Indian market dynamics, deep experience in programmatic buying and optimisation, and the technological and service infrastructure needed to support and manage the needs of the Indian advertiser needs, Loriot said.