What's the Buzz in the Big Easy: The Challenge of Programmatic Buying - Michael Kassan

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For me, one of the best things about the 4A's annual conference is listening to and hopefully learning from whatever the big buzz is that particular year.

Certainly, the topics are diverse on each agenda, especially now that the event, like every other major annual thought-leader conclave, has expanded to include the entire advertising, media, marketing and digital technology continuum. But there's usually one macro-trend that dominates the sidebars in the hallways and the chatter in the conference rooms.

The usual suspects are local, mobile, social…and if it's appropriate to wear a summer scarf in New Orleans in spring.

This year, however, my money's on programmatic buying being the disruptive force that generates the bulk of the buzz.

The chaos real-time buying (RTB) is causing among publishers, marketers and agencies certainly fits this year's sub-theme of Transformation's Evolution. And in reviewing the critical challenges facing the buying side of the business, it seems clear that programmatic buying has opened up a whole new front in our never-ending battle to stay one step ahead of a constant-change environment.

The digital ecosystem already has compelled marketers, content creators, distributors and others to rethink every assumption and retool the conventional wisdom they have traditionally relied on. Now it's publishers' turn to rethink their business model.

Certainly, no one has been unaffected by the urgent need to understand and effectively respond to by-now familiar challenges such as emerging platforms, consumer behavior changes, and data analysis and use.

Now the pressure extends further into the sales part of the organization as the ever-growing adoption of programmatic buying changes the notion of direct selling specifically and to the entire strategic framework of media buying — and it's only just begun.

Responding to a flood of new inventory, much of it non-premium, in a digital display market that has soared from $17 billion in 2007 to an estimated $32 billion-plus in 2013, about 6 out of 10 major brand marketers now employ programmatic buying.

This year alone, eMarketer predicts growth in RTB ad spend of more than 80%. And that number is expected to soar from around $2 billion today to $7 billion annually by 2016—more than one fifth of the total online display ad market.

For publishers and buyers, RTB has implications across their selling landscape, from inventory control to establishing value.

For direct sellers, it means a new skill set must be developed – whoever can package and sell creative concepts will rise to the top. This has always been an important advantage, of course; now it figures to become arguably the most critical factor in who succeeds and who does not.

For buyers, the process of evaluating and executing buys now moves up much earlier in the cycle, causing pressure at that end of the funnel as well (not that media investment agencies needed yet another thing to keep up them up at night).

I don't think, as some have suggested, that programmatic buying will render direct selling obsolete. We all remember the frantic predictions that DVRs were going to kill advertising and digital was going to be the death of television. We know better than to heed the doomsayers by now. It's also at least a little bit ironic that digital technology is now transforming digital technology.

Clearly, though, programmatic buying is taking us on another wild ride that will rock our businesses and reset our attitudes and assumptions. We'll ride this wave out the same way we have all of the others, and those yet to come. First, we're swamped, then we resurface, and finally, we figure out how to swim in a new sea.

At the very least, we can all look forward to some particularly lively exchanges on the subject of programmatic buying in the hallways and conference rooms in New Orleans this week. I expect to participate in a few myself, and perhaps even start one or two.

Michael E. Kassan is Chairman and CEO of MediaLink, LLC, a leading Los Angeles and New York City-based advisory and business development firm that provides critical counsel and direction on issues of marketing, advertising, media, entertainment and digital technology. Michael can be reached at michael@medialinkllc.com

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