Ad Technology

Why Programmatic is a caged disruption!

Date: January 16, 2019

Every advertising or technology conference you go has few buzzwords going around them. These buzzwords or jargons are thrown around in company portfolios, pavilions and even in event titles. Big executives emphasize their keynotes around these words and try to garner accolades from the jargon hungry audience who’s only motivation is to network and find a vendor who can give them better CPM! That’s the harsh truth!

Let me also remind you that these buzzwords keep changing. A decade ago it was ‘RTB or Real Time Bidding‘, a decade before that it ‘Ad exchanges‘ and from the past 4 years, it’s ‘Programmatic‘. Yes! You heard that correctly. Every media and advertising executive today is crazy about this buzzword which is basically a new way to buy media and nothing more. Programmatic is just a workflow where the advertiser and buyer engage in buying and selling with full transparency and in an automated manner. Nothing more, Nothing less!

If this is so simple, then why such a hue and cry? Why is everybody crazy about it? To answer this question, I’ll have to put up another reason one as to why Programmatic will not succeed in it’s current form?

Simply put – Programmatic is only for publishers with millions of impressions and advertisers with million in budget. Only a handful of companies on the advertiser side or agencies, use programmatic to buy inventory for their clients. This is done through various demand side platforms that have sprung up in the recent years. These demand side platform charge hefty fees; which only these agencies are able to pay because their advertisers are fortune 500 companies.

On the other hand, publishers with million of impressions can engage in this programmatic game because they can somehow manage to eek out a margin after subtracting the overhead of a sales team from the revenue they generate from programmatic deals. This margin can be less or more but nevertheless, all direct campaigns which relied on manual reporting and trafficking are now automated thus giving more transparency to the advertiser.

With only few hundred publishers and advertisers engaged in this programmatic showdown, the ecosystem will never spread and will saturate in the coming years. To make things easy – the target audience of the programmatic solution is very less and hence after a few years, supply will equal demand. When this happens, people will start losing interest in this. This small size of audience keeps the programmatic bird from spreading it’s wings and thus it never evolves. If this bird is allowed to venture into every corner of the publisher world, it’ll evolve and it’ll prosper. Here’s how:

Google launched Adsense 15 years ago as a solution for people to monetize their website traffic. It now serves millions of website and is a bread and butter for many people. If Google would have kept Adsense limited to few agencies and publisher, they would have never explored it’s true potential. They now have Adsense for video, Auto ads and what not. In some cases, adsense offers better revenue than most established ad networks.

Same way, if programmatic is kept away from masses, it’ll never flourish and evolve into a solution. If things keep going this way, it’ll always remain a Jargon; only worth of articles and conferences.

Now back to answering the first question “Why everybody is crazy about it”.

Because the everybody are a few number of people in select agencies and publishers! And that’s just it! Many in the technology world don’t even know about the word “Programmatic” because these things never go out to the masses. Only a person who has worked in this industry will know about it, rest will simply say “What?”.

So before be build more conferences around this word, the bigger question that we need to ask ourselves and the tech leaders is “What is being done to bring this technology to the masses?”. This is very important because if this question isn’t answered, programmatic will only remain as caged bird that’ll be replaced with another jargon in the next decade.

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