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Welcome to the programmatic revolution

Up to now brands have faced great difficulty in reaching customers across devices and mediums - but with the new range of data available, real-time bidding and a programmatic approach, 2014 might be advertising's "big bang" year.

Smartphones.
Communications are thriving in the digital age. Photograph: Getty Images.

In my last piece for the NS website, I predicted that the advertising industry was headed for a Big Bang moment. This was a comparison I drew with the financial industry, where, in 1986 almost overnight the bowler hats and handshakes for completing a deal disappeared and were replaced with electronic, screen-based trading. It revolutionised the industry and properly cemented London’s position as a financial powerhouse.

The reason I think we are heading to this point, and fast, is due to the reams of data that are being produced across the web every single second. Thanks to the proliferation of smartphones, tablets and personal computers, coupled with the emergence of social networks, sharing platforms and the resilience of email, people are sharing their likes, preferences and opinions more than ever before. The web has always been social. And by this I mean the way in which content is produced, consumed and distributed across the digital world. In granular form this can mean shortened links, using widgets on pages to share information, even sending a good old fashioned email with a link in it. The human behaviour of communications is very much alive and well in the digital age.

This has created an unprecedented opportunity for marketers, who are now able to take advantage of the amount of data out there to help target consumers and find new customers in a precise and relevant way, at scale. Simply put, there are billions of sharing data points in all forms happening across all digital touchpoints.

We are however at a stage now where processing this information has to be automated. And this is why we are fast approaching a “programmatic” revolution. Technology, through sophisticated algorithms, is increasingly able to find valuable characteristics, gauge consumer behaviour and target messages with laser focus to the right audiences. It brings a previously unavailable automated intelligence to help brands target quickly enough to hit potential audiences with relevant content in a timely fashion.

Some may say “isn’t this just real-time bidding?” It’s not. The concept of “real-time bidding” has been in existence for a few years and is simply the methodology behind buying and selling advertising impressions in an open marketplace, much like an auction model. This is where brands are (allegedly) able to buy and sell online display advertising in real-time, one ad at a time and serve them to the public. However, as with most software, your desired outcome is wholly reliant on the information you put in and the way in which you use the data you have. How often have you been served an ad for a train or plane after you have made the journey? Real-time bidding is an important trading component of the marketplace but it is the marketplace as a whole that is becoming programmatic. This enables brands to aggregate, book, analyse and optimise all forms of digital content and media so they can serve targeted offers, messages, and ads across all channels. The ultimate benefit here is that marketers can identify customers in real-time, in the right place, and on the right device, to help retain or win new business.

It basically means that they are able to connect the dots between their content, their audience and their media buying; to ensure they are genuinely reaching their target audience based on their likes, preferences and behaviours right here, right now. This is a hugely powerful asset for brands.

Another reason this is going to start to address the challenges we all face is the mobile channel. Mobile advertising has struggled on two levels. Firstly, it has struggled as web advertising did in the early stages and has sadly had to adopt a clusterbomb approach with clients being measured by the number of app downloads that they are able to achieve (akin to how many likes or followers you can get - numbers with no real meaning). It’s expensive and sees little return on investment. Secondly, even though the mobile or smartphone is becoming the prime means through which people communicate today, marketers have struggled to connect with them as they move between smartphone, desktop and tablet. The programmatic marketplace will address both as it brings data and a cross platform approach, thereby enabling brands to target and connect with their next customers using tailored marketing messages. A big drive for this new paradigm will be the ability to combine the analytics of each consumer action and deliver a personalised experience to users, with intelligent software and an increasing use of cookieless targeting technology. It’s the shot in the arm that will ensure mobile continues its aggressive growth.

Brands are already turning to a programmatic approach and seeing significant returns. However, thanks to the amount of data out there and the need to integrate with mobile, 2014 promises to be the year which all channels reach a “Big Bang” moment - and you don’t want to be the brand that is left behind.

Rupert Staines is European Managing Director at RadiumOne