Programmatic – Its day is still to come

The B2B Barometer shows B2B marketers don’t see much value in programmatic, says Andrew Dalglish, director of Circle Research

One number in this month’s B2B Barometer report caught my eye. Almost two-thirds (64 per cent) of B2B marketers describe programmatic advertising as irrelevant. That’s striking, because an estimated 59 per cent of digital ad spend in the UK – that’s £1.8 billion – is programmatic, and next year it’s forecast to reach 70 per cent. Yet, most B2B marketers still don’t see it as relevant. Odd.

It’s strange because, if we break it down, programmatic is unarguably attractive.  Historically, digital ad space has been bought in ‘batches’ based on number of impressions, frequency of ad rotation or some other measure. The problem with this is that a) it’s time consuming doing all those deals and managing results, and b) there’s a lot of potential for wastage – even the most niche website will still have visitors that don’t fit your target audience.

Programmatic goes a long way towards addressing these issues. When landing on a web page, information about an individual user (browsing behaviour, demographics, and so on) is sent to an ad exchange. Through this exchange, advertisers bid on the user’s ‘eyeballs’ and the winning bidder’s ad is then presented. All of this happens in milliseconds using automated algorithms.   

So, programmatic is easier and more targeted. That’s got to be attractive, so why isn’t it also seen as relevant?

Well, a recent study by Appnexus identifies two key challenges hindering the wider adoption of programmatic – a lack of understanding about how to use it and a fear that ad content will end up on undesirable sites. I’d add another two reasons to this that are more specific to B2B.  Digital advertising quite simply isn’t a big area of expenditure for most B2B marketers. Last year’s B2B Barometer showed that only one-quarter allocated any budget to it and even then it only accounted for nine per cent of their total spend. Added to this is the fact that many B2B publishers don’t offer programmatic yet and, even where they do, information on their visitors may not be of much targeting value. Gender demographics, for instance, are of less relevance in B2B markets.

So, programmatic isn’t on the agenda just now, but watch this space. After all, it wasn’t long ago that social media was seen as purely the preserve of B2C marketers.