Part 1: The future of automated trading
By Rachel Taylor, Multiply* Manager, Posterscope
Will programmatic be the future? It is a question which has consumed OOH conversations throughout 2016, especially as specialist agencies look to replicate the efficiencies of the online world while still celebrating the classic practices which underpin the medium. I will consider this issue in a three part series reflecting on Mediatel’s annual automated trading event.
Part 1 discusses the importance of complexity: The future of automated trading.
Part 2 discusses metrics with: Remembering Human Logic
Part 3 discusses: The potential of automated guaranteed
This year, Mediatel’s event brought together some of the industry’s leading minds to debate the future of automated trading. It also celebrated the successes of the last year from across multiple media formats. Certainly there is a lot to celebrate, but the conference emphasised that we are still far from perfect and that the market needs to evolve its automated practices if we are to retain trust and grow in effectiveness.
The morning was broken down into three parts, two debates and an update from James Brown (MD for the UK and Nordics for the Rubicon Project) that set out automated guaranteed buying as the future of automated trading.
Here he described ‘automated guaranteed’ as an automation of the trading process that focusses on the workflow between media owners and agencies, rather than previous stages in programmatic’s development which concentrated on real time bidding or the creation of private marketplaces. Both of these factors are still tenants, however automated guaranteed is a new space where publishers can sell specific inventory in the one environment rather than through a myriad of platforms or expensive private market place deals. As a CPM ‘middle ground’, it represents a promising avenue for clients who may have been burnt by their initial exploration of programmatic buying and a way for hesitant publishers to test the space.
However, the conference also emphasised three key themes the industry needs to adopt if we are to fully embrace automation in our trading. These are complexity versus disorganisation, the need for metrics with a human touch and the interaction between data and creativity.
Complexity is the most sensitive of these issues as it impacts on client trust and without client buy in it is much harder to make changes to the industry. Catherine Becker (CEO, VCCP) pointed out that while automation can be the ‘great leveller’, particularly for digital trading as it allows smaller media owners a place in the market; the number of suppliers can be confusing for clients. This is aggravated when each player takes a small cut of the automated trading costs which quickly adds up to cast doubt on the value of automation, a particularly challenging issue when a major selling point for automation is its low cost.
Indeed, the Guardian found that when trying to buy their own inventory 70p in every £1 was lost in the supply chain. Steve Hobbs (Global Head of Media, Fetch) rightly pointed out that partners taking a share of the cost is not in itself a problem, so long as the automation process is a value chain, rather than just a supply chain. While a market flooded with an ever increasing number of players was never the idea behind simplification, so long as the layers increase the effectiveness of campaigns the ‘wastage’ merely becomes the cost of a fully valued campaign.
However, when compounded with tensions around bot views and other ad fraud, Steve Brown (MD EMEA, Double Verify) estimated that one third of advertising is lost to bot fraud, there is a very real trust issue. The lack of transparency is causing clients struggle to understand where their money is being spent and the comparative value of impressions. As a result, this level of complexity does not bode well for the future of automated trading, although there appears to be more potential if viewed, in Catherine Becker’s words, as more an issue of disorganisation.
Certainly other mediums have avoided some of these issues by actively organising at the beginning of the process. For example, OOH’s automated buying evolution has been routed in developing a collaborative approach across the market. Mugo Knott (Marketing and Insight Director, Primesight) explained that this began by establishing common standards, such as frame IDs, across the industry so media owners and agencies can speak a common language. It was reassuring to see mediums such as OOH pioneering the space by proactively learning from experiences in the digital world. Hopefully removing the disorganisation will allow traditional media move forward with automation with client confidence, while the simplifying the number of platforms used in automated guaranteed trading will help streamline the online world.
All of these thoughts appeared to point favourably towards the predominance of automated guaranteed trading but there were two other key themes which might not support the continuation of these automated processes. The next instalment in this series will tackle the question of applying human logic to automated processes.
Part 1: The future of automated trading