Programmatic, and especially the technical-sounding language around it can seem confusing at the best of times. Especially as the whole system is evolving all the time, and changes so quickly. At times, it can all seem too much to stay on top of.
But we’re here to argue a lot of this is in the presentation (and in the intentions of those doing the presenting.) In this article, I will try to explain four key developments in programmatic right now, plus showing they’re not that complex after all. And crucially, how they’re not all just innovation for innovation’s sake – but actually positive steps to improving advertising.
1. Header bidding
Ignore the name for a second. A better name might be ‘true yield optimisation’. In other words, the holy grail for publishers – all buyers and different types of demand competing in real-time, maximising revenue. The way it was always supposed to be.
The header is rich in data. As publisher header setups mature, they will acquire tools to visualize what is actually happening in the header auction. Who and what performs where and when. Being able to action data in your header will be increasingly valuable for premium publishers.
In terms of different approaches or integration types, server-side solutions are gaining ground and are a growing part of publishers’ revenue. Prebid.org, of which we are part, and which is the open source standard for header bidding, will fully launch and keep iterating its Server product in the upcoming quarters. And Prebid Server will play an increasingly important role in a fuller auction.
2. Auction Dynamics
As header bidding has been adopted by the majority of publishers, so began a debate around how the auctions that power programmatic should work. Essentially the accepted standard needed updating. What was once a system built on the second highest bidder winning, under the new system, first price winning made a lot more sense. This is both from a publisher revenue perspective, as well as for buyers, to avoid missing out on the right inventory.
Admittedly, discussing the inner working of auctions maybe already sounds like something that in the past would have been reserved for the IT department. But think of it this way: the ad ecosystem is your house. You don’t necessarily know the ins and outs of how the heating works. But if it breaks down, you’re certainly going to wish you did. And like your central heating, auctions are what power the whole advertising system. We spoke more about first and second price auctions here.
3. Greater Transparency
Of course, we think paying attention to how auctions work is important - and we hope after reading this, you see why. But equally, we shouldn’t lose sight of the big picture. Bottom line, for digital advertising to mature in the way we all need it to, trust and transparency are fundamental – something akin to the walls and roof of the house we live in.
Assuming we can do that – and keep our eyes on the long-term prize, what’s next?
With greater transparency, think fewer opportunities for short-term gains, at the expense of the rest of the market. So, more consolidation, fewer ‘point solutions’, and mergers between those businesses that don’t offer a complete service across all media types.
4. Measurement Grows Up
In ad tech, just as we seem to be moving towards greater clarity, with new developments all of the time helping to simplify and improve the way header bidding works, it would be a massive shame if confusion and over-complexity around auctions pulled us back again.
If on the other hand we can finally see the (ad tech) wood from the trees, we can face head on what is both the next major challenge and opportunity rolled into one.
At least in part, this is about evolving from direct response measures like CPC and CPA, to true measures of effectiveness. Whether that’s brand uplift, or another metric – we need to decide, and we need to start figuring out how digital measurement grows up.
So, those are four major trends and talking points in programmatic right now. I hope I’ve made them clearer, and they don’t all seem so confusing at all. If we can get past all the complexity in this field, and help everyone understand what is really going on – that will be half the battle won.
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