AOL on the “technology tax” of programmatic

Penzer: Says companies could lose money by not understanding the landscape

Penzer: Says companies could lose money by not understanding the landscape

The programme for Advertising Week Europe is crammed with talks on programmatic buying. Noel Penzer, AOL UK’s managing director, tells us the hype around programmatic is justified, but some publishers have lots money after seeing it through “rose-tinted glasses”.

“So why’s programmatic a dominant force? To put it simply, it works for advertisers and it works for publishers,” Penzer writes.

“Why? For advertisers, they offer a more targeted and predictive approach to brand buys, due in part to higher-quality inventory and premium programmatic. For publishers, programmatic technologies offer new and unprecedented opportunities to capture demand well beyond the reach of an in-house sales team. Taking all of this into account, why wouldn’t we expect programmatic to grow, especially when digital is now the single biggest advertising medium in the UK, making up £3bn of the market during the first half of 2013?

It’s a fallacy to think that premium and programmatic can’t go hand in hand. Effective automation can lead to better results whilst simultaneously freeing up resources to focus on creative planning and execution.

Programmatic formats are rapidly evolving and there’s no doubt that some advertisers and publishers have viewed the programmatic market through less than rose-tinted glasses.

A big part of this lies in the fact that the automated landscape that has never been more chaotic, confusing and complicated. At AOL our current estimates indicate between £2.3 – £3.5bn will be lost on the multitude of ad technologies sitting between the advertiser and the publisher. We call this a technology tax, where as much as 58% of a client’s spend will be lost to mid-market feature-led companies.

This is why AOL has announced its plans for a new global programmatic advertising platform for brands, agencies and publishers. For the first time, ONE by AOL will streamline the digital advertising process across all screens from a single platform, creating an open and unified ecosystem that will make programmatic trading a valued option for advertisers and publishers alike.

Of course, advertising isn’t a one-size-fits-all proposition. But education and simplification are key because programmatic tools, used well, simply take the busy work out of routine buying and allow for better execution and ROI across the board. Buzzword? Yes. Dominant force? Definitely.”

Penzer is chairing AOL’s Agency trading desks look at programmatic session

When? Wednesday 9:45am – 10:30pm Where? David Lean Room