Programmatic advertising and Death of Large Ad Agencies

/ October 10, 2017/ Advertising, Advice, digital, Microtargeting, Social Media, Strategy/ 2 comments

Programmatic advertising may spell the death of the large ad agency and not just the creative part of an agency, but media buying as well. There has always been the fear of automation, of having an intelligent machine, or program, take over the role of making something that humans used to do before. It has happened in many industries, the car manufacturing industry for one. In fact, in recent times you can create beautiful artwork by just entering a few parameters into an app. The creative industry was shaken to its core when algorithms started creating images that look just as stunning as those created by a human.

So what is programmatic advertising anyway?

a flow chart showing how Programmatic Advertising works.

Graphic Credit: Marin Software

Simply put programmatic advertising is essentially taking the job of buying advertising from a human team and letting the computer handle it. Using the click habits of users and math, the machine can now serve up an ad that the user will have a higher chance to click.

Local Media buyers, are you scared yet?

Don’t be, not yet anyway. Programmatic ad buying works well in large scale markets with lots of variables and in highly competitive regions. If you are thinking of paying someone to serve you with programmatic advertising with promises of “increased CTRs” and “laser focused targeting” be very careful what you are getting into. You may be able to have a skilled media planner do the work for less.

“My 2c on it is that if you’re in the US sure, it makes loads of sense. But locally, we’ve gotten better results manually” – Facebook comment


So will this spell the end of agencies who rely on media spend? Probably not. In the short term-you will find that as a Marketing Manager you might get more bang for your buck letting the machine do all the work.  The systems will get smarter. Give the app a budget and click “Serve ads the best way for me” and you might see conversions.

Don’t get cocky

A computerized system may not be able to solve all your marketing problems, however. There are many factors to consider. If you are going to engage third party to provide this service you must be able to test and measure its success. To make sure that the campaign is working requires knowledge about “how it works”.

A photo of Trump Digital Strategist Brad Parscale in hotel lobby.

Brad Parscale. Image via Buzzfeed

CBS 60 Minutes’ reported on Brad Parscale, the digital director of Trump’s Presidential campaign. He has be lauded as a critical factor in the president’s election. This 15 minute interview will show you the power of programmatic advertising. Mr Parscale served up hundreds of thousands of ads predominantly on Facebook and micro targeted them using a programmatic system to convince fence sitters and disgruntled Hillary Clinton supporters to vote for Donald Trump.

This is debatable. A Facebook advertising campaign may have influenced people to vote for the Donald, but we will never know. Its difficult to measure something like a vote in an election when there is no data. There is no data that links the programmatic advertising campaign to an individual, or even a group’s vote. It will be interesting to see what Mr Parscale says when he is asked to produce evidence of his claims.

Does Microtargeting Work?

If it makes you money you can certainly argue that “it works”. But you have to have the data. In smaller markets like Trinidad & Tobago and the Caribbean, microtargeting using programmatic advertising may be akin to swatting a fly with an Elephant. You may not be investing your money wisely. Also, Facebook and Google utilises a type microtargeting already and will improve their systems in the near future. So don’t run home in despair thinking your job is on the line. But keep your eye on the trends.

If you’d like further information or would like to share your own learnings please comment below or get in touch and let’s influence some sales today.

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  1. Ian as I see it there is still plenty of room for an agency that can add value in the area of strategy. Too many of our brands and businesses are not differentiated.
    We jump to tactics without agreeing on the positioning that the tactic must deliver. So we end up with everyone looking the same and chasing the digital flavor of the month.
    This creates huge opportunity for brands to take the road less travelled. Any agency that can help with this will keep getting invited to the party.

    1. I totally agree Dennis. I saw the CBS report on Sunday and was intrigued that a lot was being made about “Programmatic” being the “new” thing that is being touted as “swaying public opinion.” In our local market there are a lot more ingredients that make a great campaign than “just” a machine doing automatic advertising. Thanks for the comment!

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