Blog | November 5, 2013

Mad Men versus Math Men: Programmatic Buying Discussions Encouraged by the DPAA

In an industry where location is the new cookie, the 2013 Digital Place-based Advertising Association’s Summit, Video Everywhere, was perfectly suited to its locale. Home to Madison Avenue and Wall Street, New York is notorious for its avid advertisers and nimble number crunchers, and the DPAA brought both groups together to engage in much-needed conversation regarding programmatic media buying and its influence on the future of digital place-based media.
As more advertising dollars flow into digital, an increased amount of ad buying is being done by algorithms and big data. Yet with greater spending come questions about online ad effectiveness and even the legitimacy of ad positions and playback. A shocking fifty percent of online advertisements are not seen (Adweek) and one quarter of the online ad market is fraudulent (Adweek/The Wall Street Journal). These findings represent a big opportunity for the digital place-based sector to boast about how its legitimate ads are always above the fold, enabling a greater opportunity to collect impressions from viewers in a mode of continuous partial attention.
Regardless of these benefits, advertisers still have difficulty when it comes to the numerical side of digital place-based. If a planner doesn’t understand the medium or the buyer doesn’t have the right tools, digital place-based will be omitted from the plan and purchase. To relieve agencies and networks of this pain point, programmatic buying has entered the scene.
Jim Harris, CEO of The Wall Street Journal Office Network and moderator of the Summit’s programmatic buying panel, defined programmatic as transactions between media buyers and owners through new technologies to improve discovery, negotiation and workflow. He then opened up the conversation by disclosing that global ad revenue from programmatic ad buys will reach $12 billion this year (Magna Global) and in the United States, will grow from $7.4 billion to $17 billion in 2017, representing 83% of American display-related digital media spending.
The DPAA has been hard at work over the past year in the attempt to facilitate digital place-based ad buying through multi-network sales. The association’s recently announced pilot program for the Tri State Ford Dealers in New York, New Jersey and Connecticut generated increased reach, ease and efficiencies in the planning and execution of the ten network campaign, and significant improvement in upper-funnel metrics were evident after only two weeks (Phoenix Marketing International).
The idea of one-stop shopping is appealing to many but some oppose the commoditization process in fear of the “race to the bottom CPM” seen in online display advertising. Michael Provenzano, Co-Founder of Vistar Media and participant in the panel, was quick to note that digital place-based is completely different from online, given that networks have a finite amount of brand-safe inventory. Chris Paul, General Manager of Vivaki’s trading desk, Audience on Demand, supported this perspective by adding that many low CPMs account for inventory that goes unseen or is fraudulent, and all players in the digital place-based space must be educated on this from the get-go.
Programmatic media buying adds a highly scaled and complementary form of communication to any sector. While many believe it will bring more money to the digital place-based channel, it appears that both programmatic and direct modes of buying will be in place for years to come. If Madison Avenue and Wall Street can thrive in the same city, I’m sure the same goes for the Mad and Math Men inhabiting the world of digital place-based media.