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Direct Response Marketing

Procter’s Programmatic Buy Might Help DR

11 Jun, 2014 By: Doug McPherson

NEW YORK – Advertising Age has reported that Procter & Gamble wants to buy up to 75 percent of its U.S. digital media programmatically by the end of 2014. Analysts say such a significant investment from P&G could reduce the negative perceptions of direct response advertising (programmatic has been commonly associated with direct response).

The move might also mean bad news for agencies. Insiders say P&G’s announcement could have a significant impact on how P&G uses its media agency – Publicis’ Starcom MediaVest Group – because P&G does its programmatic buying in-house. Bloomberg has reported that Apple is taking more of its advertising in-house.

But Brian Wieser, senior analyst at Pivotal Research Group, told MediaPost News he doesn’t think the new items are omens for the industry at large.

“Growing numbers of brand-based marketers either operate or are establishing in-house trading desks for the digital media they buy programmatically. [And] while there is some logic to this approach for many marketers … over time, we only expect a minority of brand-based marketers to eventually bring programmatic trading in-house.”

Wieser mentions the difficulty of getting specialists to relocate, securing the ongoing investments needed to operate a trading desk and keeping pace with larger agency trading desks as a few reasons to be worried about the long-term sustainability of brands bringing ad tech in-house.

Programmatic has been on an upward trend. Casale Media reports marketers doing their own programmatic buying accounted for 11 percent of all spend on U.S. marketplaces in first-quarter 2014, up 267 percent over fourth-quarter 2013.

P.J. Bednarski, a writer with MediaPost News, says no other programmatic buying method – such as through an agency, via a trading desk, or using a manage service/network – grew as fast quarter-over-quarter as marketers using in-house tech. But Casale’s report included both brand-based marketers and direct response marketers, and the importance of the P&G news is that it’s on the branding side.

Bednarski adds the other side of the equation is learning how P&G will spend up to 75 percent of its U.S. budget on programmatic. “I’m assuming the majority of this spend will come through programmatic direct channels rather than real-time bidding, though perhaps the more important question is where the supply will come from,” Bednarski writes.

Wieser has said P&G is basically saying, “If you want to work with us, you’re going to supply to us.”

So P&G appears to be forcing the hand of publishers, but Wieser reckons those publishers are prepared for it. “I’m going to guess there’s probably not very many suppliers who [P&G] really care about that they couldn’t get,” Wieser said.

He added that while they might not like it, he would be surprised to learn of a major publisher that hasn’t seen the inevitability of programmatic. He believes P&G could help “move a lot of people along” in terms of how programmatic is utilized by brands.

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