PROGRAMMATIC BUYING

THE TRANSFORMATION OF MEDIA

THROUGH ALGORITHMS

06/15

While programmatic buying has

grown to represent a significant share
of digital display advertising in the
region, it still proves fairly obscure to
many. Here, we decode its principles,
idioms and identify why it is promised
to grow further still.

White Paper 6 v3.indd 1

IN PARTNERSHIP WITH

5/28/2015 3:55:43 PM

AUTHORS
Christos Solomi
Igor Skokan
Dimitri Metaxas
Eric Mirabel
Neeraj Khanna

COVER IMAGE iStock by Getty Images

METHODOLOGY
This paper includes a study of key
stakeholders, comprising a combination
of both local and multinational
advertisers, to shed light on their views
and opinions on programmatic media.
Our research also relies on several
proprietary data and information
sources, as well as primary research
conducted on a set of (N=22) national
and multinational partners of OMG
MENA. The study, conducted via online
questionnaires, was fielded in March
2015. Other sources include Accuen,
Resolution and Annalects internal
knowledge bases, interviews with
regional and global experts, as well as a
Yahoo-Annalect US 2014 study on
creative versioning.

White Paper 6 v3.indd 2

5/28/2015 3:55:43 PM

PROGRAMMATIC BUYING

02 /03

EXECUTIVE SUMMARY
Programmatic buying has dominated press headlines
in the past two years, making it the latest buzzword on
everybodys lips in the advertising industry. Globally,
brands are investing a greater percentage of their
digital budgets through this type of platform, yet it still
remains an area that many advertisers feel they do not
fully understand, much less utilize to its full potential.
Nevertheless, the benefits programmatic provides in terms
of efficiency are unanimously acknowledged. Over 50% of
our studys respondents claimed that they plan to increase
investments in this form of media over the coming 12
months, with improved targeting, improved effectiveness
and reduced wastage being the main perceived benefits.
Thanks to the massive growth of data over the past few
years and the various platforms that contain, manage and
connect it all together, programmatic has evolved further
to utilize this data in order to now marry context with
the specific user. This effectively produces delivery of the
right message to the right consumer, at the right time.
This white paper addresses the concerns that exist,
demystifies some of the jargon associated with
the discipline and provides a framework through
which advertisers can embrace programmatic
buying more effectively going forwards.

White Paper 6 v3.indd 3

5/28/2015 3:55:43 PM

PROGRAMMATIC BUYING

1. A BRIEF HISTORY
Simply put, when one speaks of programmatic buying,
they are referring to the ability to buy media automatically
across digital channels, using technology, data and rules.
Before diving into the discipline further, it is worth taking
a look back at the development of digital media buying to
understand how we have arrived at this point.
The earliest form of digital media that most marketers
will recognize is the simple banner ad. Starting in the mid1990s, coinciding with the launch of online portals such as
Yahoo!, advertisers could buy banner space directly from
websites on a fixed placement basis, just like a print media
booking. The exponential growth of website domains
and content over the next four to five years created an
operational headache for both advertisers and media
agencies, due to the vast choice of potential websites on
which to advertise. This made it particularly difficult to
reach online eyeballs in a practical or scalable manner.
The advent of the ad network solved this problem,
taking the burden of having to work with hundreds (if not
thousands) of publishers for each potential campaign off
the hands of advertisers. Ad networks could now serve
a campaign across hundreds of sites in an automated
manner, with campaigns priced on a CPM (cost per mille)
or CPC (cost per click) basis. While this process clearly
saved time and eased the workflow, it also meant a loss
of control. Planners and advertisers had to trust that the
ad network placed ads on sites with suitable content and
indeed optimized campaigns diligently. Unfortunately,
this was not always the case; advertisers were forced to
accept the lack of transparency on where their
ads appeared.
The first examples of programmatic or self-service
ad platforms appeared around 15 years ago in the paid
search space. Overture is an early example of this,
however, the most well-known example is of course the
Google Adwords Program. Advertisers and agencies
could now manage their paid search campaigns through
a self-service, browser-based platform, where they could
program in their campaign parameters, keywords and
ad copy, thereby gaining full control of the buying and
optimization process.
It was not until 2005 that advertisers and agencies
would have the same level of control in the display banner
space. The launch of advertising exchanges, such as
Right Media and The Double Click Exchange, allowed one
to purchase banner inventory in a transparent manner

