The article is an opinion piece written by Nadeesh Ramachandran, Vice President – Sales, Vserv.
I was recently at an industry event moderating a panel on the digital industry's latest buzzword – "Programmatic". This is not only highly discussed and debated, but also highly misunderstood! Unfortunately, many in our industry are yet to realize the benefits of using programmatic tech for marketing. In this article, my aim is to decode the state of programmatic in India and better understand how you and your brand can benefit from it.
Before we do that, let us consider this. Why is that the rate of adoption for programmatic in developed markets such as US or UK higher than that in India or for that matter even Southeast Asia? There still remains a lot of cloud around programmatic marketing even though all of us are aware of the benefits (on paper) which include increased transparency, desired & relevant target audience and cost effectiveness. The two broad reasons are: i. The ecosystem is still not ready for an automated way of doing business in India and ii. There is a serious dearth of talent which truly understands the "how" of programmatic.
Programmatic still to see 2.0
According to the latest CISCO-VNI report, 55% of the overall mobile traffic came from mobile videos in 2015. Video-based content has progressively grown and has now become the preferred medium for mobile users. However, the inventory and demand for video ads through programmatic buying is currently small. Unfortunately, programmatic buying is largely used for the more traditional banner ads and pre-roll video ads. Its use must be upgraded to include buying of newer ad formats such as video and native ads. Video and native are the wave of the future and unless there is a both the supply and demand side ecosystems start aggressively pushing for programmatic on them, movement will continue to be slow.
Programmatic playing second fiddle
Though Programmatic offers more control and transparency, many publishers in India still prefer to transact through direct/fixed deals for premium inventories as opposed to participating in an open bidding process. This behaviour is noticed because publishers have more control over the pricing & transparency even though the non-programmatic way of marketing is more tedious. While Programmatic Direct Private Marketplace (PMP) Deals do exist their usage has been extremely low as publishers are still just testing the waters. It is important for them to see the proof of the pudding in increased yield through automation as only then will they truly move to programmatic aggressively. From the buyers perspective, brands will be willing to invest more for the right audience at the right time on the right platform. This is the magic of automation.
Programmatic wears the creative hat
Over the past few decades, the advertising industry has realized that content and context wins hearts – at the center of which lies creativity. However, there is a notion that automation kills creativity and this notion has passed on for programmatic as well. In the recent past, bulk of the programmatic has been standard banners without much creativity built into it. However, the culprit was the quality of ads and not the medium – inventory bought via programmatic has immense potential. It is only this medium that gives us the opportunity to combine real-time user data along with other engaging elements to create that perfect ad unit. But the more important question to ask is - Are our creative agencies equipped to handle this change as data increasingly lies at the heart of consumer insight and creativity?
Programmatic has gained a lot of buzz and hype globally in the last few years and deservingly so. Industry estimates suggest that 50% of all digital spends are now programmatic. In India too, the adoption for programmatic will definitely increase as soon as the ecosystem welcomes it with open arms. At the same time, programmatic technology is evolving to address the needs of today's mobile marketing requirements. Just a little faith and experimentation will show instant results in your mobile marketing campaigns.
You can also read the article on Exchange4Media.