If you missed it, Facebook’s relaunch of Atlas, the ad server it bought from Microsoft last year, is big news.
It will enable marketers to apply the targeting capabilities they use in their Facebook campaigns to advertising across devices and publishers. By applying Facebook’s ubiquitous identity system and its wealth of user data to the broader the digital ad market, Facebook has taken its next step in a long-rumored broader strategic move toward offering a full-fledged programmatic media platform that would include its own Demand-Side Platform, or DSP, to automate ad buying across networks and exchanges. This would mean a more-direct challenge to Google’s current programmatic ad platform supremacy.
The announcement kicked off an Advertising Week in NYC dominated by the hype-peaking term “programmatic.” Interpublic’s Magna Global stoked the frenzy by predicting that programmatic media investments will rise 50% this year, to $21 billion, a number that was picked up by AdAge and The Wall Street Journal. Presenters at Ad Week have been offering a fusillade of staggering growth charts. NBCUniversal jumped on board with the launch of its own private programmatic ad marketplace, NBCUx, that gives preferred advertisers automated access to its digital display, mobile and video inventory. And Rubicon Project promoted a new relationship with Publicis Groupe’s DigitasLBi which will adopt its Buyer Cloud Platform, in which it says its seeing tremendous growth in programmatic premium sales. Programmatic is clearly no longer a back-water for auctioning unsold ads.
Which begs a frequently-asked question: what, exactly, is programmatic? Gartner defines “programmatic media” as
“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.”
This allows for some leeway to accommodate improvements in transactional automation that do not necessarily require real-time decisions, but the concept has its roots in real-time bidding. This requires that an ad sale and insertion decision is made as close to exposure as possible — in the display world, this means in the 200 milliseconds or so between a page request and its appearance on the screen. Mobile and video have slightly longer lead times, but some of the techniques we now see under the heading of “programmatic direct” include things like Deal ID, a sort of hybrid direct sales insertion order ID that usually requires considerably more manual processing than you might expect for a “programmatic” technique.
The bottom line is that whatever “programmatic” becomes, it still has some technical kinks to work out before it reaches its plateau of productivity. What has changed, however, is now everyone, including big publishers, seem to be pulling for it to revolutionize the business. Publishers now see a future where using programmatic to automate direct sales leads to more, rather than less, revenue. They’ve generally gotten over equating “programmatic” with “remnant” (and other, even worse, words), and some realize that auctions can even drive up the price of scarce inventory.
Which brings us back to Facebook and its market-wide targeting play. The most frequent question I heard about the social network’s entry into the fast-moving world of targeted digital advertising is, will the marketplace at large be OK with Facebook adopting a role of universal cross-device identity-based data broker for marketers and publishers? Can anyone stop them? Google built its ad network primarily on contextual targeting – the use of its search prowess to understand the meaning of content and serve relevant ads accordingly. Facebook’s prowess is its knowledge of people…will that be enough to steal the crown?