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ExchangeWire: Fundamental Shifts in Programmatic: Q&A with Luke Fenney, Index Exchange

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In this exclusive interview, Luke Fenney (pictured below), vice president, publisher sales, international, Index Exchange, speaks with ExchangeWire on the future of the programmatic industry, and what the various underlying fluctuations affecting the sector mean for all players involved.

Which channels are set to benefit most strongly from prioritisation of data-driven thinking? How can these be incorporated into existing “programmatic models”, and by contrast where does programmatic need to adapt to the channel in building a full media-buying strategy?

Over the last decade, we’ve seen web and app-based environments benefit the most from programmatic trading. The real-time bidding protocol was originally built to solve the monetisation of web-based display advertising and has evolved tremendously since its initial release to support various formats across a range of environments, including connected TV and digital out-of-home.

However, the protocol is just one piece of the puzzle. A number of digital channels have legacy buying models and specific nuances that mean further adaptation is required to ensure the value of programmatic trading is realised. Nuances we see in other channels that require innovation include pricing models, commercial terms, payment flow, user identity, creative approval processes and guarantees.

What does the future of programmatic look like in web-based display? What opportunities for new tech solutions lie here? Is the “open web” set to become an outdated concept in terms of advertising?

First and foremost, I think it’s important to address the myth that the “open web” is going to become obsolete — it’s evolving, but it’s not going anywhere. If anything, the open, Trusted portion of the web is going to become more powerful as web-based display moves away from its reliance on third-party cookies. This is the time for web-based display to reinvent itself, to break free from the hindrances of third-party cookies and embrace new, people-based marketing solutions.

That said, consumer trust is going to play an integral role in the open web’s survival: we like to describe it as “tomorrow’s currency.” Both buyers and publishers must earn users’ trust before they can benefit from first-party data and people-based solutions.

How is the media buying supply chain set to evolve over the coming two years? Who is set to benefit, and what type of providers will have to adapt their business models?

We’ve known third-party cookies were on their way out, but now we have a clear timeline and expiration date in place. In two years’ time, cookies will play a much smaller role in media buying and ad trading, and that’s going to dramatically change the way our industry operates. We’re also seeing a lot of positive shifts in terms of bringing greater transparency to the supply chain and ecosystem (e.g. initiatives like sellers.json).

For these reasons, we expect that the providers who will most benefit are those who are focused on trust and technology, e.g. those who are dedicated to building Identity-based frameworks that prioritise consumer privacy above all else.

How is the shift from retargeting to focusing on data activation and automation set to address long-standing problems in the industry, such as the lack of user trust in the industry?

Retargeting is one of the most basic forms of targeting and consequently, it’s scaled massively over the last ten years. Moving forward, retargeting will still take place with data activation, but on a different scale and through a different process.

Consumers still want to receive relevant advertising, but more importantly, they want greater control over their data and privacy. The future of our industry will lie on crafting strategies that appropriately prioritise these consumer needs: Consumer privacy and user consent comes first, then come opportunities for relevant, resonant advertising campaigns.

What should be done to encourage both brand marketers and publishers to embrace the programmatic-is-everything theory, to ensure that the future industry works for the benefit of all players?

Simply put, programmatic allows publishers to monetise and marketers to reach consumers more quickly and effectively than virtually any other method, bringing greater efficiency to any and every digital transaction between buyer and seller (regardless of the environment). The key is in ensuring that consumers also understand the benefit it’s providing.

From our vantage point, the key to building a sustainable, successful future for programmatic will involve prioritising consumer privacy above other interests, as mentioned. If publishers and marketers are able to earn consumers’ trust (and clearly communicate the value exchange between advertising and content to their users), we expect consumers will gladly opt-in. Trusted, premium players will be those who most benefit in the long run.

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