March was exciting. Two ad:techs and one Programmatic I/O event later, I feel enthusiastic about how digital is going to change advertising as we know it today. And about how Equinix is going to play a huge, enabling role!
The digital advertising industry is predicted to grow at lightning speed. In Asia-Pacific specifically, this sector is evolving fast and at an inflection point where a significant shift in budget allocations will happen within the next 12 months. This shift will create new challenges and opportunities.
A key digital advertising gamechanger is programmatic buying, a relatively new trend that is already rapidly changing the landscape of digital growth. Fundamentally, programmatic buying allows the inclusion of many data sources to inform targeting and optimization decisions in an automated, real time context. Buyers can layer both third-party data, as well as advertiser first-party data, onto campaigns. It suggests that there’s little or no human intervention in the buying process.
A recent Equinix research report, ‘The Future of Digital Advertising in the Asia-Pacific‘ revealed that 49% of respondents are already using programmatic buying in some form and a further 24% of respondents indicated near-term adoption. While the report showed that only 2% of respondents currently allocate more than 20% of digital budget to programmatic platforms, it is promising to see that 52% of them are likely to allocate more than 20% by 2015.
Traditionally, programmatic was viewed as a race to the bottom, margin-wise and consequently something a lot of publishers were wary about. However, the growth potential is starting to outweigh the short-term concerns. At a recent ad:tech panel in Australia that I spoke at, featuring publishers and technology platform providers, these shifts were discussed at length. The most common sentiment from the group was that programmatic represents new opportunities and should be adopted by the industry rapidly. New business models are emerging – and ad companies are investing into people, processes and technologies.
The main advantage of programmatic buying is that it uses near-real time systems and algorithms to automate the delivery of data-driven solutions and advertising to consumers i.e. creating targeted offers and ads per individual consumer – there’s no “one ad fits all” anymore. This then has the exciting potential for marketers to, for the first time, evaluate campaign performance and make in-flight modifications to get maximum bang for the buck. A recent collaboration between Comscore and Google aims to do just that.
For this to become a reality, however, the right technology infrastructure needs to be in place to process large sets of data in real-time and connect the ecosystem in close proximity. How close? Well picture this: one second is just too long in this new paradigm!
This is where Equinix comes in, as we launched our Ad-IX ecosystem for the ad tech community early last year. It currently features over 95 ad tech companies, including Spotxchange, MediaMath, Casale Media, BrightRoll, and Rocket Fuel, which are increasingly looking to facilitate faster ad bidding and ad delivery. The platform offers direct interconnections between ad exchanges, demand side platforms (DSPs), data aggregators and all other parties involved in the ad bidding process, and helps reduce average network latency down to millisecond levels and gain more time for data analysis.
While ten, five and even two years ago, marketing and advertising would have never been associated with technology, today technology is indispensable to any media company. To remain competitive in this day and age, successful advertising firms will need to ensure data and decisions are processed and exchanged in milliseconds. Technology is at the core of their success.