Programmatic advertising will continue to dominate the digital marketing industry in 2019. This past year showed that the efficiency and effectiveness of programmatic is still king for marketing budget spend. In an outlook for next year, Tomasz Wnuk, General Manager, Middle East and Africa at RTB House explains the most important trends for programmatic marketing strategies.
Programmatic technologies improve every year by leaps and bounds—and this year was no different. The latest programmatic platforms are powered by advanced artificial intelligence (AI) and deep learning to reach users that matter most. Thanks to programmatic, brands can reach each user individually, meeting them on their terms, with a personalized message tailored around them.
The steady rise of programmatic is expected to continue. The newest Programmatic Marketing Forecast from Zenith states that this trading model will be responsible for 65% of all money spent on digital media in 2019. The industry will see a rise in value by $84bn.
Today’s demanding customers now expect ad personalization, and programmatic is a key driver to this new era of marketing success. We’re expecting the biggest programmatic digital trends of 2019 to be centered around optimization, cost-efficiency and transparency.
Fewer Ads, Optimized Efficiency
The popularity of header-bidding leads to a significant increase in bid requests volume. Publishers began to offer the same bids to multiple exchanges instead of sending out available inventory to one ad exchange at a time. As a result, many DSPs received more requests than they were able to handle, bids were duplicated, and the process of bidding became less effective. Many DSPs developed their own algorithms for supply-path optimization, to clarify the scheme of interaction with SSPs, and to sustain efficiency. There are a few ways to do this:
Some demand-side platforms pick only the most relevant bids, choosing ones with the highest probability of winning. Algorithms analyze the patterns of SSPs and win rates to evaluate the most efficient way to winning the bid.
RTB House recently designed another solution, aimed to identify the same impression on different exchanges. This method is based on a shared user identification tag between supply platforms, so that each user is always described in the same way. As a result, RTB House technology knows what is displayed to whom. These algorithms can spot duplicated bids, and immediately adjust bidding strategy. Together with the increase in user session depth, the response rate decreases. It is important to “catch” user’s attention as early in the session as possible. This unified system guarantees that instead of displaying several ads, each user is served with fewer, but personalized ads, tailored directly to their needs.
One downside for buyers in the programmatic model is that they must deal with higher prices in increasingly popular first-price auctions. They are familiar with bidding high in order to win the auction—nearly without consequences—but with first-price auctions, they are suddenly obliged to pay what was offered. To resolve this issue and find a balance between second-price and first-price models, Bid Shading finds a compromise.
With Bid Shading, buyers pay a price between the first and second bid, based on an estimation done by ad tech partner. The evaluation takes into account historical bids, similar ad placements on certain websites, and prices that lost the auction—all in order to assess how high the winning bid should be.
In this situation again, technology used by service providers can offer advantages. RTB House, to secure cost-effectiveness, uses algorithms based on deep learning that are able to recognize if the auction is first or second-price type and optimize the bidding strategy accordingly.
Transparency Breakthroughs with ads. cert
2018 was a year focused on transparency and ad fraud. One of the key solutions developed was ads.txt, where publishers could declare specific companies authorized to sell their digital inventory. A possible continuation and addendum to that is an initiative from IAB Tech called ads.cert.
The ads. cert mechanism uses digital signatures on a publisher’s site that attempts to verify legitimate or fraudulent activity. Some fraudsters imitate more valuable impressions like domain, IP address, device or position on page and wrongfully change values. The aim of ads.cert is to detect and block such manipulation. The process checks information that is passed between the buyer and seller, preventing bot manipulation and allowing buyers to verify the website's inventory.
The solution has positive outcomes for all parties involved in RTB ecosystem. It leads to more transparency and lower ad fraud activities. The only small obstacle could be the technological requirement – an infrastructure upgrade to OpenRTB 3.0. In order to maintain a strong position in the industry, companies should align with the newest standards of anti-fraud ad efforts.
What Does the Future Hold?
Programmatic will continue to see growth because the industry is still rapidly changing. There are still many ideas and technologies in development beyond our existing environment. One such area is programmatic TV, still in its infancy. For 2019, marketers should focus on technology partners that provide them advertising with safety, transparency and cost optimizations in order to make programmatic even more efficient. These initiatives are not only important for brands to gain direct returns, but to build more trust in digital marketing across their consumers.