Finding more efficient and automated ways to target consumers online and improve digital media planning and buying has become the holy grail for many in the ad industry.
This computer-based, data-driven model, dubbed programmatic trading, has been a big growth area. Many publishers say that the automation helps them quickly, and cheaply, understand their readers.
However, there is now an argument that it is being overused; just because it’s available doesn’t mean the technology should be used on every platform.
"In the programmatic space, audience has historically won over environment"Harriet Perry, general manager at Accuen UK
The fear is that programmatic could be having a negative impact on news publishers, as inventory is treated as part of a commodity audience buy, and driving down prices.
The latest Advertising Association/Warc report shows that news brands’ digital revenue growth is slowing and is failing to offset an accelerating decline in print. Total ad revenue for news brands fell by 11% to £1.2bn in 2015, according to Warc. Print ad revenues dropped by 13.4% to £1bn and digital adspend rose by 2.5% to £220m.
James McDonald, research analyst at Warc, noted: "The double-digit decline in total ad revenue last year was steeper than we had initially forecast, owing largely to weaker-than-expected digital growth.
"Indeed, total digital ad revenues for national news brands were seen to contract in the fourth quarter of 2015 – the first recorded instance."
Johnston Press is one publisher that saw digital ad revenues increase at a slower rate last year: rising 12.4% to £30.6m year on year. It was up 20% in 2014.
"Programmatic is the intelligent use of technology and data to make the buying and selling of media better"Dominic Williams, chief trading officer at Amplifi
Harriet Perry, general manager at Accuen UK, Omnicom Media Group’s programmatic specialist, says that news brands have been working hard to make sure programmatic is a success for them.
"In the programmatic space, audience has historically won over environment," she concedes. "But news publishers have been working hard to redesign their sites to give advertisers access to better quality, more viewable and impactful placements."
Dominic Williams, chief trading officer at Amplifi, agrees: "Programmatic is the intelligent use of technology and data to make the buying and selling of media better. It’s how all media will be transacted in the future. Programmatic isn’t just about selling remnant space through cheap real-time bidding, it’s now much more about premium inventory, and publishers that leverage programmatic in the right way will reap the benefits."
But, for some publishers, the jury is still out.
Managing director, commercial, ESI Media
"Automation allows us to forge deeper relationships with our customers. It opens up a much wider universe of demand than we can effectively reach manually. There are questions around cannibalisation and yield reduction but this stimulates the need to innovate."
Head of strategic solutions, RadiumOne
"It’s not harming them if they utilise it in the right way. The key to success requires strong yield management to ensure that space is sold at its true value, while ensuring the end-user experience isn’t compromised."
Head of programmatic operations, US, Financial Times
"Not for publishers who treat programmatic as just another way to sell their quality inventory. In 2016, the FT raised programmatic floor prices to match direct rates. Programmatic yield is now on par with direct and, in turn, programmatic revenue has doubled."
Group marketing director, Trinity Mirror
"The delivery of ads via automation is a more efficient way of clever targeting. But using programmatic as a term to infer sophisticated buying to disguise bundling low quality inventory is not good for news publishers, clients or the industry."