Programmatic Beyond Advertising: A Not-So-Distant Future

Could "programmatic" technology used in online advertising also be used to automate and personalize the distribution of cultural and editorial content?

Programmatic is part of the rapid growth that is currently being seen in the online advertising market. In 2014, this sector was reported to have generated more advertising revenue than all other traditional forms of sales and purchases of display related advertising. This data comes from the Interactive Advertising Bureau’s first study looking at the American programmatics market, conducted for PricewaterhouseCoopers (PWC) in the United States.

The programmatic advertising revenue market is reported to have reached 10.1 billion dollars in 2014 in the U.S., i.e., 52% of all online banner ads and approximately 20% of all ad revenues generated on the Internet (a $49.5 billion market for our neighbours to the south).

What is programmatic advertising? It doesn’t refer to a particular ad format (display, search-related, video, etc.), but rather to the way the ad is transacted between buyers and holders of advertising inventory, and how, ultimately, it is delivered to the user.

Programmatic is therefore more specifically a technological revolution that eliminates friction between buyers and sellers, improves ad targeting and allows for better efficiency and optimization in real time (namely due to real-time bidding, RTB).

 

PWC, IAB Programmatic Revenue Report 2014 Results

As this table shows, the entire chain, from verification of available inventory to content delivery, is deployed in less than 1 second on these so-called Ad Exchange platforms.

Buyers are demanding programmatic to increase their access to a broader range of inventory and deeper data, which will enable improved targeting and relevancy, resulting in greater response and /or improved ad campaign results. Programmatic tools will also enable the ad buyers to adjust ad campaigns on a real time basis and with increased buying efficiencies.

— PWC, IAB Programmatic Revenue Report 2014 Results

Most of the revenue from programmatic is currently generated in the online advertising market, but the television advertising market is becoming increasingly interested in these new methods.

Here too, the effect sought is better ad targeting, improved efficiency and the hope for better performance, specifically through the acquisition of highly targeted audience data, made possible through such an automated distribution method.

As Digiday explains, “rather than relying on ratings for specific shows or channels, marketers can use programmatic tech to reach a more specific subset of [TV] consumers, like men with a $50,000 income who own an Android device.”

And what if programmatic could be used for content other than advertising?

If we extend this thinking (and our imagination) a little further to consider the possible emergence of a new distribution method for cultural or editorial content based on programmatic logic and methods, we could ask whether these new “programmatic” models could be applied to the automated distribution of film and television content based on audiences and their data.

Based on this logic, “programmatic content distribution” could be imagined as a flow in which the data collected from users would trigger an automated rights transaction and content delivery process between right-holders and broadcasters. The final result would be the broadcasting of content corresponding to the preferences of the targeted user.

Moreover, it would be possible to monetize this video content by attaching superimposed or pre-roll ads to it, as commonly seen on video aggregation platforms.

This valuable collection of user data and preferences for viewing a movie or television show could be done on a voluntary basis; for example, users would simply answer a few questions on their mood, the type of movie or series, and the desired language and duration so that the platform can preselect and “program” content that meets their criteria.

But we know that the Web, which is very advanced in big data collection, is already capable of gathering this data using algorithms. Users’ actions on a given site—the keywords they search for, the links they click on, their daily search history—can indicate to the platforms what type of content they are likely to be interested in.

The essence of the programmatic distribution mechanism would therefore be as a recommendation super-engine, more sophisticated than that currently found on various platforms. At least that’s the “wildest dreams” of Cristos Goodrow, Engineering Director for YouTube Search and Discovery: “for every human being on earth, there’s 100 hours of Youtube that they would love to watch.”

Can it really come to that? We know it could: the audience has already taken charge of part of the “programming” by deciding when and where it consumes content. Moreover, consumption behaviours and preferences have never been as fragmented and personalized.

There is such a variety of niches and segments—to borrow the terms of the industry—among audiences and users today that it has become difficult for content programmers (television broadcasters or other publishers) to decide what, when and where a viewer is likely to watch a program.

In addition, the growing use of algorithms and recommendation engines, in particular by social media, but also by Amazon and Netflix, is making users more and more used to a logic by which content is “pushed” on them.

The dynamic of “pull content,” which strongly characterized the Web of the 2000s, today is shifting towards a “push” dynamic specific to an Internet of Things and a Web dominated by social media. In short, it would not be surprising if, in the current context of hyper-abundance of content, users—who are already inundated—would now prefer to receive recommendations, by curation or by social and algorithmic suggestion, for content that is likely to be of interest to them.

Lastly, automatization and disintermediation in the content ecosystem are growing rapidly. As we mention in the update of our 2015 KeyTrends Report, the transition to digital has also meant optimizing services, rationalizing processes, introducing organizational efficiencies and cutting back on middlemen.

Aggregation platforms such as YouTube, Vimeo and Dailymotion are doing essentially the same thing in the audiovisual world. They automate delivery and distribution while facilitating monetization, where applicable, through transactional, subscription or advertising models. Moreover, new platforms such as RightsTrade and FADEL currently provide virtual marketplaces for rights transactions related to film and television content.

Given all of this, would it not seem that there is only one step left to take to include the entire chain, from access to catalogues to broadcasting, in a process that is entirely automatic and possibly carried out in real time?

A future that is closer than we think

While programmatic advertising platforms already exist, for example SpotXchange, OpenX, Google DoubleClick or the Canadian advertising network CPM.tc, technological solutions providing programmatics for content other than advertising are more rare. Their emergence, however, is very real, and certain companies are already paving the way for the automated world of distribution in real time.

One of these companies is Mediabong, which specializes in video formats that are closer to branded content than traditional ad formats. Another is Digiteka, which, according to our research, is one of the only companies to offer editorial-type video content placement on over 400 media sites.

 

 

Still many obstacles to overcome

The recent study by PWC sheds light on the critical factors and conditions necessary for wider adoption of programmatic technologies and their application to premium video content libraries that could, in the future, extend beyond the realm of the advertising market.

The study indicates, among other things, that:

  • programmatic remains complex for both buyers and sellers, who must demystify these methods and ensure that they correspond to their media placement strategy;

  • we must continue to build the industry’s trust in these new methods, particularly with regard to inventory buyers, who want to ensure that their content (advertising or otherwise) is properly placed and delivered to the target audience and consumer;

  • we must increase the deployment efficiency of programmatic placement and distribution methods on all platforms and devices, especially mobile;

  • several publishers and content platforms (in particular those with a media inventory) must adapt their platform to accommodate programmatic-type placement.

There is therefore still a ways to go and a lot of educating to be done, both by buyers and sellers, before programmatic transactional methods and delivery technologies can be applied to cultural or editorial content.

This being said, in this virtual world where automatization is gaining ground on a daily basis, where users are more and more inclined to receive recommendations and be “pushed” content that is likely to be of interest to them, and where companies such as Digiteka are successfully testing boundaries by combining programmatic technology with premium content, it seems that programmatic content distribution could be considered an “adjacent possible,” as defined by author Steve Johnson in his popular book Where Good Ideas Come From: A Natural History of Innovation.

The future is never too far off…

Posted in: Food for Thought



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