Why 2013 Will Be the Year of Programmatic Premium Guaranteed

©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.


Fairfax Cone, the founder of Foote, Cone and Belding, once famously remarked that the problem with the agency business was that “the inventory goes down the elevator at night.” He was talking about the people themselves. For digital media agencies that rely on 23-year-old media planners to work long hours grinding on Excel spreadsheets and managing vendors, that might be a problem.

For all of the hype and investment behind real-time bidding (RTB), the fact is that “programmatically bought” media will only account for roughly $2 billion of the anticipated $15 billion in digital display spending this year, or a little over 13 percent depending on who you believe. Even if that number were to double, the lion’s share of digital display still happens the old-fashioned way: publishers hand-sell premium guaranteed inventory to agencies.

Kawaja map companies, founded to apply data and technology to the problem of audience buying, have gotten the most ink, most venture funding, and most share-of-voice over the past five years. The amount of innovation and real technology that has been brought to bear on audience targeting and optimization has been huge, and highly valuable. Today, platforms like The Rubicon Project process over a trillion ad bids and over 100 billion ad transactions every month. Companies like AppNexus have paid down technology pipes that bring the power of extensible platform technology to large and small digital advertising businesses alike. And inventory? There are over five trillion impressions a month ready to be purchased, most of which sit in exchanges powered by just such technology.

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