Although adoption rates for programmatic advertising have lagged behind the U.S. market, a drastic increase in demand has led to rapid growth in the UK market.
According to TubeMogul, a UK video ad tech outfit, demand for programmatic has increased 40 percent from Q1 to Q4 this year. Not only that, but the company has also recorded a 20 percent increase in CPM prices.
So, considering the recent uptick in programmatic adoption and innovation, what lies ahead for the advertising industry in the UK? And where are the best opportunities emerging for advertisers and marketers?
The Growing Programmatic Landscape
There are a number of reasons why programmatic advertising is gaining traction so quickly.
In terms of media sales, it has transformed the way transactions are made.
At optimum, it gives media sellers the chance to identify and develop more creative strategies that grow new business.
However, according to a recent study by Unruly, only 43 percent of UK marketers report even just “some” level of comfort executing programmatic campaigns, which goes to show just how much unrealized potential lingers for ad sales automation in the marketplace.
On the other hand, demand for programmatic has also risen so dramatically because it is a long-awaited solution for media buyers when it comes to inventory pricing structures, audience targeting and reporting capabilities. This rings especially true for brands investing in TV and video advertising.
Programmatic TV & Video
The aforementioned Unruly study uncovered an interesting trend emerging between TV and online video ads. Over the next 12 months, three-quarters of senior marketers plan to reallocate more of their ad budget for online video to programmatic. What’s more, two-thirds of marketers said that they have already shifted a portion of their ad budget from TV to online video in the past year.
The driving forces behind this shift to digital are twofold. First, programmatic is more established in the digital realm. Second, audience data and reach are more tangible and trackable through digital channels.
As programmatic TV advertising evolves in the UK market, new opportunities for growth will emerge. Media sellers that capitalize on programmatic TV opportunities early will have a significant advantage in the industry. Why?
There is more time (and less pressure) to develop, test and optimize programmatic platforms and processes.
There are currently 9 percent of UK marketers buying TV advertisements programmatically. As this trend grows, advertisers able to drive results and market the
data capabilities of this model will be well-positioned in the marketplace.
With the help of audience data, TV ad inventory that has traditionally been undersold or undervalued has the potential to fetch higher prices from brands looking to target niche demographics.
Another automation model still in the early phases of adoption is programmatic audio. As you may have heard, Xaxis recently partnered with Global Radio to introduce Xaxis Audio after 24 months of research and planning.
According to Nicolas Bidon, managing director of Xaxis UK, programmatic audio “is a new way to reach audiences as scale.” He envisions this new media planning model being used as a complement to current strategies and not a standalone option.
Although, Xaxis Audio is the UK’s first programmatic platform for digital audio advertising, it doesn’t have to be the only one. In this case, early adopters have an even better opportunity than they do with programmatic TV, especially when it comes to product visibility and industry-leading innovation.
How do you feel about the new push for programmatic? What trend do you think will come across the pond next? Tell us your thoughts by tweeting @SalesIntelUK with the hashtag #ProgrammaticOpps!