Home to a bustling marketplace for automated media buying, Australia is widely seen as a global leader in its adoption of programmatic. However, with its increased sophistication, comes higher expectations for better tools and an abolition of undesirable market practices. In this week's industry byliner, TubeMogul's Australia and New Zealand managing director, Sam Smith, gives a rundown of local market development and what brands will expect from local ad tech players.

Australia has become a hotspot for automated buying, after coming out of the gates three years ago, and surprising the global advertising industry with the pace of programmatic adoption. The market also exudes sophistication and innovation, for one that serves only 23 million people. Since then, most of the major ad tech vendors, exchanges, and agency trading desks have set up operations in the country; which has became a testbed for experimentation and risk-taking.

The Australian programmatic advertising market is the most advanced of any in Asia-Pacific and, in many cases, leads the world with innovations, savvy trading methods, and smart techniques aimed at maximising video branding results.

A recent report from the Boston Consulting Group confirmed this, stating that Australia benefits from a sophisticated structural system, and a high concentration of programmatic skillsets. In other words, Australia is a small market, but the industry is nimble, creative, and the agencies are committed to promoting programmatic buying.

The local industry has applied every market model, whether it's real-time bidding, private marketplaces, or programmatic direct, resulting in a dynamic market that has taken the best of the US – and beyond – and finetuned it to its own unique Aussie advantage.

Nearly AUD$500m is likely to pass through programmatic display and video platforms in Australia this year, as digital consumption skyrockets and traditional advertising channels see slowing revenue. In the course of the rollercoaster journey, marketers – in tandem with their agency trading desks – have pushed the utility of programmatic platforms, demanding that the technology tools keep pace with increasing industry requirements.

In the early days, the battle to secure high-quality video inventory challenged platform providers and agency trading desks. As a result, Australia became an early adopter of programmatic direct as a trading mechanism, as trading desks sought to deliver premium inventory. It also heralded an understanding among brands that realised they did not necessarily have to make expensive upfront commitments.

The supply of available video inventory has since gathered pace. Local publishers have made available more advertising inventory across desktop and mobile, and more audience data is being infused into campaigns. With the proliferation of trading knowledge into the marketer community, the onus on publishers to deliver quality inventory has increased.

Media buying agencies also are directing more client spend from television to online video in a bid to pursue audiences, and programmatic platforms have secured a fair chunk of these budgets.

Higher maturity means increased brand scrutiny

However, with industry maturation comes increased scrutiny from brands that are concerned about the quality of the advertising inventory they are buying. In a market that changes constantly, the go-to market model must be rid of ambiguity around fees, ad network-style inventory bundling, and black-box practices.

The other major burning conversation revolves around transparency and independence, particularly, the dangers of walled gardens – and I believe this will come to the fore in the next few years. Brand advertisers that we work with want their media buy to be divorced from their trading strategy. We call this 'independent media decisioning', and while it may not roll off the tongue, it is becoming a major request item from brand advertisers.

With increased market knowledge comes an obvious quest for media efficiency. Marketers are now constantly asking us to help them make informed investment decisions about their media mix. They don't care where the audience is. They just want to reach the right demographic for their product, regardless of whether it involves a buy on desktop, mobile, or tablet. The science of programmatic is coming to the fore as brands test, learn, and evolve their trading strategies, and switch to an always-on mode that ensures their budgets are optimised.

In the meantime, new innovations are disrupting the digital video advertising landscape. Earlier this year, for instance, programmatic buying of digital out-of-home advertising arrived in Australia via our partnership with SiteTour and Cadreon.

Programmatic buying of linear television will follow soon, making the biggest screen in the house automated and more precise in its targeting. The advent of programmatic TV, where the free-to-air TV networks take an active stake, will herald the arrival of true cross-screen trading, taking desktop, mobile, as well as the largest screen, into the household.

As more programmatic data is created, and campaigns become even more sophisticated, the next phase will see advertisers becoming more vocal about getting closer to the software and platforms that are helping them make an impact. Brands will want to own their data and the intelligence that can be extracted from these datasets. They will increasingly ask: "What is the right percentage of investment for each screen, and are we reaching the right audience?"

As these questions are raised, and presumably answered with satisfaction, expect to see a rising number of household brands flick the switch to making programmatic a large part of their digital media mix.