across millions of sites in an open auction market place,

mirroring the paid search space to some degree. In 2007,
the first commercial display buying platforms (also known
as demand side platforms, or DSPs) appeared. These
self-service buying platforms connected to exchange
marketplaces, gave buyers the ability to buy and optimize
display banner campaigns themselves, without having to
rely on an ad network to deliver campaigns.
Through browser interfaces, one could now plan, set
up, buy and optimize display campaigns on virtually any
site in the world. It heralded the beginning of the demise
of the ad network model, giving agencies and advertisers
the same level of control over campaigns they enjoyed in
the paid search space. The era of programmatic display
buying was finally upon us and has since grown each year,
evolving to encompass almost all forms of digital media,
including search, social, display, video and mobile ads.
The growth of data and data management platforms
has fueled investments in programmatic media. Today,
we are seeing a further evolution in this space where
multiple forms and sources of data - connected to buying
platforms via data management platforms - are now
informing buying decisions. Whether or not a display
impression is bought from an exchange often relies
on how much data is available on the potential viewer.
Indeed, the price being offered for each impression is
often influenced by this very same data. The moment of
purchase coincides with the moment an ad is viewed by a
consumer, referred to as real-time bidding (RTB).
When audience data informs buying decisions, one
tends to use the term audience based buying, as opposed
to website level buying. Since the context in which an
ad appears is clearly important, performance is usually
improved when the context is married with data on the
consumer, effectively delivering the right ad, with the right
message in the right context, at the right time, to the
right consumer.

The growth of data and data management platforms has

fueled investments in programmatic media

White Paper 6 v3.indd 4

5/28/2015 3:55:43 PM

04/05

THE TRANSFORMATION OF MEDIA THROUGH ALGORITHMS

2. ECOSYSTEM AND JARGON BUSTER

The programmatic space can seem daunting to the
neophyte and is often filled with indecipherable acronyms,
terms and technologies. Part of the reason for this is that
the ecosystem itself comprises multiple players and to
fully deliver on its capabilities, one must use a variety of
technologies and techniques.
As the chart on the right shows, about half of the
respondents to our survey claim to have a limited
understanding of programmatic media. Hence, to
demystify this practice, here is a glossary of some of the
most common terms in programmatic buying.
DEMAND SIDE PLATFORM (DSP)
As the name suggests, a Demand Side Platform, also
known as a Bidder, is a buying platform that allows the
setup, management and optimization of campaigns. A
DSP connects to digital media exchanges through which
media can be purchased, often in real time. DSPs come in
a variety of forms, each typically having specific features.
Specialized DSPs focus on video and mobile media,
however, many allow the execution of campaigns across
multiple channels, including display, social, video and
mobile (both mobile web browser and in-app) ads. Most
DSPs offer a great level of flexibility in campaign setup
and a multitude of targeting options.

5%

DO YOU FEEL YOU

HAVE A SOLID
GRASP OF WHAT
PROGRAMMATIC
MEDIA IS?

