Programmatic Media in India – A Despicable Story

While globally popular for over a decade, programmatic media in India is being used only since last couple of years.

eMarketer forecasts US mobile programmatic ad spending will reach $9.33 billion this year and account for 60.5% of total US programmatic display ad spending.  At present, the programmatic buying industry is at a very nascent stage in India.

There are many companies which have started providing such services.

Key Players for Programmatic Media In India

  1. Global Leaders
    1. Publicis’s Vivaki – Audience on Demand (AOD)
    2. GroupM – Xaxis
    3. OMD-Accuen
    4. Dentsu Aegis – Amnet
    5. IPG – Cadreon
  2. DSPs & Trading Desks
    1. Sociomantic
    2. Vizury
  3. Ad Networks
    1. RevX by Komli
    2. Ybrant Digital
  4. Programmatic Ad-Tech Startups
    1. Rocketfuel
    2. Appier

Along with these, there are many US companies also which are operating remotely in India. But it still hasn’t picked up the way it should have been. It is still taking time for the marketers and agencies to understand the true benefit of DSPs and start replacing their traditional way of media buying with it.

Key Challenges for Programmatic Media In India

Revenue Forecast

Extremely difficult to project or forecast the market size for programmatic in India. A somewhat accurate guesstimate would be 10-20% of overall display spends and can go up to 50% of display by end of 2017-18.

Silo Approach By Ad Networks

Most of the companies in India providing programmatic services are currently operating in silos. The ad networks are providing very basic programmatic buys from ad exchanges, and claiming it as audience targeting. There are very few people (at both client’s and agency’s end) who actually understand audience targeting from a technology standpoint.

Limited Audience

With too many players trying to get their share in this small pie, the minimum bidding price (eCPM) in India can also go up for the same audience as not many brands are savvy reaching out to the audience outside major top 10 metros as the purchasing power or disposable income is linked to it.

Stubborn Media Planners

Programmatic’s basic DNA resides in data & technology, it is less of a media concept, and from execution standpoint, it needs more deeper understanding of technologies like Big Data Segmentation. Hence, any programmatic campaign requires handling a lot of data, analyse, create intelligent algorithms and provide meaningful insights to the advertisers. These technical experts will have to work hand in hand with the media planning teams. Media planning teams in India are too stubborn & resistant to change to this newer reality which would make the adoption for programmatic that much more difficult.

Less Confident Publishers

Major Indian publishers are often hesitant to sell their premium inventory in an open bidding process but are willing to work via private deals. Even if that requires a painful & rather long selling process of going from door to door.  Publishers have their own reasons to resist-losing control on their premium placements, earning less revenues due to RTB (real time bidding), integrating their premium inventories liked fixed buys or sponsorships.

Programmatic Rich Media

Currently, there is a massive demand for video based Rich media formats in India, whereas programmatic is still stuck on basic banner & pre-roll video based buys. Unless there is a massive upgrade in the programmatic tech, which would include the features like rich media, brand safety and premium placements, Indian brands won’t show interest in the programmatic buys.

 

4 RTB Programmatic trends for 2017

RTB Programmatic trends have fascinated one and all in the advertising world. The pace at which they’ve grown in the last 3 years have stunned even the hardest of its critics.

Programmatic is projected to touch almost 80% of total US advertising ad-buy by 2017. The programmatic adoption is lowest in china which is projected to touch only 25% by 2017.

Global Programmatic Ad Buying Share

Global Programmatic Ad Buying Share

 

Right from the start of 2014, there is a never ending debate around RTB & Programmatic in the agency corridors, and it looks like in all probability, the advertising baton would be passed on from the conventional Ad Networks to Ad Exchanges & DSPs.

Before you proceed further, you may want to watch the below video by Pete Kluge to understand this increasingly complex Display Advertising ecosystem:

A lot of analysts are calling it a victory for the advertiser who (till recently) was shooting in the dark & a large portion of his dollars were going into the black hole.

No doubt, even the research figures are also skewed in the same direction, according to e-marketer latest report, by the end of 2017, RTB & Programmatic would jointly become $7-8 Billion market which would be 30% of the overall display market in the US.

In 2014 alone, US programmatic spends have clocked over $10 billion which is a clear sign that conventional networks have their task cut out.

RTB-Programmatic-Share-US-Display-Market

The very idea of being in control of what you buy & the transparency of what you pay for is a great motivation factor for any advertiser to pump in more marketing dollars. Till recently, the client had no visibility of where their precious dollars are being spent. All they were getting was bland click thru reports at the end of the month which was far away from the actual business transaction. The ad networks were not even remotely connected to the brand’s business objective.

How does RTB & Programmatic Work?

Agency trading desks have already started to add fuel to this fire by either partnering with the leading exchanges & DSPs or creating their own private RTB-cum-Programmatic marketplace to consolidate the digital buy for all their clients. According to a report by Adage, almost 15% of the brands are already working directly with leading DSPs & another 45% in the process of building their direct relationship with a DSP partner in the near future.

Media buyers are suddenly sitting in the driver’s seat where tools available to them are becoming increasingly sophisticated that covers deep analysis around user behavioural, demographic & psycho-graphic data. The DMPs ( Also watch: Top 5 Reasons to Have a Data Management Platform ) have added more arsenal to the DSP’s bucket by providing them multi-layered audience data points. The planner who was once busy crunching tons of excel data for his client is now having a last laugh. He can virtually run all his brand campaigns sitting inside his cubicle over a cup of hot Starbucks latte. This can also cut down huge resource costs for the media companies as single person would be able to manage entire digital account from his system.

But like they say, nothing comes for free, somebody has to pay the price for this, and it looks like that for now conventional ad networks will be in the line of fire from all corners due to lack of transparency in their DNA.

Here are key RTB Programmatic Trends for 2015:

Verticalisation of the RTB

Since the beginning of our use of data platforms for buying advertising inventory, one thing which has always become a point of debate around the world, and that is how can we apply data to content strategies that go beyond traditional “advertising” and help changing customer behaviour, eventually encouraging buying behaviour. This strategy & tactics should go well beyond boxing up of some large volume of inventory, to personalised solution workflows serving to the needs of specific industry verticals.

Galactic Rise of Programmatic Video

If programmatic ad trading was the success story of 2014, next year the industry will start to see the benefits programmatic video has to offer. Programmatic advertising has experienced stellar growth for the past few years and this is expected to continue – in 2011 global RTB-based spending was $1.4 billion and this is forecast to rise by almost 60% (59.2%) to $13.9 billion by 2016 (CMO.com). Programmatic video is expected to advance equally quickly with 40% of digital video ad spend predicted to come from programmatic by 2016 (source: e-marketer).

Personalisation vs Privacy

In 2014, user privacy & general data protection have received bulk of the attention of the global law enforcement agencies (read about Data Privacy Day ). Advertisers looking for re-assurance from the Ad Exchanges & DMPs that they are not compromising on user privacy compliance of a specific geo. Major industry players (Amazon, Facebook, Yahoo, Google, etc.) that own PII and niche players that specialise in “cross-device” will debate the scale, accuracy and privacy compliance of their IDs.

Multiscreen & Cross Device efficiencies

In 2014, we saw RTB’s & Programmatic began their conversations to a lot companies in global mainstream media and new products and technologies to launch in this space over the next 12 months.

As we respond to mobile’s ability to reach consumers at unique times in unique places we will begin to see developments into how we can reach customers across multiple screens. 2015 may just be the year when Programmatic would bring its efficiencies & returns to large advertisers by allowing them to manage their entire digital media spend across platforms.