Programmatic splits media companies

Warc, 27 May 2014

SYDNEY: Two major Australian media companies have expressed profound differences on programmatic ads, with one describing this approach as a crude attempt at aggregation, while the other regards it as a viable means of selling premium inventory.

Speaking at the AdNews Media Sales Summit, Tony Kendall, sales director at Bauer Media, was critical of the way in which programmatic advertising often seeks to make money.

"Publishers spend an enormous amount of money creating content and marketing to get eyeballs to view that content. And the programmatic guys, all they do is aggregate the hard work everyone else does and earn on it on the way through," he said. "I think that's quite shitty in the scheme of things."

Emma-Jayne Owens, national sales director at digital media company Mi9, offered an alternative vision of programmatic buying as a premium business that promoted efficiency and reduced wastage.

But she also warned that the industry had effectively shot itself in the foot by, in its early stages, pushing programmatic as a way to manage "cheap, remnant" inventory.

"It's the low-cost RTB [real-time bidding] portion of programmatic that causes the angst around it," said Owens, as she argued that agencies must change their views, and see it as a source of premium inventory.

"The more agencies that start to think about it in that way, and demonstrate to clients that it can deliver valuable audiences that are actually at a higher price point because there is more efficiency and less wastage, is where this industry needs to head with programmatic," she concluded.

Warc has recognised the need for marketers to develop a greater understanding of programmatic if they are to fully benefit from it, and produced a new report, The Programmatic Primer, which aims to guide executives through this challenging subject.

Ted McConnell, the report's author - and who spent 15 years in charge of digital marketing innovation at Procter & Gamble - will be discussing the Primer in a free Warc webinar on June 17. Before then, readers can view free sample content from his analysis.

Data sourced from Ad News; additional content by Warc staff