SOURCE: OMG CLIENT SURVEY (2015)

SUPPLY SIDE PLATFORM (SSP)

Supply Side Platforms, also known as Exchanges, are
marketplaces through which buyers can purchase digital
media. Publishers can connect to an exchange and offer
their advertising inventory for sale while buyers use a DSP
to connect to SSPs and purchase it.
SSPs typically operate like an auction where the buyer
with the highest bid secures the advertising impression.
However, a publisher can and will impose a minimum
floor price.
The type of advertising placements that one can
purchase via an SSP is now very diverse and includes
standard display banners, rich media, mobile display,
video pre-roll and even social ads on platforms such
as Facebook.
REAL TIME BIDDING (RTB)
When one uses a DSP to buy media inventory from an
SSP they are entering a live auction to buy media. Real
Time Bidding is a form of programmatic buying through
a DSP where the moment of purchase coincides with
the moment that an impression is delivered. The second
you win a bid in an auction an ad appears to a consumer.
Most forms of offline media highlight examples of non-real
time advertising where the moment of purchase does not
coincide with the moment a consumer sees an ad. For
instance, if you were to purchase spots on the radio you
would execute a booking order to a radio broadcaster.
This would represent the moment of purchase. The time
the spot aired however could be days, weeks or perhaps
even months in the future.

White Paper 6 v3.indd 5

5/28/2015 3:55:43 PM

PROGRAMMATIC BUYING

OPEN EXCHANGES, PRIVATE MARKET PLACES AND

PREFERRED DEAL
When buying media through an SSP, inventory can be
purchased in a number of ways. The most common form
is through what is called an Open Exchange. As the name
suggests, all buyers in the marketplace compete in an
auction to purchase inventory on an Open Exchange.
Anyone connected to an SSP through their buying
platform can enter this auction.
SSPs also allow buyers and publishers to create what
are known as Private Marketplaces (PMPs). Here, one
publisher can make their inventory available to either one
or a select group of buyers with a set floor price. Buyers
in the Open Exchange that are not part of this Private
Marketplace cannot bid on the inventory.
Preferred Deals are the most recent development
in the programmatic supply space. This is when one
publisher agrees to a fixed price deal with one buyer to
purchase an agreed volume of inventory. While this is
executed programmatically via a buying platform and
through an exchange, it is not an example of what we call
real-time bidding. The moment of purchase, i.e. the time
at which the deal is agreed, does not coincide with the
moment that an advertisement is delivered to a consumer.
This form of buying more closely resembles traditional
media buying but is nevertheless a form of programmatic
buying due to the buying platform.

The data stored and used in a DMP is typically

classified into three types. First-party data is usually
defined as any type of data that has been collected via
direct contact with a customer, be it through a website
visit, a purchase or a registration of some form. Secondparty data is information that has been collected by
someone else, which they have agreed to share. An
example of this is when an airline shares data with hotels,
since a consumer that has just booked an airline ticket is
likely to be in-market to book a hotel stay as well. In this
example, both parties would mutually exchange such data
via a DMP. Third-party data, much like second-party data,
does not come directly from ones own customers. Data
aggregators collect information relating to online users
demographic and psychographic profiles, as well as their
purchase habits. This data can be shared on a DMP to
enhance audience targeting. Third-party data providers
typically charge a fee for the use of this data and normally
provide it for specific audience segments.
TRADING DESK
A trading desk is an integrated stack of different
technologies, which could include multiple DSPs, a
DMP with multiple data sources, multiple SSPs, ad
verification tools and creative versioning technologies.
These are managed by a team of digital traders and
analysts, thereby forming a platform to deliver
programmatic campaigns.

DATA MANAGEMENT PLATFORM (DMP)

A Data Management Platform (DMP) allows one to
collect, store, organize and use data. In the context of
programmatic buying and real-time bidding, a DMP will
connect to a DSP in order to allow one to make datadriven buying decisions.

White Paper 6 v3.indd 6

5/28/2015 3:55:44 PM

06/07

THE TRANSFORMATION OF MEDIA THROUGH ALGORITHMS

3. BENEFITS OF PROGRAMMATIC
Programmatic buying gives brands more control of
where, who and how they communicate with people,
thus leading to more targeted media, less wastage and
ultimately greater effectiveness. It is this value chain that
has led to the meteoric growth of programmatic buying.
It is interesting to note how the perceived benefits of
programmatic correlate with the main objectives clients
have. The majority endeavor to build brand awareness and
drive website traffic, as well as generate
new leads.
Many in the industry do see the clear benefits that
programmatic can bring to the table, especially with
regards to improved targeting (55%) and improved overall
effectiveness of media (55%), as well as reduced wastage
and enhanced capabilities to make optimizations in real
time.

