From Manual to Automated: the Future of Programmatic Trading

Since the inception of programmatic a decade ago, the industry has seen astronomical growth. According to research conducted by eMarketerprogrammatic digital display ad spend in the UK will reach £5.69 billion in 2019, an increase of 18.2% from the previous year, and will account for 87% of the total digital display spend. In 2020, this figure will likely increase a further 19.4% to £6.8 billion and will account for 88.9% of the total digital display spend. 

Alongside this growth there has been considerably improved technological capability and continuous industry change, which in turn has resulted in greater complexity in the way programmatic campaigns are set up and executed. 

During the initial stages of programmatic adoption, media buyers began to use the emerging technology known as a Demand Side Platform (DSP) to execute the first programmatic campaigns. These campaigns were set up in a basic manner with key strategies split out with their own relevant budgets, bids and frequency settings applied to them and manually adjusted to maintain adequate pacing over the course of the campaign. 

Early programmatic optimisation was also an incredibly manual process. In an effort to achieve campaign KPIs, buyers would regularly pull reports to identify poorly performing elements and exclude them from targeting, or capitalise on high performing elements by creating new strategies which enabled spend to be focused towards them. 

As DSPs became more sophisticated through advancements in their own technology and integrations with various partners, more complex strategies became available for incorporation into campaigns. In addition, improvements in device targeting capabilities required devices to be split out into their own line items across campaigns, as the nuances in the different environments required different targeting, frequency, viewability and bid settings to be applied.  

The increase in targeting capabilities and shift towards granular campaign strategies resulted in programmatic campaign set ups becoming increasingly complex and difficult to manage for a human trader using the manual methods of optimisation under the usual time constraints. This led to tools such as bid factors/multipliers being introduced into platforms to enable the management of complex campaigns with many optimisation combinations.  

However, in many cases, the use of bid factors/multipliers simply wasn’t enough to enable effective management of such large campaigns. And so, the rise of automated trading began in the form of algorithms available in demand side platforms that could be leveraged to carry out specific automated bidding strategies. While these automated strategies aim to make the process of campaign management and optimisation easier for a trader there a still several constrains that need to be applied for the algorithms to operate within. 

With the trend of automated trading on the rise some key questions regarding the future of programmatic include: 

  • How will the rise in automated trading change the way in which programmatic campaigns are set up and executed?  
  • What will be the impact on the role of a programmatic trader? 
  • How can advertisers look to gain a competitive advantage through programmatic automation? 

These are all questions that are answered in our latest free whitepaper which can be downloaded here: http://theprogrammaticadvisory.com/resources/whitepapers/what-is-the-future-of-programmatic-trading/