During a frigid week last November, the Association of National Advertisers (ANA) surveyed 349 members and announced its Word of the Year. It also released some pretty amusing member comments about this word:
“It has been the focus of every meeting and every conference I have attended, even the ones it wasn’t the focus of.”
“Nobody can define it, but everybody wants it.”
Like Hadoop and sex in (my) high school, this Word of the Year seems to be a thing we all talk about a lot more than we do it. But what is it? First, here’s the word:
Saw that one coming, huh? Well, you would have if you’d been studying recent Nostradamus-like blog posts by Gartner’s Andrew Frank and myself. Live blogging from this year’s AdWeek event in NYC, Andrew noted that Interpublic’s Magna Global predicted a 50% increase in programmatic media investment this year. Meanwhile, I pointed out that the number of AdWeek sessions with the word “Programmatic” in their title went from zero in 2012 to thirteen this year.
And Google Trends points out that searches for programmatic advertising and programmatic buying have spiked alarmingly in recent months:
So the ANA isn’t the only posse declaring 2014 the “Year of Programmatic.” Sadly, the unison chorale stops here. In a study released earlier this year, the ANA revealed that over 40% of marketers admit they “don’t have a clue” what programmatic actually means. The other 60% can stop reading now.
Still with me? I thought so. Herewith I offer to you, as a public service, a clear, straightforward, unambiguous definition of the word “Programmatic.” It is based on quotations from thought leaders in the digital marketing space (identified by their organizations at the time of the quote), enhanced with my own questions.
WHAT IS ‘PROGRAMMATIC’?
“The application of data, intelligence and technology in order to automate the ability to identify relevant consumers and deliver highly relevant messaging.” – CMO Council
SO IT’S AN APPLICATION? WHAT KIND OF APPLICATION?
“Automated buying, machine-based buying, programmatic buying. Call it what you may . . . .” – Google
CAN YOU BE MORE VAGUE?
“Programmatic is a catchall term that many people are using to categorize everything from behavioral and intent-based targeting to real-time bidding and exchange-based buying of inventory.” – NBCUniversal
HOW ABOUT MORE SPECIFIC?
“Programmatic advertising is using data to make decisions about what ads to buy, and being able to do that in real time is an added benefit.” – DataXu
WHAT ARE THE BENEFITS?
“The ad buying technique offers buyers and sellers a way to reduce transaction costs and allows marketers to use consumer data to better target their customers, which improves the efficiency of ad campaigns.” – Wall Street Journal (“CMO Today”)
SO IT MAKES THINGS CHEAPER?
“Many people believe programmatic is simply a race to the bottom — in other words, an attempt simply to drive CPMs as low as possible.” – Google
IF THE ADS AREN’T CHEAPER, WHAT IS?
“Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. Humans get sick, need to sleep and come to work hungover. Machines do not.” – Digiday
SO WE CAN AXE THE MEDIA TEAM?
“Although ‘programmatic’ suggests little or no human intervention, algorithmic optimization can only do so much.” – Infectious Media
“Generally, programmatic buying is similar to programmatic stock trading insofar as buying happens as the result of a computational proxy bidding on behalf of human masters.” – Rocket Fuel
“But programmatic buying simply means machines talking to each other through APIs.” – iSocket
WHAT ARE THESE MACHINES SAYING?
“Programmatic advertising is the automation of the buying and selling of desktop display, video, FBX, and mobile ads using real-time bidding.” – RadiumOne
SO ‘PROGRAMMATIC’ IS THE SAME AS ‘REAL-TIME BIDDING’?
“Programmatic’s overarching problem is that too many people assume it’s synonymous with loosely controlled auction-style bidding.” – Ad Age
“There has been confusion in the marketplace over terminology, with a number of terms being used interchangeably, such as ‘programmatic,’ ‘RTB,’ ‘programmatic direct,’ ‘programmatic premium,’ ‘programmatic guaranteed,’ ‘automation,’ ‘e-business,’ and more.” – Interactive Advertising Bureau (IAB)
BUT WHAT IS IT?
“Programmatic buying, in which automated trading systems are used to purchase a target audience rather than a specific ad placement at a specific time, is about exploiting a brief time window to get someone’s attention.” – BlueLink Marketing
“Programmatic buying is the gluten of advertising.” – Jimmy Kimmel
All clear? Again, you are welcome, friends. For the record, here is Gartner’s own definition of the ANA’s Word of the Year:
“Services that automate, optimize and analyze the buying of slots for ad placement, often spanning multiple marketplaces. Programmatic media includes elements such as demand-side platforms, data management platforms and real-time bidding exchanges for display, mobile and video.”