OMD: half of global digital media buy will be programmatic by 2020

Programmatic buying has been touted as a way to increase the efficiency of the digital ad dollar.  But with the slow spread of digital to platforms other than devices that we use to access the Internet, combined with the continued dominance of TV as a mass market channel, it's hard to see when the adoption of programmatic buying will become truly widespread.Mainardo de Nardis, global CEO of OMD Worldwide believes the development of programmatic buying in Hong Kong is very similar to that in the rest of the world, with data and technology presenting the biggest obstacles.de Nardis said around 5% of ad placements in Hong Kong are bought programmatically, compared to 40-50% in some countries.He predicts ad placements in so-called traditional media, such as out-of-home and analogue TV, will be bought and sold through programmatic in the future."Right now, programmatic buying is used to buy ads on mobile or video platforms.  You will soon see programmatic buying for out-of-home billboards and TV," de Nardis said."An enormous part of our business will be traded through programmatic buying.  Programmatic buying is a journey whereas mobile is a platform or destination.  Programmatic buying is not a big event - it's just an evolution that has already begun and brings us more efficient methods of measurement and content integration."Currently, digital makes up over 20% of the world's marketing budgets, according to de Nardis.  He believes if that spending grows to 30% of total global marketing expenditure, half of digital media buy globally will be conducted programmatically, including digital out-of-home and TV.de Nardis said he expects quicker and more widespread adoption of programmatic buying in Asia compared to Europe or the US because more millennials are present on staff, and Asia is at the forefront of the use and adoption of new technologies.Like any new technology, programmatic buying will begin life in agencies as specialised units, operating separately from the core services of the agency.  The next step is to continue growing the unit and its services until it becomes mainstream and can be integrated along with other disciplines."We need specialists to make new technologies happen because specialists attract specialists.  That's what happened with digital and mobile," de Nardis said.In some markets in which OMD operates, programmatic buying has become so sophisticated that the unit is branded as Accuen.  de Nardis argues that introducing the Accuen brand as the shopfront for programmatic buying services is not necessary for all markets."Client's don't purchase our service because of the brand but for the benefits," de Nardis said.  "Brands were invented for disciplines that have been built over time."He added that at OMD, there are two parallel paths for training people in preparation for the future prevalence of programmatic buying.Training within programmatic buying units are specialised to the discipline with specialists training specialists.  Staff members in other units take part in self-training through OMD's operating system Vision.The assimilation of digital into traditional media"Talking about digital nowadays is like talking about electricity," de Nardis said."So-called traditional media like TV and OOH will be digitised but the product remains the same.  Take newspapers as an example - just because you don't buy and read it between 6am and 7am in the morning, you are still consuming news content on tablets around the clock.  It's still the same product."That's why he believes there is no such thing as digital and TV, seen as a form of traditional media, competing against each other for ad placements.de Nardis predicts TV to follow the same path as newspapers where it will exist in a variety of ways - linear, on-demand, paid, free and promotional."TV will become digital and continue its dominance as a mass-market channel of communication but it will move away from a more linear structure to take on a personal, on-demand structure.  It will be less immediate and there will be less fine-tuning using data compared to social media and video," he said.de Nardis added media brands should focus on building credibility and creating quality content with thinking and added value behind it, going beyond what the audience could find for free somewhere else.Redeeming qualities of so-called traditional mediaDespite the rise of digital and while it may be difficult to truly distinguish between digital and traditional media, there is still value in analogue and traditional media."Digital cannot diminish the importance of so-called non-digital media that are experiential, such as music and sports events.  These will become even more important," de Nardis said."Even if events are integrated with digital, such as the digital distribution of a live analogue event, it's much more difficult to automate events because they require an enormous amount of human judgment."He added TV coverage of live events will remain relevant to audiences, offering great opportunities to engage them."TV is very powerful - think of programmes like the Super Bowl, the Oscars or any sports and music event, history is happening and certain things will always be linear," de Nardis said.In Hong Kong, the development of the next generation of TV and related programmatic trading is gradual."Hong Kong is a strange market.  It's very sophisticated when it comes to new technology and consumers are very sophistciated and cultured early adopters," de Nardis said."But in terms of traditional media like TV, there's not as much of a need to change unlike in other markets because there is less competition.  It's also a relatively small market where distribution is cheap and even the print industry needs less of an evolution and street marketing is superior compared to larger markets like China and India."In contrast, mainland China is ahead of many markets on the video front because in many parts of the country, limited access to TV has pushed brands to engage with customers in a video environment early on."Multi-screen is much more mature in China because there was a need for it," de Nardis said.The future of mobileToday, the word "mobile" summons up images of smartphones and tablets in the mind of an average consumer.However, de Nardis argues mobility is not just about smartphones, using the car of the future as an example."We will start seeing cars acting like smartphones, where in-car interactive systems will act as extensions of the smartphone.  For example, it could use geolocation technologies to engage customers such as by notifying you when your self-driving car is passing your preferred store," he said.Meanwhile, wearables are mobile devices with enormous potential, albeit still under development."In the next few years, wearables will form a major part of technology and marketing but it is still evolving.  There's nothing life-changing happening right now with smart watches and there are plenty of exciting future applications in medicine, health and sports," de Nardis said.He added augmented reality technology that can power wearables such as smart glasses and contact lenses are not yet fully commercial but could be tools for giving customers relevant information in the future.