Simon Harris (pictured below) is a programmatic director at iProspect; here, he writes exclusively for ExchangeWire about the ways in which programmatic has irrevocably changed the way that online advertising is bought.

Now an established way of buying, programmatic has moved away from being a 'strategy' on a plan, to a way of doing business. Programmatic has not only changed the way thought-leading agencies trade media, it has disrupted the traditional linear planning process in three ways:

1. Improving the quality and availability of data that is used when planning
2. Reducing the risks and costs of testing new ideas
3. Increasing the cadence of iteration

The old model

Cast your mind back to the planning cycle of old – most of the heavy lifting would be done upfront. A client would present the agency with a brief, on which a communications planner would work with the research department to painstakingly craft a response. The response would include extensive input from channel experts on the correct mix of media partners, and once the plan was approved, activity would be booked with monthly, or quarterly, insertion orders (IOs) and optimised sporadically, usually fortnightly inline with client calls.

It’s easy to scoff at the inefficiencies of this process, but it is not so long ago that this was the way media business was traded.

Data availability and quality

Programmatic creates an abundance of data that can be continually fed into agency planning processes, creating an amazingly detailed feedback loop. This ensures that at the start of each planning process, the team has an accurate picture of what has previously worked well for a client, regardless of whether it is a new campaign or a new budget cycle for an old campaign.

It means that the media buying decisions, that were once based on data from sales pitches and opinion, have been (rightly) consigned to history. Instead, we rely on data. If the planner on the account wants to know the best time of day to reach an audience, or how often they should show them an ad, they turn to the data; for it is within the data they will find the answer. If they want to know what the most effective strategies are or what their client’s current customers look like, no problem, we have that data too.

Availability of data has demonstrable benefits, but there are softer, more subtle, advantages. One being that in a process where different opinions are commonplace, the process will be much more meritocratic, conversations and decisions are grounded in data.

Reducing risk

The second way in which programmatic is changing the agency planning process is that it is making it much more iterative. The cost of experimentation has fallen dramatically, so there is more scope and opportunity to test new ideas. A few years ago, the cost of failure was high. A monthly buy or homepage takeover that didn’t achieve a brand's objectives was a significant problem, irrespective of the depths of the client's pockets. Because there are no upfront commitments in the open marketplace, the cost of testing, say, an algorithmic lookalike model versus a hand-built third-party index model is much lower. Put simply, if something doesn’t work, we switch it off. This reduces the financial risk to brands, meaning they are more willing to test.

Increased cadence

Increased flexibility to test, learn, and adapt has changed how agencies plan and is strengthened by the ability to iterate quickly when transacting programmatically.

Optimisations are no longer something that happen on offline timescales, or at the pace at which third parties are willing to move, we rapidly prototype strategies and test and iterate them as quickly as we can. This approach, coupled with machine learning that makes buy/pass decisions on billions of impressions in the bid stream each day, delivers results that would have been unobtainable in the near past. This approach requires a different mindset, and skill-set. Increasingly planners look like less like the planner buyers of old and more like those who once sat in the research department. Programmatic is not only changing what the agency planning cycle looks like but also the employees themselves.

What does the future look like for the agency planning process? As client-side use of DMPs increases, and programmatic moves away from being a mechanism to deliver incredibly effective online advertising campaigns to infrastructure for advertising in general, it will become a way of delivering optimised, omni-channel, cross-devise, single-consumer journeys.

Communications planners who work closely with programmatic specialists will be at the forefront of managing this incredibly exciting frontier for ad tech. A leap forward that will require a shift in mindset from top-down, big-idea strategy, to something that is more grounded in detail, but equally creative.