Buzzword Binge 2014: Programmatic

Big data, omnichannel, localization, personalization and now PROGRAMMATIC. Each year (or quarter...) the digital marketing industry chooses a new favorite toy, casting the previous year's dated darling into the big colorful dropbox in the cloud. This year's new buzzword, and savior of online advertising is "programmatic" digital advertising. Like Big Data, programmatic is an idea, not a specific technology. In fact, the term "programmatic" is so vaguely defined that a quick Google search will return a series of articles all attempting to define it and differentiate the term from itself and its individual parts. Luckily, we have the IAB to provide a universally accepted definition, err... a colorful magic quadrant.

The main question that most people have about "Programmatic Advertising" is how it is any different from 2011's favorite buzzword, Real Time Bidding (RTB). IAB's magic quadrant does a fairly good job at providing the answer to this question. Like a square amongst rectangles, RTB is merely one part of a programmatic advertising strategy. In addition to open auctions, programmatic advertising also incorporates one-to-one premium inventory sales, private auctions, and wholesale fixed price. 

The digital advertising marketplace is moving towards software platforms and away from individual human sales. The various legacy processes are now automated across the inventory value spectrum, from premo grade A to remnant junk. Agencies are clearly taking note, with Magna Global predicting that 83% of advertising online will be programmatic by 2017, global agency WPP is pumping money into companies like Xaxis, and Rocket Fuel purchased X+1 and recently released an RFP for a programmatic service provider central review site and central marketplace. 

It's a good time to be the guy who thought back in 2009 that this RTB thing is pretty cool and may be applicable to other legacy sales processes in digital advertising. 

References: 

1. http://www.marketwatch.com/story/rocket-fuel-releases-programmatic-platform-request-for-proposal-rfp-template-2014-09-26-16159325

2. http://www.iab.net/media/file/IAB_Digital_Simplified_Programmatic_Sept_2013.pdf