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Programmatic in Malaysia: Blurry with 'concerns over neutrality'

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Two thirds of the world’s digital display advertising (67%) will be traded programmatically by 2019, up from 59% in 2017, according to Zenith’s Programmatic Marketing Forecasts. The value of advertising sold programmatically will rise from US$57.5bn in 2017 to US$84.9bn in 2019, growing at an average rate of 21% a year.Programmatic trading has evolved far from its roots of building cheap coverage from remnant inventory. It now often occurs in premium environments, using private deals in which agencies can use their scale and relationship with publishers to ensure their clients ads are displayed in the right place and at the right price.According to the study, the key to success is the ability to create unique data sets that deliver unique competitive advantages, usually based on first-party data or data partnerships, and to apply these datasets to tailor brand messages and communicate them at the points most likely to move consumers along the consumer journey.For Malaysia, the programmatic market is quite competitive, with many system providers. Well informed digital-focused clients started adopting programmatic buying a few years ago, e.g. e-commerce and telecoms operators. Now other clients are also getting acquainted with the technology. Some agencies have also built their own programmatic systems, and have been aggressively selling them to their clients.The line between agency and supplier is becoming more blurred.Advertisers have started selling their own first-party data, and some major clients have built their own DMPs. In the near future, we see the potential for data-sharing between corporations. Ad server companies have acquired programmatic companies and have bundled their own inventories along with their ad serving facilities (e.g. Sizmek, DoubleClick and Appsflyer, to name but a few).This adds intensity to the competitive landscape, although it has also raised concerns over neutrality.Google may have the largest advantage as it bundles its media inventories from AdWords + DCM (ad serving) + Studio (for creative development) + DBM, and thus is positioned as a full suite offering to clients.Some major and well established publishers have created their own marketplaces such as the Star Online, and Media Prima Digital with its online radio assets.Most agency players are moving away from managed-service and have moved to owned trading desks with self-serve. This is so that they can optimise across publisher stacks and inventory rather than being limited to one or two managed-service options.On the client side, a few are looking to develop test models across multiple networks, publishers and data providers, and are hoping to move to a permanent managed-service partnership with the best performer. This is primarily driven by non-transparent programmatic pricing by agencies. The large volume clients are therefore either demanding a transparent pricing model or moving to in-house partnerships with networks.Currently RTB remains the most popular way to trade programmatically. With more players setting up private marketplaces, though, the market can expect preferred deals to become more common.A key trend is data leverage. Publishers are acutely aware that while inventory might have been commoditised, what will effectively attract a premium is data – the more granular and precise the better. The other key factor influencing publishers are machine learning and Artificial Intelligence, which they intend to automatically optimise trading across different audiences and different objectives. As such, publishers are looking to forward two basic models:Data partnerships andActivation platforms or consoles, which are machine learning-enabled to ensure automated optimisation based on set objectives.Digital outdoor is growing rapidly in urban centres and it is likely to be the first traditional medium to embark on programmatic buying.Embracing traditional programmaticThe study also adds that in Malaysia, traditional media will not be adopting programmatic in the near future. This is despite the fact that programmatic techniques are starting to spread from internet advertising to other, more ‘traditional’ media in the global scene.In most markets this is in the very early stages and too early to forecast, but it is starting to take hold in the US.  Zenith estimates that US$5.6bn will be spent programmatically across television, radio, cinema and outdoor in the US this year, representing 6.0% of total ad expenditure in these media. By 2019 this is expected to rise to US$13.0bn, or 13.6% of the total.“The most advanced display markets will be 90% programmatic by 2019. It won’t be many years after that until the global display market is fully programmatic,” Jonathan Barnard, zenith’s head of forecasting and director of global intelligence said. “The question then is how rapidly programmatic techniques will spread to other media. We will be keeping a close eye on developments in the US as a guide to likely developments in the rest of the world.”“Brands are tying together programmatic technology with unique consumer datasets and machine-learning to optimise their digital communications,” Vittorio Bonori, Zenith’s global brand president said. “This allows them to respond in real time to consumer behaviour and continually improve upon campaign results, delivering greater brand growth.”Programmatic trading is most advanced in three English-speaking markets: Canada, the US and the UK, where Zenith estimates 81%, 78% and 77% of digital display advertising will be bought programmatically this year respectively.  The US is by far the largest programmatic market, valued at US$32.6bn (57% of the global total) in 2017. China comes next, at US$5.3bn. Just 29% of digital display advertising is traded programmatically in China at the moment, so there is scope for plenty of future growth here. 

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