Programmatic: All Grown Up Now?

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Programmatic All Grown Up NowIf it’s all the same to you, I suggest we agree to write off the first five years of the programmatic era.   I mean, let’s face it:  these first few years haven’t been all that flattering.  It’s been a half-decade of adolescent excess, exaggerated fame, reckless experimentation and more than a little danger.  Who knew the B in RTB stood for “Bieber?”

Before all my Prog friends start hating, let me say what I’ve said all along:  Programmatic is not a phase and it’s not optional; it’s absolutely a hard trend that will reshape the entire business of marketing.  That it’s so fundamental and serious is all the more reason we’ll look back on these early years the way we look back at 80s haircuts and the contents of our old mixtapes.

This week’s Drift is proudly underwritten by Bionic Advertising Systems, an advertising technology company focused on delivering innovative software that streamlines and automates media workflow for marketers, their advertising agencies, and publishers.

When Programmatic first came on the scene, we went through a period of wild, unmitigated excitement… even though most of us couldn’t fully understand what we were so excited about.  All we knew was that anybody who could spell “RTB” got a spot on the LUMAscape and a pot of gold at the end of the journey. Call this period “RTBieberFever.”

After elation there is always backlash.  And so there was.   The technology and business was harder than we’d been led to believe, the revenues more sluggish and unpredictable.  We all learned to say “Programmatic is about more than RTB” but most of us weren’t really sure what to say next….beyond blurting out song titles like “private exchange” and “programmatic direct.”

Finally, of course, there was trouble with the law.  The exchanges became our own version of Dade County, filled with non-viewable and fraudulent impressions and – no doubt –sketchy guys on broadband houseboats jobbing the system.  Suddenly Programmatic was on trial in the media.

But I’m happy to say the story has a happy, if decidedly more boring, ending.  While technically complex, Programmatic was always a very simple idea at heart:  If you just agree that (1) two terminals will ultimately make an electronic trade of inventory for dollars and that (2) the decision to buy (and/or which creative to place) will be influenced by first or third party data, then congratulations…you’ve just defined Programmatic.  Everything else was about specific strategies, tactics and channels.  And that’s where the grownups come in.

Last week’s announcement that Group M will no longer buy on open exchanges — choosing instead to pursue private exchange relationships with publishers – is just the latest sign that Programmatic is settling in and becoming part of the background music.  In the three to five years ahead, I predict that Programmatic specialists on both sides of the table will fade away; that more than 90% of all online ad transactions will be executed programmatically;  that programmatic trading and buying will become vastly de-centralized; and that the word Programmatic itself will fall out of use.

It won’t be as exciting as RTBieberFever, but it will end up being a whole lot more important.

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