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Is Programmatic Direct a gateway to Real-time bidding?

Posted 31 Aug 2015 real-time bidding

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For advertisers who have tried programmatic direct and seen promising results, it makes sense to then try out real-time bidding. But what actually is Programmatic Direct? Essentially it is the use of programmatic technology to automate the buying of ad space (inventory).

This method of programmatic buying is becoming more commonplace, and eMarketer has predicted that the annual spend on programmatic direct will jump from $1B to $8B by 2017. This may come as a surprise to some of you, given that programmatic direct technology is not really cutting edge and has been around for some time now. In fact, programmatic direct, as far as technology is concerned, is old news when compared to Real-time bidding, and so it is interesting to note its recent surge in popularity. What could explain this trend? To comprehensively answer this question, and understand why this is positive news for the real-time bidding market, it’s important to get a snapshot perspective of the current media buying landscape. 

Getting over your Programmatic uncertainties

While it’s true that real-time bidding and its uptake has seen a positive trend in general, many advertisers are yet to put their faith into this type of programmatic buying. Recent studies carried out by the Association of National Advertisers showed that nearly a third of advertisers were still not completely clear on the process, functionality and purpose of programmatic buying. Another quarter of those surveyed admitted to having a limited understanding of the various forms of programmatic buying, including real-time bidding, and needed more guidance on the practical application of these digital marketing technologies to their product campaigns. Finally, and perhaps most critically, up to 15% had never even heard of programmatic advertising at all, let alone real-time bidding.

It’s worth noting that the survey was carried out more than a year ago, during which time many advertisers may have educated themselves on the process and relevance of the different programmatic marketing strategies. In today’s marketing landscape, the overwhelming majority (except for a few stragglers still stuck in the past) acknowledge that programmatic buying and real-time bidding on ad inventory is the way of the future. Despite this glaringly obvious shift that is, and has been, taking place for a number of years, particularly with major brands, there are a handful of marketers holding onto their marketing dollars and dedicating them to more traditional forms of digital marketing. Some might just need more education on programmatic to get the confidence to invest their budgets, whereas others might be under the misguided impression that real-time bidding is limited to direct-response marketing campaigns, which is not at all the case but we’ll save that one for another article.

Enter, Programmatic Direct and Real-time bidding

No longer do marketers need to be concerning themselves with Request for Proposals (RFPs) when it comes to integrating Programmatic into their marketing strategy for 2015. If you’re not looking to rush into this new and exciting way of marketing, try out Programmatic Direct as a first step. And if you’re intimidated by the general oversupply of acronyms that make programmatic seem, well, just too confusing, then programmatic direct might be an appropriate first step, since it allows you to enter the automated marketing space without having to take a crash-course in real-time bidding. With programmatic direct, the campaign can be run by the marketer (not that this is always the best approach) who might wish to retain a level of autonomy, control and transparency about the amount they are spending, and where their marketing dollars are going, i.e. which ads are being served, and at what cost?

What will this mean for real-time bidding?

How will the increasingly popularity of programmatic direct impact the real-time bidding landscape? Naturally, advertisers who engage programmatic technology, be it programmatic direct or otherwise, will at some stage become familiar with real-time bidding. In other words, programmatic direct can be seen as a gateway or first step into the ever-expanding world of programmatic. So while programmatic direct offers a certain degree of advertising efficiency, it pales by comparison to the efficiency of real-time bidding, since bidding on each impression is essentially the most optimal way of bidding currently available.

This trend is not a rule of thumb and shouldn’t be thought of as such. Going straight into real-time bidding without first trying programmatic direct is not unusual by any stretch. As confidence in the potential of programmatic marketing continues to grow, more advertisers are redirecting their marketing budgets into real-time bidding techniques as an entry into programmatic.

Next steps

Whether you’re new to programmatic advertising, have previously run a campaign using programmatic methods, or are well versed in the capabilities of this new and dynamic technology, there is little doubt surrounding the relevance of programmatic in the years to come. For more information, or assistance in launching your own programmatic campaign, whether using real-time bidding or some other method, Benchmarketing can assist. Give us a call on 1300 049 498 to chat more about your goals for 2015!

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