When brand money goes programmatic

Mats Persson, COO at Adform, one of the world's largest ad tech company based in Denmark, has more than 20 years of experience in the media and IT industry. In his observation, digital advertising, especially mobile, is lacking creativity, the one thing that brand advertisers are increasingly betting on. He encourages online publishers to take a more active role in the digital advertising ecosystem: “When the brand money goes programmatic the publishers need to step up.” And this will be his key message to the audience of the media trends conference SEMPL in November.

What is the hottest topic in the online advertising industry at this moment?

I think two things will prevail in the online advertising industry in the second half of this year. The first thing is that ‘big data’ is out, ‘actionable data’ is in. Even if we have trillions of cookies and data, they don’t mean anything, if we don’t do something with them. And the industry is struggling to get something sensible out of it.

The second hot topic is fraud. A non-human interaction has been mostly seen as an US problem, maybe because the programmatic advertising took off earlier there, but now there is going to be a discussion in Europe as well. If you have all these data and cannot do anything about it because it is generated by non-human interaction that is not relevant data.

We are hearing a lot about how technology rules and drives the advertising world. On the other hand there are many experts who claim that technology with its advanced advertising solutions means nothing without creativity. What is your opinion about the matter?

Creativity is definitely lacking in the online world. Just take a look upon mobile. We are facing the same situation as in the time when online advertising just started and advertisers simply took offline formats and put them into the web browser. They just mimicked the offline world, which was a big failure, of course. But now we are moving into mobile where we are doing the same thing. We are taking the online, the desktop formats, and squeezing them into mobile. Who can even see these tiny ads positioned at the bottom of the small mobile screen? During my presentations I often ask people if anyone remembers a super advanced mobile campaign. No one answers.

But when the brand money comes into play, creativity is definitely what you need, and that is what I will be speaking about at SEMPL. Brand companies are used to buy media space, TV for example, and know when and where to place their ads to get most of the attention.  Now when their money has moved online they will be more demands for creativity and attention. Consequently, I think we will see fewer advertisements, but they will be more intrusive, there will be more takeovers and videos you’ll have to look upon. And I can already see that some publishers are actually removing some of their ad space because it looks, like someone said, like a NASCAR racing car with hundreds of tiny stickers no one can see.

So, creativity is definitely an important part of the equation, otherwise it won’t work.

As you have mentioned, you will be speaking about bringing brand advertising into the programmatic era. What does programmatic era bring? What is so special about it?

The special about it is that it is about a huge amount of money. I will give some examples of big companies, such as Mondelez, that are deciding to spend half of their marketing budgets for online advertising. And they don’t even sell anything online, they are doing it for branding. So, there is another dimension of money coming into this industry.

Previously, there has been a huge growth in the online business, but with brand advertising it is again coming from low volumes into something bigger. Either it’s been online companies like Zalando or any other online company like Amazon, they have been spending money on branding which will cause a shift in marketing. And that will require some changes for publishers. Brand advertisers don’t accept ads, which are not shown, they want to have data they can work upon it.

It seems that for advertisers, RTB and programmatic buying are just additional tools or skills they should possess and control if they want to compete in the intense marketing environment. Is it really so difficult to learn and understand the basics of these new tech solutions?

There is a current struggle in the industry for media agencies that are going into programmatic advertising when they try to explain to their clients what are the benefits of programmatic. What the advertisers want is reach and frequency; this is their main concern. As a marketer you want to reach out to your audience with a certain frequency. You don’t want to bombard your audience with thousands of messages; you want to reach out to them in a limited way. And programmatic in its theory is very well suited for that. I like to say that what can be digitalized, will be digitalized – it is our reality.

Do you think that RTB and programmatic buying will develop further and achieve a higher proportion of digital advertising in Europe, too? It is predicted that in 2015 more than 60 % of display advertising in USA will be bought through programmatic buying.

No one can predict how much is going to grow. But you don’t have to be a rocket scientist to realise that it will grow. Especially when brand money comes in. The clients are doing business in a very competitive landscape and they are investing a lot in marketing. They are not interested in spending huge sums of money for something that doesn’t work. TV, for example, is still very expensive and we all know that our media consumption patterns have changed dramatically. Advertisers are interested in where consumers are spending their time and it is not TV anymore, it is online and mobile. If they can find reasons to cut TV budgets down and move this money more efficiently online, and if they have evidence that they can reach people there, they are willing to move all of it. This trend is driven by spending our time differently and the technology that can improve and make the advertisers a little bit better in what they want to achieve. Because in the end of the day, what marketer wants is to become just a little bit better.