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The Power of Programmatic

Posted on 7.20.2015

A new report from the Boston Consulting Group (BCG) suggests that publishers leveraging programmatic advertising are at an advantage.

According to The Programmatic Path to Profit for Publishers report, many publishers still treat programmatic sales as a lower priority, with less than 25 percent of publishers regularly translating data analysis into sales initiatives. That said, those that are embracing this opportunity and deploying technology to operate more efficiently are increasing revenues and establishing a foundation for a sustained competitive advantage.

The data also found that less than 25 percent of programmatic team time is spent on value-creating activities, and that publishers are not leveraging the full range of technology tools that can increase programmatic sales and profit margins.

"It's clear that publishers that lack a coherent cross-channel strategy, including an aggressive programmatic capability, leave money on the table today and risk loss of revenue, commoditization of inventory, and lower market share in the future," said Paul Zwillenberg, a BCG partner and coauthor of the report. "On the other hand, those that position themselves to deliver value to their advertisers in the programmatic market will both increase revenues in the near term and have a big and growing advantage over their competitors as the digital market grows and evolves."

The report found that outperforming companies employ well-defined approaches to achieve their success and are more likely to deploy a cross-channel, data-driven strategy that encompasses both traditional direct and programmatic sales and is tailored to the publisher’s market position. What’s more, these companies understand which advertisers value which inventory and audiences, and are leveraging technology and data to match audiences to buyers and achieve higher prices. Outperforming companies also tend to realign their organizations and incentives to support a cross-channel strategy and programmatic sales goals.

"Programmatic is no longer limited to desktop display; it is fast gaining traction in mobile and video," said Benjamin Fes, managing director, partner business solutions EMEA, at Google, "Large advertisers are increasingly shifting budgets to programmatic, including branding budgets, as more premium inventory becomes available and marketers gain confidence in the benefits, especially as they realize the richness of data available. 'Programmatic guaranteed' will accelerate this shift even further."

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