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What’s in a name? The ad industry debates “programmatic” versus “automation”

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What’s in a name? The ad industry debates “programmatic” versus “automation”

According to [1] eMarketer, four out of every five dollars spent on display advertising in the U.S. this year will transact programmatically. That amounts to almost $33 billion in ad spend.

But ironically, programmatic is still the source of significant confusion among marketers. In fact, if you ask ten marketers what “programmatic” is, chances are you’ll get ten different responses.

The Interactive Advertising Bureau (IAB), aware of this, has decided to take action. It recently called for [2] the industry to move beyond the term programmatic. Instead, it wants “to shift the industry from discussions about ‘programmatic’ to ‘automation.’”

According to the IAB:

The term ‘programmatic’ has become ambiguous shorthand for some or all of a diverse range of platforms, tools, and processes in digital advertising. Now that automation via software and data has become the de facto means of executing digital and disruptive to most industries – understanding and evolving the roles and utility of each component involved in automation is critical to ensuring an effective marketplace.

In a report entitled An Evolving Framework for Advertising Automation, which is available for download [3], the IAB outlines the buying and selling processes and tasks that automation impacts, and describes the platforms and data services that advertising automation relies on.

It also details concepts that the IAB believes are critical to pay attention to as automation evolves. These include transparency, data quality, inventory quality, brand safety, ad effectiveness and marketing intelligence, user experience, and organization alignment and staffing.

For instance, when addressing brand safety [4], which has emerged as one of the biggest concerns among media buyers, the IAB report notes that technologies and strategies being used to determine whether ad inventory is brand safe include “verification platforms to evaluate inventory via pre-bid signals [and] an emphasis on continuous whitelisting of trusted publishers and blacklisting of bad actors.”

It also notes the significant traction that private marketplaces are gaining and points readers to two IAB documents that address private marketplace structures.

But perhaps the most valuable component of the IAB’s report is a chart that details the five steps of the automation lifecycle – plan, decision, transact, deliver, and optimize.

The industry responds

Not surprisingly, industry insiders were quick to weigh in with their thoughts about the IAB’s move. Some saw it as a potentially positive.

“Automated ad buying is a little more straightforward, a little easier to understand, and has the great advantage of being accurate: you are automating the sale and/or purchase of ad space,” Tune mobile economist John Koetsier told AdAge [5]. “Of course, not everything is automated, and there are generally rules to contain the automation within boundaries that are acceptable to publishers and advertisers, but it is accurate.”

“In fairness, this is the IAB’s first attempt at getting its arms around the subject,” Michael Connolly, CEO of adtech firm Sonobi, added. “It created a unified lexicon of sorts, which is filled with colorful flowcharts and some terminology that is even new to this reporter. All this was done in an attempt to educate marketers about what the technology can achieve, and how to properly use it, something many feel is lacking.”

But there was also a considerable amount of skepticism.

Susan Bidel, a senior analyst at Forrester, suggested that the IAB’s timing was problematic.

“Just when people were beginning to coalesce around the meaning of programmatic, we’re going to change it?” she told AdAge. “The way it’s used now, programmatic means the application of data to the purchase of media. The word ‘automation’ doesn’t begin to cover that complexity.”

Others were even more critical.

“Changing the name is like painting over a moldy wall,” Jessica Barrett, global head of programmatic for the Financial Times, stated. “You can call programmatic whatever you want, but it will continue to be clunky and manual unless buyers and sellers start using it correctly.”

Language is important, but…

Ultimately, language is important but skeptics like Barrett have a point. After all, if the industry simply swaps programmatic for automation, it realistically won’t resolve all of the issues that have plagued programmatic, including the confusion about the processes and technologies that are required to make it work.

That said, the IAB isn’t merely trying to rebrand programmatic. Instead, it’s aiming to bring clarity to a part of the digital advertising ecosystem that has been the source of much confusion by offering a framework that organizations can use to evaluate how automation is impacting media buying and selling.

Whether the framework will actually help advance the conversation around this brave new advertising ecosystem remains to be seen, but given that what the industry currently calls programmatic is still the source of so much confusion despite the fact that it accounts for the majority of ad spend suggests that the time is right for the industry to rethink how it talks about the technologies, processes and strategies that now dominate how ads are bought and sold.

Related reading

References

  1. ^ According to (www.emarketer.com)
  2. ^ called for (www.iab.com)
  3. ^ available for download (www.iab.com)
  4. ^ brand safety (www.clickz.com)
  5. ^ told AdAge (adage.com)
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