“Short term crisis creates long term industry innovation and enterprise value creation opportunity”

Yes, it does. I have experienced it first hand, and built a company based on this principle coming out of the internet bubble crash.

Having been through the 1987 crash (yes I am that old:). The internet bubble compounded with 911, the 2007 financial crisis, and now coronavirus pandemic. I can say with 100% confidence that in each economic downturn, new industries or disruptive innovation within industries created the next generation of leaders, and companies that built significant enterprise value. Enabled by both consumer and industry behavioral changes. Companies who identified these patterns of change and capitalized on them, became the new dominant leaders.

The consistent change agent attributes of the last 2 crisis were efficiency, accountability, and greater ROI, and are again the key drivers today.

How the bubble correction enabled the programmatic crisis opportunity

Following the pattern and value chain logic. Before the internet bubble correction, CPM based digital advertising networks dominated the online advertising industry, and experienced a severe contraction in the correction. While ad budgets continued to migrate to digital post-bubble. We saw new forms of efficient accountable advertising such as Adsense, and the PPC model rapidly emerge and dominate the industry. Followed by the disruptive innovation of the ad exchange. Which created further efficiency by aggregating all the fragmented, siloed ad networks inventory and enabling the ability to purchase more efficiently and effectively across all the networks. While at the same time creating significant remnant inventory. Which became the key innovation driver behind a new form of programmatic automation. Allowing buyers to be able to easily access all that remnant liquidity in an automated data-driven environment.

Programmatic is not only growing rapidly. It is being adopted as the defacto primary automation that drives the entire digital advertising ecosystem, and based on the above patterns repeating themselves. Is about to be catapulted to the industry’s de facto core operating system.

Programmatic growth is accelerating in the pandemic economy based on advertisers looking for more accountable, efficient and cost-effective ways to reach audiences. Consumer’s behavioral changes are accelerating advertising demand in business verticles being fueled by the crisis, as well as the accelerated consumption of digital media from social distancing and more people having to turn to online for news and entertainment.

We are seeing our Audience Cloud marketplace supply partner’s traffic rise from 72% to 300% over the last 2 weeks, and expect that trend to continue. Creating a very unique opportunity for brands and demand-side partners to transition more budget from traditional advertising channels that are contracting, to programmatic.

Based on Nielsen data from prior major crises in recent U.S. history that forced consumers to stay home, total TV usage increased by nearly 60%. We’re not there yet, but consumption is starting to climb in the most impacted markets, the firm found.

Consumer behavioral changes impact on media consumption.

Coronavirus and economic impact resources from eMarketer.

Acceleration movement of offline to online media consumption and ad spend.
The first key issue revolves around the fact that advertising spend is already shifting online from other types of media. Many analysts now agree that when marketing budgets come under pressure in a stressed economy, those sectors that can best document their
connection to ROI, such as programmatic advertising, are far more attractive to corporate chiefs than other kinds of less-trackable traditional advertising.

What is programmatic digital marketing?

Programmatic advertising is the practice of automating the purchasing of ad placements. The effectiveness of an advertisement is mainly dependent on it appearing in the right place at the right time. There’s little to no purpose in defining a target market if a company can’t reach that segment.

By leaving ad placement optimization to algorithms and machines, businesses can save a considerable amount of time and improve the efficacy of their campaigns.

It can prove challenging for a human to consider all the variables involved in ideal placement, but not for a program. Programmatic advertising leads to faster decision making and optimized targeting.

This vast potential is why more than half of video ad spending goes to programmatic advertising. Recent innovations in ad tech and consumer trends will continue to increase this profitability. Here are a few of the ways companies are profiting from programmatic ads in 2020.

Programmatic media buys now account for 85% of all digital ad spending, according to estimates released in a new report from the Interactive Advertising Bureau.

The finding is important because the IAB to date has eschewed official estimates for programmatic in its regular ongoing tracking of digital advertising spending in its quarterly Internet Ad Revenue Report.

The estimates, which are contained in the IAB’s “Brand Disruption 2020” report released this afternoon, put U.S. programmatic ad spending at nearly $79 billion, an increase of 87% from 2017, the first year benchmarked in the report. The IAB

Other programmatic leaders are thinking the same

Here is a great thought leadership piece on AdExchanger talking to the above programmatic benefits during the economic downturn.

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Michael Lehman, senior vice president, head of global supply at TripleLift.

Prior to the first report of the coronavirus in late December, many had speculated for the better part of two years when the next economic downturn would arrive. Whether the virus sparks a complete downturn or temporary correction is unclear, but due to the inextricable link between consumer spending and advertising, the media community’s shared anxiety is growing daily.

However, there’s reason for the programmatic advertising sector to anticipate stability. Programmatically transactable digital media – and the companies that power it ­– has a few defining characteristics that suggest it would fare better in challenging times. Advertisers should take note.

Ultimately, during times of instability, we can expect a flight to accountability, agility and continuity.

Accountability

While programmatic occupies a larger section of the marketing funnel, it is still primarily a highly targeted, mid- to lower-funnel protocol frequently used for direct response campaigns that align with last-touch attribution. This manner relies less on the speculative nature of branding and more on the data-driven, outcome-based formula that feeds programmatic algorithms industrywide.

When results can be so cleanly tied to spend, that spend should continue to be justifiable, even in a downturn.

And as brands look for cost-savings, one of the first places they look is their agencies. One more forward-thinking move is for brands to invest in and take more control of their programmatic strategy and budgets to save costs and invest in a more efficient form of media. This could have ripple effects downstream that also benefit the programmatic entities that power those transactions. READ FULL ARTICLE on AdExchanger

We will continue to add updates as we see industry and Audience Cloud trends emerge on this front. We would love to get your comments and start a much needed collaborative dialog in the comments. The more we all communicate and share data, plus insights, the stronger we become as an industry, and our ability to make a difference for advertisers, publishers and consumer.