Programmatic Ads Are Radically Reshaping Media – Here's What That Means

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Ever since the first computers, there have always been ghosts in the machine.

- Will Smith as Detective Del Spooner, I Robot

Surely, this has happened to you: You checked out a pair of shoes online, and suddenly - there it was in your Facebook news feed. That's programmatic marketing. Or, you're a mom and you bought a new stroller at Babies 'R Us and now you see an ad for birth announcements from a company like Shutterfly. That's programmatic marketing. It's matching your buying and shopping behavior with relevant content, in real-time. Media buying and advertising may never be the same.

Right message, right place, right time (RMRPRT) is not a new concept, but programmatic marketing is suddenly putting RMRPRT in the bullseye. This ability to target consumers and deliver ultra customized content - in real-time - is the next big thing and its growing rapidly.

From the brand perspective, it's a highly effective way to engage the audience at all stages of their purchasing funnel. Granted, it's machine-driven and data dependent, but the beauty is that it can perform in real-time with laser focus, over and over again. And this new digital media buying is saving money big time. So much so that AOL conducted its first programmatic upfront last year at the beginning of Advertising Week in New York. And Yahoo is making announcements in this area as well.

What does this mean for traditional media companies producing content? As digital media buying evolves, it's clear that the opportunities are splitting into two streams - there's programmatic, which is the machine-driven method, and there's still the highly customized content-integration method. Traditional media companies producing content would continue to work with agencies to develop campaigns on a broader brand canvas and promote custom content through appropriate channels.

Does this mean the data scientists have taken over? Is this the Revenge of the Nerds? Not exactly, but brands are beginning to realize "We need to harness our own data!" To do that, brands are starting to do their own data analysis in-house to inform their strategies. As Kevin Terrell, VP, ecommerce, Sur La Table says, "We're looking at trends to understand where things are heading, but we have lots of data coming from lots of systems and it doesn't always match. So the analysis we put together needs to have four attributes. It needs to be focused, it needs to be actionable, it needs to be manageable and it needs to be enlightening. That's what I call FAME."

Agencies would do well to become a partner to brands in this new quest for actionable data around their advertising. That means many agencies are going to need to re-orient their cultures around new alliance between creative and technology that looks very different from their legacy.

Brands are headed in this direction - with or without their agency on board. A new CMO Club poll (conducted in October 2013) reports "many brands are indeed considering working outside their agency relationships when it comes to programmatic media buying. The poll, which surveyed 600 CMOs, found that nearly half of brands are planning to evaluate working directly with demand side ad buying platforms, or DSPs, and another 15.4 percent are already doing so."

Here's what that means for people in the business of media:

· Brands are realizing there's gold in their own data and they intend to forge closer contact with their customers' purchasing intent

· Programmatic marketing is a way to make that happen

· Content needs to be relevant AND in the right place at the right time on the right device

· Custom content still has a key place and will require sophisticated strategies to stand out

· Agencies need to continue to bring the 'big idea' but make sure it's backed up with data analysis

After all, customers are depositing more and more personal data online and are expecting ultra-customized experiences in exchange from their favorite brands. In fact, we could see a new customer loyalty dynamic emerge as the tables are turned and the customer rewards the brand for serving up relevant content, quickly, and in the right place at the right time on the right device with repeat business.

Beverly Macy is author, educator, and thought leader in social and digital business and a frequent contributor to Say Daily . She is also the author of The Power of Real-Time Social Media Marketing and the host of Social Media Radio .