The Internet of Things, the Cloud, Big Data, and the new possibilities of mobile computing are making the advertising industry more complex each and every day. These new technologies are not only changing the dynamics of how messages are delivered to the audiences and how companies are interacting and engaging with individual customers, but how advertising itself is bought and sold. Add to that demographic and generational changes in consumer’s behaviors, and we have a perfect recipe for increased complexity and confusion.
Of all these disruptions, Programmatic Buying requires special consideration. The magic of programmatic buying—the use of artificial intelligence and big data to optimize the purchase of online media inventory, typically through a Demand-side Platform (DSP) and occurring in real time—is that it not only facilitates the optimization of media buying decisions from a financial perspective, but it also gives a high degree of control of what we are buying. For example, it helps define what kind of message we should show to what kind of consumer, under what circumstance, and on what type of device.
Programmatic buying tools are powerful, offering a high level of control, automation, and performance. Some may feel that these automated tools make the agency redundant. But, didn’t people say the same when the TV was invented? But what should be the role of the agency in this new context? How can agencies add value to ever more demanding customers in an ever more complex world?
Agencies will have to provide a new, more strategic value proposition. For sure, certain mechanical and clerical activities will be displaced by the new technologies. It will make no sense for the agency or the advertisers to invest resources in tasks that can be done more quickly and more efficiently via software. Thus, agencies will become more like consulting companies. They’ll be experts in defining strategy, policies and procedures. Agencies will also have to support the implementation of programmatic platforms, training staff to make sure they can fully utilize the technology, and ultimately help advertisers measure results, optimize campaigns, and understand new opportunities for technology upgrades. As often, certain type of jobs will be lost, but they will be replaced by better paying, more strategic roles.
Agencies and advertisers will need to pay more attention to their staff hiring and development decisions. They will need to develop a full understanding of new technologies and produce consultant-type executives who can understand the advertiser’s challenge and deliver fast, cost-effective solutions.
The market will also understand that programmatic buying is not a silver bullet for productivity or efficiency. As happens with most technology, it will mean nothing if not applied correctly, and it will mean nothing if not part of a well-thought strategy. With time, programmatic buying will become a commodity, and once again agencies will differentiate themselves by what has mattered most since the early days of the industry: an integrated service offer, impeccable delivery, outstanding professional service, and trust between the advertiser and the agency. Programmatic buying will not replace the strategic role of the agency, but the agencies that are more tactical than strategic will suffer.