WHAT DO YOU FEEL ARE THE PRIMARY BENEFITS OF

PROGRAMMATIC?

SOURCE: OMG CLIENT SURVEY (2015)

WHAT ARE YOUR MAIN OBJECTIVES FOR DISPLAY

CAMPAIGNS?

81.8%

59.1%

45.5%

18.2%

18.2%

0%
BUILDING
BRAND
AWARENESS

DRIVING
WEB
TRAFFIC

LEAD
GENERATION

DRIVING
IN-STORE

DRIVING
E-COMMERCE

OTHER

SOURCE: OMG CLIENT SURVEY (2015)

White Paper 6 v3.indd 7

5/28/2015 3:55:44 PM

PROGRAMMATIC BUYING

Publisher index
scores against the
target audiences

Target
Audience 1

Target
Audience
2

Publisher A

250

86

Publisher B

115

178

Publisher C

23

45

Publisher D

300

100

White Paper 6 v3.indd 8

HOW CONTROL OF FREQUENCY CAN REDUCE WASTAGE

75%

% Impressions

While the ability to target precise audiences is

undoubtedly a huge driver of its effectiveness, there
is perhaps a more basic feature of the practice that all
marketers and media planners - both offline and online
- can appreciate. Reach and frequency are key metrics
of any well optimized media campaign, but when it is
delivered using multiple publishers and networks, these
are impossible to fully control. It is almost inevitable that a
large percentage of users exposed to a campaign will be
either over- or under-exposed. If however, one delivers an
entire campaign utilizing a single delivery platform, overall
reach and frequency can be controlled to a much higher
degree. Simply controlling reach and delivering even
frequency distribution can drastically reduce wastage
and thereby improve efficiency. Therefore, programmatic
is able to significantly reduce over-frequency and
thus wastage by improving on-target delivery without
significant increases to under-frequency.
Beyond this, the ability to deliver customized messages
to specific audience segments using first- and third-party
data can be incredibly powerful. A critical component of
the success of a campaign is the creative message we
deliver to each consumer.
Creative versioning platforms allow the production of
dozens (if not hundreds) of variants of an ad in a scalable
way. When executed in unison with a data-driven trading
desk, they allow messaging to be tailored to an individual
consumer based on a huge number of variables. As an
example, a potential customer that appears to be close to
making a purchase decision can be shown a very different
message than someone who has already made a purchase
but is open to being upsold other products or services.
In a similar fashion to frequency control, utilizing data
via a programmatic buying solution can also allow an
advertiser to control the reach much more effectively.
As per the chart below, four sample publishers each
have an indexing score against the two target audiences.
The index score of 250 for Publisher A against Target
Audience 1 means that Publisher A is 2.5 times more likely
to attract Target Audience 1 than the other websites
indexed. In a traditional buying scenario, Publisher A may
look like a desirable buying opportunity if the advertiser is
wanting to build reach across Target Audience 1.

60%
45%
30%
15%
0%

SOURCE: ANNALECT DATA MANAGEMENT PLATFORM (2015)

Based on the campaigns that we have already executed

for our clients at OMG-MENA, programmatic has proven its
aptitude for increasing efficiencies, with some advertisers
witnessing a 10% increase in Click-Through Rates (CTR).
Beyond this, it also produces uplift in the following metrics:

SOURCE: YAHOO-ANNALECT USA PERSONALIZATION INSIGHTS STUDY (2014)

However even in this scenario the advertiser is likely to

experience a spill of impressions outside of its target
audience since Publisher A also attracts audiences outside
of Target Audience 1. By utilizing data programmatically
an advertiser is able to determine, pre-bid, to only
purchase the impression if it is being consumed by its
intended target audience. In effect, the use of the data
allows the advertiser to reduce the spill to zero and drive
an on-target reach of 100%. Such capabilities would
have been unheard of when purchasing media in a
traditional fashion.
The control over almost all aspects of a campaign - be
it who, when or where we target and what we say can
deliver a truly compelling offering when combined.

