Commentary
In Programmatic, Less Is Now More
- by Tyler Loechner , Staff Writer @mp_tyler, May 29, 2015
The juiciest bit of Magna
Global’s latest programmatic advertising report is undoubtedly the
projection that programmatic TV will account for 17% of television ad budgets, or $10 billion, by 2019, but it’s far from the only tidbit of information.
One of the underlying themes of the report: The arms race ad tech platforms have taken up against one another in a bid to offer marketers the best one stop shop on the block. This chest-thumping match has in turn influenced what marketers look for in tech partners, suggests Magna.
“Services that support the greatest number of formats and devices will be prioritized over specialized offerings,” says Magna.
This “streamlining” is one of the major programmatic trends of 2015, says Magna. By turning toward “streamlined” offerings, marketers are taking the less is more approach with their platform providers.
So in programmatic, less is becoming more. Being able to do more with less is one of the reasons Verizon bought AOL for $4.4 billion. AOL knew this, and was able to eke out a few extra hundred million from the deal because of it.
But a side effect of this streamlining is that the shape of the market will change. In early January, Brian Wieser, senior analyst at Pivotal Research, predicted that 2015 would be a banner year for some but a "painful" year for others. This is a sentiment we're now hearing more often.
"There will be winners and losers in programmatic," said Bill Lederer, an active media and marketing consultant and former founder and CEO of independent trading desk MediaCrossing, in a recent conversation with Real-Time Daily.
In its report, Magna writes: “The largest consolidated ad tech majors will thrive in this environment, as will small start-ups that handle new ancillary service offerings. Mid-sized specialized firms will struggle.”
Tyler Loechner is a MediaPost Reporter covering real-time, programmatic, RTB and more. You can reach Tyler at tyler@mediapost.com.
The drive among ad tech vendors to be the preferred service provider, and lock in clients for long term commitments, will require the vendors to constantly innovate and enhance their systems, rapidly, accurately (few or no bugs, no omitted features,) while making the systems as easy as possible for the end users. The vendors that don't will lose clients to those that do. Welcome to the world of agile, accurate development processes and delivery that matches promises to clients.