We are well on our way to an automated media buying world, but Canada is being left behind.
According to a survey of marketers conducted by Acuity Ads and Marketing, 12% of marketers said their brand had used programmatic, programmatic direct or RTB media buying in the last 3 months.
Of 522 executive, middle-management and junior marketers surveyed, more than a third (34%) had not heard of programmatic. Of the majority who had heard of it, nearly half (49%) rated their understanding as “very poor,” and a similar minority (45%) said their brand was below average or lagging behind on programmatic execution.
Only 1% of programmatic-aware marketers said they were experts or had an above average understanding.
“I’m not surprised,” said Frederick Lecoq, Canadian Tire’s SVP marketing for FGL Sports and Mark’s. “We digital marketers haven’t done a proper job educating our organization and peers to make programmatic buying easy to understand.”
Global brands are investing heavily in programmatic technology to make the most efficient use of their media dollars. By the end of this year, more than 40% of global digital display advertising spend — $21 billion, according to Magna Global — will be trafficked through real-time programmatic media channels like RTB ad exchanges and programmatic direct integrations.
Research from the IDC suggests Canada will be spending far less of its digital display budget — 20% or $82 million — on programmatic.
A roundtable of marketers struck by Marketing to discuss the research findings agreed that while it is still early days for programmatic in Canada, companies won’t be able to hold back much longer.
“When brands start to see and feel the efficiencies programmatic buying can deliver, it will be a mad rush, and they’ll be demanding it of their agencies and looking at bringing it in-house,” said Maggie Fox, global senior vice-president of marketing for SAP. “It’s just a matter of time.”
“Now that we’re in the ‘right time’ marketing era, programmatic usage will increase significantly,” said Lecoq. “At Sport Chek, our programmatic should soon exceed 50% of our online display ad buy.”
On average, programmatic-aware marketers estimated their brands were spending 15.9% of their digital spend on programmatic. They predicted that by 2017 that share would nearly double, to 30.9%.
Marketers from companies with more than $250 million annual revenue were the most likely to have gotten their feet wet in programmatic already. Nineteen per cent said their brand had used programmatic in the last 3 months, 17% said they’d used programmatic direct, and 15% had used RTB. It’s likely that Canadian marketers that are part of global brands are driving adoption, since they have access to expertise and technology deals in other more programmatic-forward markets like the U.S. and U.K.
“The benefits of programmatic are around time-savings, cost-efficiencies, and getting closer connections with your end consumer,” said Ashley Bast, VP marketing for Acuity Ads, which commissioned the study. “Those who get left behind are going to be paying more to reach people in a blunter way. If you happen to be with a large organization, the risk is you’ll be undermined by more agile and nimble players.”
The survey shows Canadian marketers see the value of programmatic, with 86% agreeing that it is an effective way to reach consumers with targeted messaging, and 74% agreeing it is cost-effective. Somewhat surprisingly, marketers saw programmatic as equally valuable for direct response (85%) and brand marketing (84%) campaigns.
But despite its perceived effectiveness, a general lack of understanding and education has kept brands from adopting it. Asked what the biggest barriers were to programmatic, marketers ranked “lack of understanding overall in my company” as the most problematic. In second place was “concerns over whether premium content is actually ‘premium’.” Concerns about programmatic typically cited by marketers in more programmatic-forward markets, like fraud and price transparency, were lower down the list.
“Canadian marketers showed a clear rallying cry around the biggest barrier – organizational knowledge,” said Bast. “Our hypothesis was there was an opportunity to better educate, inform and bring transparency to the Canadian marketplace around ad technology. What was surprising was how big the knowledge gap was.”
The study included a preliminary survey of 116 agency staff, who generally showed higher awareness and adoption of programmatic. Twenty eight percent said their agency had used programmatic in the last 3 months.
The relatively high reported level of adoption among agencies, compared to lower levels of adoption marketers, sparked some questions about whether agencies were carrying out programmatic buys for clients without clients’ knowledge. “The vast majority of the 90% that say their brand hasn’t used programmatic likely do not understand what their agency is doing,” said Craig Jennings, RBC’s director, media/agency management.
In any case, Canadian marketers seem largely content to leave decisions about media buying technology in the hands of their agencies. Even among marketers who know what programmatic is, 44% said they leave decisions about it to their agency. Of those that work with agencies, 71% said they were satisfied with how their agency handled programmatic.
Still, education was a focal point in agency-marketer relationships. Fifty percent of marketers that partner with agencies on programmatic said they wanted more information on how it benefits their brand, and 41% said their agency did not provide clear, easy-to-understand reports on programmatic campaigns.
Rogers Media Insights conducted the research on behalf of Acuity and Marketing.
To read Marketing‘s full roundtable discussion on the survey, with comments from top marketers at FGL Sports, Intercontinental Hotels and RBC, be sure to check out the November issue of the magazine.