5/28/2015 3:55:44 PM

08/09

THE TRANSFORMATION OF MEDIA THROUGH ALGORITHMS

4. FUTURE TRENDS
In a space where change is so frequent and rapid, it is not
easy to predict where programmatic is heading beyond a
certain time frame. There are, however, certain key areas
where developments are currently focused:
1) MULTI-DEVICE TRACKING
Currently, most programmatic technologies rely heavily
on the use of cookies and their data to deliver targeting,
which presents a problem on two fronts. Cookies tend to
be unique to devices and are limited to in-browser activity,
making mobile in-app tracking particularly problematic.
This prevents the accurate measurement of reach and
frequency across devices and channels, as well as the
targeting of users within an app environment.
Being able to identify a user across multiple devices
and within an app environment will require a method
that does not use cookies to establish identity. The most
obvious way to achieve this is by utilizing user log-in
data instead and the organizations that own such data
are limited to the likes of Facebook, Google, Twitter
and possibly Amazon. With the re-launch of the Atlas
ad serving platform, Facebook has made considerable
strides in helping to solve this problem. Using hashed
(de-identified) Facebook user login data, Atlas promises
to be able to track and target users across devices and
channels. It is very likely that Google too will launch a rival
product in the
near future.

2) MERGING OF CRM AND MEDIA

The traditionally two separate fields of CRM and Media
are fast merging into one. CRM data is clearly extremely
valuable and the ability to target consumers based on
previous contact with a brand has obvious benefits. In the
programmatic space, the first example of such a union
is Facebooks Custom Audience tool, which has allowed
the targeting of users on the Facebook ad platform
through email data. This has also facilitated the creation of
look-alike profiles to existing customers for the purpose
of new customer acquisition. It has been reported that
Google is preparing to launch a similar product offering in
the paid search space. In the display RTB field of certain
markets such as the USA, it is now possible to match
CRM email data to targets via ad exchanges, using what
are known as Data Match Partners. These create a pool
of cookie data that match email IDs, which can be used
for targeting. Currently, most Data Match Partners have
extremely limited reach in the Middle East, however, we
anticipate this to grow over the next 12 to 18 months.
Nonetheless, the future is certainly promising as over 50%
of respondents are planning to increase (30% significantly)
investments in programmatic in the next 12 months.

ARE YOU PLANNING ON INCREASING YOUR RTB

INVESTMENTS OVER THE NEXT 12 MONTHS?

31.8%

27.3%

22.7%

YES, LARGER
INCREASE (10%+)

I DON'T KNOW

YES, SMALL
INCREASE (5-10%)

18.2%

0%

0%

NO CHANGE

NO, PLANNING TO
DECREASE

NO, WE'RE
COMPLETELY
REMOVING IT

SOURCE: OMG CLIENT SURVEY (2015)

White Paper 6 v3.indd 9

5/28/2015 3:55:44 PM

PROGRAMMATIC BUYING

3) PROGRAMMATIC CREATIVE AND CREATIVE

VERSIONING
As programmatic investments increase and campaign
targeting becomes more granular the need to
tailor messaging to specific audiences will become
increasingly important. Creative agencies, who
traditionally were used to producing a limited set of ad
copies, will need to embrace technologies that allow
one to deliver hundreds if not thousands of variants of
an ad, each talking to specific audiences with the right
tone, messaging and offer. The only scalable way to do
this is by utilizing technologies that can build creative on
the fly, by combining component elements in real time
based on who the audience segment viewing the ad will
be.

