All About: Programmatic buying in India

Despite the promised benefits, why hasn't it taken off?

Swapnil Shrivastav, VP – ad tech, Times Internet, explains targeting audiences via programmatic techniques with an example. He notes, "If I've been reading articles about Nexus 5 and I’ve been marked as having read those articles in so and so newspaper online, this opens a scope of being able to catch that user on NDTV or HT etc. No other process but programmatic allows this."

So what is it? Programmatic buying has existed in a very basic form at a global level since 2003. It can be simplistically described as a real time, audience buying mechanism which is based on data analytics and almost completely driven by technology.

Atique Kazi, director, Xaxis India, defines programmatic buying as, "Creating an algorithm-based automated strategy wherein the combination of the right supply is used by the advertisers to reach the relevant audience." This is done by gaining insights about what people are interested in. Advertisers have to reach the right user with the right message at the right time on the right platform for which one needs market insights, which are in the form of unstructured data. The data, in order to be processed by analytics, needs to be structured which is where data management platforms (DMP) come in. Kazi summarises the process into four points: “Understanding your own data, technology, right inventory and analytics". The programmatic trading ecosystem is split broadly amongst advertisers, publishers and a trading body all of which operate within a real time bidding (RTB) environment.

Programmatic in India is a fairly recent phenomenon going back only a couple of years. It has, however, been operational in the West since 2003 and this has exposed the market conditions required for programmatic to be a feasible audience buying mechanism. Despite gradually increasing digital advertising spends, the Indian media buying ecosystem continues to reflect confidence in the ‘traditional’ buying processes. While there are attempts to move towards programmatic, they are too fragmented to yield any positive results, say stakeholders. Kazi expands on this saying, "Companies in India are currently operating in silos. For example, someone is just doing retargeting, or just exchange buys and so on. What they are doing is cluttering the space and creating confusion."

Be that as it may, India has the advantage of learning from programmatic’s journey in the West and to tailor it to suit the Indian market. Given that it is in a nascent stage in India, Shrivastav voices his concerns about programmatic being unable to break out in a big way. "On the Indian front, every time we've opened programmatic selling we have not generated much revenue," he notes.

Karan Gupta, MD, Affinity, sees two scenarios which will fuel the demand for programmatic buying in India, "One, all the revenue or rather the inventory being moved via the networks will slowly start diminishing and all that advertising money will start moving towards RTB and programmatic. Secondly, we will see foreign companies entering India who have adopted programmatic in their other markets. They will by default demand programmatic ad trade services for their Indian operations.”

The Challenges

Being a largely unexplored is not the primary hurdle in the adoption of programmatic in India. Issues such as lack of transparency and trading of remnants act as hindrances for brands. During the developmental stages of programmatic many years ago, it was primarily used to offload unsold inventory or remnants. While this is no longer the main utility of programmatic buying, it continues to keep cautious advertisers at bay.

Being a technology-driven process, it sees little human intervention which makes it difficult for advertisers to assess the quality of the inventory being bought. This, coupled with fraudulent clicks and bots, makes it difficult for both publishers and advertisers to rely on programmatic completely.

Presently in India, programmatic claims single digit ad spend. Despite the challenges, Gupta is optimistic about the future of programmatic in India. He comments, "A clear measurement of the ad spends for programmatic hasn’t really been carried out. But by 2017, it would definitely be in double digits as far as the overall digital advertising spends are concerned."

By Shinmin Bali on Aug 28, 2014
Source: http://www.campaignindia.in/Article/390081,all-about-programmatic-buying-in-india.aspx
(Published in the issue of Campaign India dated 22 August 2014.)

Copyright © 2006-2017 Affinity Global Inc. All rights reserved.