Programmatic Has a Ways to Go to Live Up to Its Potential

4A's and The 614 Group co-author a report on ad tech

The 4A
The 4A's co-released a report called "The Future of Programmatic and Automation." - Credit by 4A's, Getty Images
Headshot of Erik Oster

Programmatic media buying is here to stay, but it will take time, and further investments, before it reaches its full potential, according to a new study by the 4A’s and The 614 Group.

According to The Future of Programmatic and Automation, one primary factor hindering programmatic is a current lack of automation. The study found that full automation is the future of programmatic and data-driven marketing, but further steps are needed to deliver on the promises for these industry-changing developments.

According to the study, 62% were in agreement that programmatic is the underpinning technology of the future of the industry; however 59.4% found the top benefit to be finding cost-efficient audiences in biddable marketplaces. This suggests that this area is where the majority where programmatic spending is devoted, despite 77.2% of executives saying they envision cross-device campaigns made possible by the technology.

The numbers indicate programmatic has a ways to go before it can deliver the full results the technology promises.

"The industry still can’t deliver hyper-relevant messages based on behavior, consumer mindsets, motivations, and need states. The power of automation in the future will create a smarter, faster, real-time ecosystem that eliminates manual work, ensures inventory hygiene, and enhances creative."
Marla Kaplowitz, president and CEO, 4A's

“Misperceptions continue among a small group—fewer than 20%—who assume programmatic is fully automated across all aspects of the ecosystem,” 4A’s president and CEO Marla Kalpowitz told Adweek.

“Automation is a distant reality. Neither data and data quality nor sophisticated automation are at the level needed to deliver on the true promise of programmatic,” she added. “The industry still can’t deliver hyper-relevant messages based on behavior, consumer mindsets, motivations and need states. The power of automation in the future will create a smarter, faster, real-time ecosystem that eliminates manual work, ensures inventory hygiene and enhances creative.”

In addition to further automation, higher quality data, better education around investments in data and technology practices and talent are needed to fully deliver on goals for programmatic in the ad ecosystem, according to the study. Quality party data will play an especially crucial role.

58% of respondents listed attracting and retaining the proper talent as the biggest challenge to in-housing programmatic capabilities. Keeping up with the latest developments in the space is also a major challenge, and 41.1% of respondents said they believe in-house talent won’t keep up with the latest developments in ad tech. Over half of respondents (53.9%) said they viewed marketer control of first-party data as the main benefit of in-housing.

“Recognizing that data quality can be a challenge, the most effective programmatic and automated advertising executions are sourced using first-party data,” Kaplowitz explained, adding that 78.5% of respondents listed first-party data investments as a top performer for business impact.

“The future of programmatic is automation, and that includes all media, especially TV,” Kaplowitz said.

Over the next few years she envisions advances in workflow technology and automation, in campaign tracking, more sophisticated algorithms, machine learning and AI, greater accuracy in identity resolution and audience delivery, data science allowing for more dynamic creative. Within five years, she anticipates TV networks will move inventory to programmatic, although likely within their own walled-gardens.

As further developments are made in tech, data and programatic, there seems to be a growing understanding of their value. The study examines the question of the concept of a tech tax and found that half of respondents reported placing high value investments in first-party data, attribution, data scientists, brand safety tools, viewability measurement and analytics software.

Kaplowitz explained that further steps toward “full transparency of the costs of deploying technology and data solutions to prevent fraud and ensure brand safety,” as well as “measure attribution and viewability” would help “focus the industry on cost-value relationships of programmatic technology and automation—tech value, not tech tax.”

The study included both one-on-one interviews with 50 industry leaders and a survey of more than 200 respondents across agency, marketers, publishing and platform backgrounds.

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@ErikDOster Erik Oster is an agencies reporter for Adweek.
Publish date: November 18, 2019 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT