The best preconditions for successful advertising is to first think, then collect data and finally segment them in a smart way. Act as holistically as possible and develop dynamic communication concepts that combine creative performance, data management and media buying as early as the strategy development stage.
Since October 2017, programmatic advertising agencies based in Germany have been able to undergo a specific quality audit: The German Federal Association of the Digital Economy (BVDW) has developed a certificate with the aim of facilitating the selection of a service provider. Along with the Code of Conduct Programmatic Advertising, it is intended to help programmatic media buying succeed. What is Programmatic Advertising (PA) all about? The term refers to "real-time advertising" and describes the automated and target group-oriented purchase of advertising space. Accurate targeting and automated processes help to save time and minimize scattering loss. Advertisers place bids in real time using specific attributes for available advertising spaces. These spaces are then sold to the highest bid of the auction - automatically and within a split second.
From Web to Screen
PA originated in the United States of America, where it first appeared in 2003 in the trading of advertising space on websites. It is now increasingly being used in the Digital Signage and DOOH industry. "Technically, DS and DOOH are exactly the same as a controlled computer or screen,” describes Julian Simons, chairman of the BVDW focus group Programmatic Advertising. The only difference is that the 1:1 relationship between content and viewer is missing, as the content is broadcast to several people simultaneously. The content on DS and DOOH screens is not advertised on a bid basis but in the form of Programmatic Guaranteed Deals: Prices, volumes, layouts, contents and the positioning of the advertisement are determined in advance through individual negotiations. Once a DS or DOOH screen is connected to the internet and the marketer has made it bookable via a sell-side platform (SSP), advertisers can book a campaign on it via a demand-side platform (DSP). "At present, however, there are only a few technology providers offering direct advertising on the German-speaking market,” says Simons. Accordingly, his deputy Siamac Alexander Rahnavard recognizes the value of PA in the DS and DOOH industry: "It is not yet a key element. But it's the demand in particular that determines supply. As long as large network agencies prefer insertion order-based media buying to programmatic media buying or execute both simultaneously, the development in the German-speaking market will continue to be slow."
Transparency for all Participants
One of the reasons for the slow development may be the uncertainty about the subject itself and the choice of a suitable partner. To address this concern, market participants operating under the umbrella of the BVDW adopted a Code of Conduct in 2016 that comprises quality standards for the entire value chain along the programmatic media buying. It is intended to ensure that the selected ad spaces are correctly filled at the set terms and conditions. "In the past, some market participants found it difficult to understand this or they interpreted the whole topic differently," states Siamac Alexander Rahnavard. Due to partly polemic reporting, advertisers developed a certain mistrust towards the procedure, although the incidents were rather intentional misconduct and problems caused by ignorance in dealing with the technology. "The CoC was also intended to ensure that, if complaints arise, service providers along the programmatic value chain would be relieved after an independent examination," says the Rahnavard, who, according to its own statement, co-founded Echte Liebe, the first full-service agency for programmatic marketing in Europe, in 2014. The industry wants to be as transparent as possible for all participants in order to ensure sustainable professionalization of PA in Germany. For this reason, immediately after publication of the CoC, the BVDW developed a certification in order to establish a comparable quality label for agencies on the market. It was introduced in autumn 2017 and, according to Julian Simons, closes the remaining gap in the value chain between advertisers and marketers. It evaluates the service provider's working method, know-how and consulting quality. Therefore, the agency must complete an extensive questionnaire on the company's background, the training level of its employees, experience at a technical level, commitment to the market as well as operational, strategic and practical experience. In order to verify the information, references are checked and customers are interviewed. An expert advisory board carries out the certification. Agencies can register by April or October. Once the certification is obtained, the seal of approval is valid for 24 months. "This is due to the fact that the quality of the applications can change," explains Julian Simons, Managing Director of mediascale. In order to extend the quality certificate, the agency must have itself checked again – according to version 2.0, since the criteria are constantly developed in line with new opportunities and requirements. "This is the only way to ensure that the market standard continuously improves," adds Rahnavard. Quality is always on top of the list at the BVDW and its members.
Programmatic advertising is often accompanied by a confusion of concepts. The – technical – sales process between supply and demand side in the form of an auction is referred to as "real-time bidding". The term "programmatic buying", however, is applied to the demand side only. This means that advertising companies comply with the technical requirements, i.e. use a demand side platform. The counterpart to this is the "programmatic selling" carried out by the marketer. PA is increasingly developing in Germany into an umbrella term that includes all processes, market participants and procedures that connect publishers and advertisers with each other.
Julian Simons is chairman of the BVDW focus group Programmatic Advertising and managing director of the Munich agency mediascale.
Siamac Alexander Rahnavard is co-founder of the PA agency Echte Liebe and deputy chairman of the BVDW focus group Programmatic Advertising.
Published in Digital Signage Magazine (digital-signage-magazin.de, available in German only). By courtesy of WNP publishing house.