However, the medium that has taken up the lions share

of column inches is programmatic TV. To date, what has
occurred in this area cannot be called programmatic
advertising in the way it is meant and understood in the
digital space. The infrastructure of inventory exchanges as
well as the ability to purchase ads in real time and use data
to target, is not currently available. Moreover, it is worth
highlighting that the economics of TV advertising are vastly
different to that of online media. One does not have a huge
oversupply of ad inventory, which undoubtedly limits the
desire of broadcasters to invest in this area. It is therefore
a requirement of the media for spots to be pre-sold well
before broadcast and then receive pre-approval to ensure
that the creative complies with broadcast regulations. The
benefits to advertisers are obvious however, and it is this
area in particular that is likely to drive growth in the field.
Despite the many benefits of programmatic, some
advertisers are still hesitant to adopt this buying
approach. In the below chart, some of these concerns
are highlighted, transparency being the biggest at 50%.
These concerns are an industry-wide issue that will need
to be addressed before we see a full-scale adoption of
programmatic buying.

4) BEYOND DIGITAL MEDIA

The operational and media efficiencies that
programmatic media has delivered in the digital space
has led many to speculate how similar technological
innovation could disrupt and improve other forms of
media. Outdoor advertising is one such example, with
digital signage providing an obvious delivery mechanism
for dynamic, real-time advertising. There have been
several examples of this coming to fruition in markets
such as the USA, the UK and Australia.

WHAT DO YOU FEEL ARE THE PRIMARY BARRIERS TO

GROWTH IN PROGRAMMATIC?

50%

36.4%

27.3%
22.7%

13.6%

4.6%

TRANSPARENCY

UNDERSTANDING/CLEAR
COMMUNICATION OF
BENEFITS BY AGENCY

OPERATIONS

BRAND
SAFETY

NO BARRIERS

NO AVAILABILITY OF
FORMATS I WANT

0%

IT'S NOT RELEVANT TO MY

GOALS AND OBJECTIVES

SOURCE: OMG CLIENT SURVEY (2015)

White Paper 6 v3.indd 10

5/28/2015 3:55:44 PM

THE TRANSFORMATION OF MEDIA THROUGH ALGORITHMS

10/11

CONCLUSION
The benefits of adopting programmatic buying to address
display media are clear. Its enormous adoption by brands
worldwide as well as its double digit growth in investments
over recent years are a testament to the results it drives.
What used to be thought of as a platform for delivering
performance-led campaign objectives - thanks to the growth
of enhanced targeting, wider inventory sources and creative
formats - is now seen as a channel that can also be used to
deliver on brand-led campaigns.
Based on the results of local surveys, it is clear that the
limiting factors to growth of programmatic media in our region
are less to do with the products capabilities and more to do
with a lack of clear understanding for the discipline itself. More
education is needed together with clear planning guidelines.
Best practices need to be established, as well as a solid
understanding of how programmatic should be used against
clear objectives.
It is by no means the panacea of digital media and
overselling could be a potential barrier to its future growth. It
should be clear that programmatic is simply a more efficient
way of delivering media, which is enough of a benefit to
marketers.

It should be clear that programmatic is simply a

more efficient way of delivering media, which is
enough of a benefit to marketers

White Paper 6 v3.indd 11

5/28/2015 3:55:44 PM

About Omnicom Media Group MENA

Omnicom Media Group is the media services
division of Omnicom Group Inc., a leading
global advertising, marketing and corporate
communications company, providing services
to over 5,000 clients in more than
100 countries.
Around the world and in the Middle East,
Omnicom Media Group owns and operates
the full service media networks OMD, PHD and
Resolution, as well as a number of specialty
media communications companies.
We offer unparalleled clout in the marketplace
as well as a depth of capabilities and experience
to drive leadership and innovation in every
media type. As we maximize our investment
in building best-in-breed capabilities, we can
draw upon industry-leading talent and bring the
maximum market leverage to bear for
our clients.

2015 Omnicom Media Group MENA

White Paper 6 v3.indd 12

5/28/2015 3:55:44 PM