Q&A with Sandeep Goyal and Projjol Banerjea of Mozeo
(Mozeo is a joint venture in India between Mogae Media and zeotap)
Q1: ‘Programmatic advertising’ has become a buzzword that is oft seen but rarely understood. How would you explain programmatic advertising?
SG: Programmatic advertising
is a technology-driven method of buying or selling digital advertising inventory. It allows publishers and brands to move from manually negotiated, insertion order-led, repetitive workflows to a much more streamlined and efficientprocess.
PB: There are three types of programmatic advertising: real-time bidding (RTB), where the buying and selling of ad impressions is done in real time through (typically second price) auctions that occur in the milliseconds before a webpage or an app loads and the ad is delivered, private marketplaces (PMPs), which are invite-only marketplaces that enable publishers to sell part of their inventory to select buyers through a private auction (typically using a Deal ID), and programmatic direct (also called programmatic premium), where deals are negotiated at a fixed CPM but executed programmatically. While RTB still comprises the bulk of the market, PMPs and programmatic direct are both growing very fast, especially the former.
Q2: What do buyers and sellers of advertising get out of programmatic?
SG: First and foremost, it’s scale. Trading happens via real-time auctions (the entire auction takes place in less than 100 milliseconds), not dissimilar to financial markets, and buyers have access to billions of daily bid opportunities at their fingertips.
Paradoxically, in conjunction with volume, programmatic also offers remarkable accuracy for buyers. The revolutionary aspect of programmatic buying is that it allows an advertiser to serve one specific ad to one single consumer in one single context. The impression-level data allows advertisers to analyse the efficacy with certain consumers, context and creatives, leading to a much more sophisticated strategy. It’s a phenomenal improvement over traditional buying where advertisers can only offer one generic ad to a large and diverse cohort of consumers. A corollary, of course, is that wastage is minimised –– brands only reach consumers they’re looking for and avoid paying for the wrong audience. Similarly, on the sell side, programmatic buying creates opportunities for publishers to maximise yield from their inventory.
PB: To add: There is also acute pricing efficiency since the algorithmic models behind the bidding process evaluate millions of data points to arrive at a fair price for an impression, a win-win for buyers and sellers alike. Advertisers pay the highest for consumers they’re most keen to reach. Publishers in turn benefit from greater yield (better eCPMs) than they would achieve from selling standard inventory packages.
Q3: Why does data play such a major role in programmatic advertising?
PB: Considering the vast amount of inventory transacted programmatically (more than 20 billion impressions daily just on mobile), data allows publishers to stratify their inventory to sell refined audience segments at differentiated prices as well as advertisers to define their target customers and make informed buying decisions.It’s a paradigm shift from “property”-based marketing to “people”-based marketing
e.g. rather than just delivering an ad on a certain site, app or page, advertisers can choose a relevant subset of users based solely on the goals of a specific campaign. In other words, data enables the right ad impression to be delivered to the right user at the right time in the right context.
The essential component of programmatic is the use of algorithms which consider all data points available prior to and during the bidding process.These algorithms “learn” along the way i.e. they continually (re)assess the available parameters and identify correlations between data points.In its simplest form, though, the value of the bid for an impression is based on the probability of a desired event e.g. the profile “female, mid-30s, professional” will click on the ad ‘fitness drink’ in the format ‘full-screen banner’ in the app ‘run tracker’. Further optimization might involve aiming for the lowest price for the interaction (in this case either the impression or the click) or the highest probability of a downstream event (possibly in this case that the user goes on to make a purchase of fitness drinks).
Q4: How active have brands been in adopting programmatic buying?
SG: It is important to distinguish between desktop and mobile advertising. While brands allocate a healthy share of their desktop budgets to programmatic, the data scarcity issue continues to impede mobile advertising. Even though the mobile advertising market is growing, it is still dominated by performance (user acquisition / direct response) marketing rather than brand marketing.
PB: Increasingly, brands are becoming more aware of the importance of collecting, organising and activating their own-first party data. The scepticism around automation is diminishing and the creative-oriented marketers have begun to regard automation as another weapon in their arsenal rather than a threat. Most recently, there’s been a rise of programmatic creative
where creatives are being edited mid-flight depending on how the campaign is performing i.e. rather than havingstatic assets, creativesare broken down into elements that can be automatically constructed for the specific viewer, a veritable “art meets science”.
At the same time, the growth spurt of mobile inventory in video and native formats, thanks to increasing consumption of content, has also been a big draw for brand marketers.
Q5: How would you describe the current state of programmatic in India?
SG: Programmatic hasn’t picked up pace in India yet, especially on mobile, even though consumer eyeballs continue to move to mobile and apps dominate consumer time spent. The fundamental reason is the marked scarcity of trustworthy data for targeting and measurement. This leads to imprecise and ineffective campaigns that disappoint buyers and curtail their appetite for programmatic.
Another conspicuous culprit behind sluggish programmatic adoption is that most of the premiumvideo and rich media inventory is still sold via direct channels; programmatic inventory is currently primarily comprised of lower value formats. Additionally, there are concerns around the transparency of inventory, hence the reluctance to move from direct buying to programmatic.
Programmatic is most certainly the way forward.There are many benefits for all involved – data owners, publishers, brands and agencies, not to mention users themselves. However, these challenges inhibit development.
PB: We’re actively involved with evangelising programmatic in India, including engaging with forums such as I-COM
. The goal is not simply to inform Indian marketers, but to work with them on running campaigns, sharing learnings and adopting best practices.
Q6: How could these challenges be overcome?
SG: The most important issue to tackle is data scarcity. Given the rather loose manner in which data is handled in most cases, there is unsurprising reluctance among premium data owners, such as telecom operators, to share their most precious assets. I think the key here is to build trust among themwith a strong focus on data governance.
PB: Data owners must be afforded complete control over and transparency into how their datasets are utilised. Simultaneously, thorough data de-identification (via methods such as surrogacy, clustering and redaction, among others) should be implemented to ensure consumer safety is never compromised.
, we’ve been unrelenting in our focus on building our technology and business around data security and Privacyby Design principles. In fact, we’re already certified for the new EU General Data Protection Regulation (GDPR) that comes into effect in May 2018, one of the most stringent regulations globally, and I personally went through the rigours of the Certified Information Privacy Technologist (CIPT
) qualification from the International Association of Privacy Professionals (IAPP) last year.
Our efforts have not gone unrewarded: We count three of India’s largest telecom operators among our current clients.
Q7: What incentives do data owners have to make their data available for programmatic trading?
PB: Data owners
, especially those on mobile, have a tremendous opportunity to build additional revenue streams, and that too with minimal investment. By selecting the correct partners, data owners can generate sizeable gains from their hitherto under-utilised data assets without diverting focus from their core business. In addition to telecom operators, we’re already working with a major security company, a leading navigation services provider as well as some large publishers, among others.
Q8: Is there any value in this for consumers? Any risks?
PB: Advertising supports the entire digital ecosystem and enables companies to provide consumers access to free content and services. Programmatic advertising is critical to ensuring the sustainability of this ecosystem. In particular, the availability of quality data improves digital experiences as consumers are exposed tofewer and more relevant ads.
On the privacy side,the important topics are choice, consent and communication. At the end of the day consumer data belongs to the consumer. As long as there are mechanisms in place allowing users to direct how their data is used and transparent communication regarding the usage of their data, consumers can enjoy better experiences while still retaining control. Of course, robust data securityand strict data governance are critical to ensuring consumer safety.
('Partner Content' is provided by the article's sponsor and not verified independently by Campaign India. This article is sponsored by Mozeo.)