Based on a research initiative commissioned by The 4A’s and conducted by The 614 Group, “The Future of Programmatic and Automation” shows that the future of programmatic is hindered by a lack of automation. Based on one-on-one interviews with nearly 50 industry leaders and a survey of more than 200 respondents representing agencies, marketers, publishers, and platforms, the findings show that the goals of the ecosystem are, in fact, attainable with
- more automation;
- higher quality data;
- better education about the cost-value relationships of investments in data, technology, and talent; and
- focusing on the challenges and priorities that the ecosystem as a whole deems important.
In addition, the research examined both in-housing and the role of the advertising agency of today and tomorrow.
While 62% of all respondents agreed that programmatic is the underpinning technology of the future of marketing and advertising, 59.4% of respondents said the top benefit of the technology is to simply find cost-efficient audiences in biddable marketplaces. And while 77.2% of all executives said they dream of cross-device campaigns via the technology, the result implies that this is not where the focus of the efforts in programmatic are being spent.
Programmatic is all about data. Despite data-quality concerns, the strongly and widely held belief that data-driven marketing is the future is dominant in the interviews. We heard specifically that “environments that have data that comes back that’s been treated or processed or is old. The data signal we use can be corrupted.” More than three quarters of respondents (78.5%) deemed investments in first-party data to be of high value to the success of their respective businesses.
The survey showed that nearly three-fifths (58%) of respondents see attracting and retaining the right talent as the biggest challenge to in-housing programmatic capabilities. In addition, more than half (53.9%) view the main benefit of in-housing to be marketer control of first-party data. More than two fifths (41.1%) say they believe in-house talent will not keep up with the latest developments in ad tech: not a surprising result, given the concerns about attracting and retaining the right talent.
“Wrapped up in these results are significant implications for the future as agencies consider business models and partnerships with the marketing community,” said Marla Kaplowitz, President and CEO of the 4A’s. “They need to consider how they make investments and how they partner with agencies. Terms like ‘in-housing’ are often used without a thorough understanding of the work and the value of agency partnerships. This research allows key constituents in the industry to better understand the future needs while evolving to consider the best way to collaborate, create new capabilities, and grow their business.”
The research examined the understanding of the concept of the so-called tech tax and uncovered an emerging value-based conversation. The qualitative research found a sense of greater understanding of the costs of doing business in the age of programmatic advertising, particularly among marketers and agencies. The quantitative research measured the value associated with investments in technology, talent, measurement, and data: More than 50% of respondents said they place a high value on paying for things like first-party data, attribution, data scientists, brand safety tools, viewability measurement, and analytics software.
“Too many people have focused on the wrong parts of the cost equation, and not looked at the valuable pieces,” said Rob Rasko, CEO of The 614 Group. “There are parts of the supply chain that need to be fixed. However, let’s make sure we understand the valuable pieces, too, without making a blanket statement or throwing out a term like ‘tech tax.’”
When asked to choose the top priority for advertising and marketing automation in the next three years, respondents selected two options at statistically equal levels:
- a fully automated methodology for flagging inventory based on predetermined audience and ROI criteria, and
- higher levels of automation to enable optimized activation across all marketing touchpoints.
These concepts could drive future-focused applications such as data-informed creativity, which elevates personalization and creative insights beyond what today’s tools can offer, such as Dynamic Creative Optimization (DCO) and accentuates what lies within traditional creative efforts.