By Andrew Dalglish - 13th November 2015
One number in the recently published B2B Barometer study caught my eye. Two thirds (64%) of B2B marketers describe programmatic advertising as irrelevant. That’s striking because an estimated 59% of digital ad spend in the UK, that’s £1.8 billion, is programmatic and next year it’s forecast to reach 70%. Yet, most B2B marketers still don’t see it as relevant. Odd.
It’s strange because if we break it down, programmatic is unarguably attractive.
Historically digital ad space has been bought in ‘batches’ based on number of impressions, frequency of ad rotation or some other measure. The problem with this is that a) it’s time consuming doing all those deals and managing results, and b) there’s a lot of potential for wastage as even the most niche website will still have visitors that don’t fit your target audience.
Programmatic goes a long way towards addressing these issues. When landing on a web page information about an individual user (browsing behaviour, demographics, etc.) is sent to an ad exchange. Through this exchange, advertisers bid on the user’s ‘eyeballs’ and the winning bidder’s ad is then presented. All of this happens in milliseconds using automated algorithms.
So programmatic is easier and more targeted. That’s got to be attractive, so why isn’t it also seen as relevant?
Well, a recent study by Appnexus identifies two key challenges hindering the wider adoption of programmatic – a lack of understanding about how to use it and a fear that ad content will end up on undesirable sites. I’d add another two reasons to this which are more specific to B2B. Digital advertising quite simply isn’t a big area of expenditure for most B2B marketers. Last year’s B2B Barometer shows that only one quarter (25%) allocate any budget to it and even then it only accounts for 9% of their total spend. Added to this is the fact that many B2B publishers don’t offer programmatic yet and even if they do, information on their visitors may not be of much targeting value (e.g. demographics like gender are of less relevance in B2B markets).
So programmatic isn’t on the agenda just now, but watch this space. After all, it wasn’t that long ago that social media was seen as purely the preserve of B2C marketers.
Andrew has specialised in B2B research for over a decade and co-founded Circle Research in 2006. He is a columnist for B2B Marketing Magazine, a regular contributor to Research Live and frequent speaker at leading events such as the B2B Leaders Forum, Customer Experience Live and the Social Media World Forum. Andrew is a Chartered Member of the MRS, teaches the MRS B2B research course and holds an MA in Psychology from Aberdeen University alongside an MSc in Marketing from Strathclyde University.