(As posted on VideoNuze)

Go to nearly any online media conference these days, and it feels like half of the sessions inevitably touch on programmatic ad buying and selling. Programmatic ad buying technology has existed for nearly half a decade, but still, the term gets a lot of attention as if it’s the new idea. And despite all the hype and conversation, it’s pretty clear that the term itself, “programmatic,” still scares away certain folks, especially those at the ultra-premium end of our industry.

And the fact is, some of the “parties” (March Madness or not) who might benefit most from programmatic are the ones who are still most reluctant to embrace it.  At the recent IAB Annual Leadership Meeting, Carl Kalapesi, the IAB’s VP of Industry Initiatives, said that programmatic has caused “a lot of fear,” and, despite all the advantage, “most people still don’t get it.”

The solution to greater understanding and adoption of programmatic lies in breaking programmatic down into its most basic elements, according to Kalapesi. This simplification would allow the players on both the supply and demand side to appreciate its value and elegance -regardless of whether the inventory is ultra-premium like that of March Madness, or not. Really, the essence of programmatic can be distilled into three basic pillars: automation, efficacy, and data.  Who wouldn’t want to take better advantage of those things?  Let’s take a closer look at how these three pillars manifest themselves in programmatic buying and selling.

This is probably the most widely understood and appreciated piece of the programmatic value proposition. Ironically, despite being a digital medium, many digital media advertising processes are still done manually -through face-to-face meetings, paper shuffling, and old-fashioned IOs. Programmatic buying and selling automates those processes, building a connection between the buyer’s platform, where bids are made, and the seller’s, where floor prices are set on inventory.

Together, these two technology platforms communicate directly, automatically finding an acceptable price point for both parties, and completing the transaction without the need for manual interference. Many can see the future here, with Mark Thompson, the president and CEO of The New York Times, recently declaring, in a well-publicized observation, “everything that can be transacted and delivered by machine will be.”

Efficacy follows closely in line after automation.  With much less time spent on negotiations and insertion orders, both parties quickly realize both efficiency and efficacy.  Automation frees up a lot of time previously devoted to manual processes but it also brings added efficiency to the allocation of an ad budget. Programmatic insures that dollars deployed are deployed in the right direction – to a stated target audience – and not more haphazardly in places where advertisers hope their audiences reside.

The traditional way of buying ads forces advertisers to buy blocks of inventory on a domain or network. Inevitably, some of these impressions were wasted on buyers who aren’t interested in the product. Programmatic allows buyers to buy on an impression-by-impression basis, zeroing in on their very best customer prospects. As a result, this level of precision results in more of an ad spend targeted to actual customers – driving both increased awareness and engagement -and ultimately a more efficient and effective ad buy.

Of course, all of the above can only happen when you have the right data on hand – and that data needs to be both accessible and malleable.  In order to buy on an impression-by-impression basis, advertisers need some method for differentiating the impressions to more effectively reach desired audiences.  Programmatic buying uses data on both the demand and supply side to match the most appropriate marketer with the most relevant user.  This is perhaps the most valuable component of programmatic. And marketers can leverage a variety of data sources, including their own data and/or third party data, to help better refine targeting within their platform.

If the industry views programmatic as a combination of these three components, it seems inevitable that more and more buyers and sellers will fearlessly join the programmatic party – and in turn contribute to the overall efficacy of the marketplace.  Every day, more and more premium publishers are de-emphasizing their direct sales staffs and jumping in with two feet.  Imagine a March where not just the teams win – advertisers and publishers do too. That’s a March Madness bet worth making.

– See more at: http://www.videonuze.com/perspective/is-it-finally-time-for-programmatic-to-join-the-march-madness-party-#sthash.ycHWhYVB.dpuf