Changing the Channel: Why Programmatic Isn't Ready to Deliver What Brand Marketers Want
Posted in: UncategorizedWhen Ad Age recently reported that Procter & Gamble plans to buy 70-75% of its U.S. digital media using programmatic ad tech by the end of this year, I couldn’t help but wonder: Is this a good way for the largest advertiser in the U.S. to spend a nearly $2 billion budget?
But the news just reflects what most industry insiders already know — that the digital advertising industry is headed towards a programmatic world. And I can’t completely knock it, because I understand that there is a place and value for programmatic ad buys. Automated auctions and other elements can improve efficiency for advertisers, deliver big reach, achieve direct response marketing objectives and offer a rock-bottom ad rate.
It makes perfect sense for performance-based categories such as online retail to shift the majority of their digital ad budgets to programmatic, because such companies are predominately direct-response advertisers focused on customer acquisition. This means they’ve hit their sweet spot when they can pay inexpensive prices and optimize with algorithms to win customers at a high volume. It’s merely a numbers game.
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