Felipe Villanova de Leon, Performance & Programmatic Director at UM MENA, talks about the importance and growth of the technology.
What are the main benefits of programmatic?
Programmatic saves time, provides transparency, and gives more control to the advertiser through automation. Ten years ago, we would go to various publishers and we would send different insertion orders (IOs) to each one of them – which means we were buying the same audience through different entities. Programmatic now allows us to buy the same partners together, and it provides the advertiser with better control from a reach and frequency perspective. The negotiation and buying process is also quicker because we can clearly select what we want and what we don’t want, instead of having multiple human interactions.
How important has programmatic become for you, as a media agency?
First of all, digital currently represents 50%, if not more, of the overall media spend globally. Last year, it bypassed TV for the first time in terms of budgets, and over time, this will naturally increase. Out of this 50 %, around 70% to 80% is programmatic.
Programmatic started as a line in the media plan, back in 2015. Today, it’s becoming the whole media plan, because everything is automated. The only things that are not programmatic now are special executions, influencers buying, content buying… Anything that requires a more granular and manual approach.
Are agencies at risk of being made redundant as clients can increasingly go straight to platforms and have this job automated?
I wouldn’t say so. Agencies provide value, because they have manpower and they understand every single variable of a particular platform – we are basically specialized in that. We know for a fact what would work and what wouldn’t work for a given objective; and during a campaign, we can change the variables. If you leave it to the platform to decide where it’s going to spend the budget, the advertiser won’t know how that budget is being spent. And yes, platforms are definitely becoming smarter, but they see only one variable – the end goal – not the big picture against that end goal. It’s our job to define and understand these variables. At the end of the day, someone needs to teach the AI how to achieve a goal.
How is programmatic growing in the region?
In the UAE, total digital ad spend grew by 400% between 2015 and 2018, with programmatic representing 70%-80% of that total. We are becoming mature when it comes to programmatic, because advertisers understand it and its benefits better.
What has driven advertisers to better understand it?
In general, advertisers are more knowledgeable and understand third-party data vs owned data, as well as the need to collect data to serve better advertising to their customers. This is natural for global companies, but local companies as well know that they need to step up and understand how to collect data, because this data is going to be valuable for measurement, traceability and, of course, higher sales. They even want to have granular discussions with us – which wouldn’t have been the case two or three years ago.
Nowadays, everyone is more interested and knowledgeable. Programmatic bridges the gap between buyers and creatives; both of them need to work together towards the end goal. And it bridges the gap was with the client because this client has access to information that sometimes the media or the creative don’t have. And this is an ongoing process because it won’t stop there. Every year, every month, things are changing and all of us in the industry need to understand the consequences.
What about publishers? How are they evolving in the region?
The first change I see is around viewability – the metric that tells us that our advertising was viewable on the screen. When this started in 2015-2016, the numbers were crazy. Out of all the advertising being bought, average [viewability] was around 50% worldwide and in the region. So, buyers started sharing numbers with publishers, and publishers realized they needed to measure and provide much better viewability rates. Today, this is happening across the board, with no exceptions.
The second change is about data. Large media services sit in a lot of first-party data that can be extremely valuable. Since 2018, publishers have been focusing mainly on that, which is great because this is exactly what advertisers and agencies are looking for: more valuable data to address with advertising and to avoid wastage in customers’ audiences.
How do you see the future of programmatic?
First and foremost, TV is going to become addressable. It’s an evolution which we’re definitely going to see happening over the next three years, the same way it’s already happening with outdoor. We increasingly see digital screens, and with them comes agility in buying and selling the inventory, providing different creatives, etc.
Radio is another point. Online radio consumption is increasing and we have streaming services like Spotify, Deezer, and Anghami that all have programmatic buying. Offline services are becoming completely digital and are providing advertising with more insights and more options to purchase in an addressable manner. Programmatic will only grow forward, absorbing more data, creativity, and other ways of purchasing media.