Madmen, Welcome to the Machine

Madmen, move over…

Process improvement often (although not always) comes about through the substitution of humans by software and/or machines. The most iconic examples of this are robots in factories replacing workers doing things like painting or welding cars. More often today it is software in the form of decision-support applications that are replacing people. Here is one example of that trend.The automation of online ad buying is rapidly increasing. Marketers use programs to target consumers based on data from activities such as web-browsing. The size of machine-based purchases is projected at $7.4 billion in the U.S. representing 53% of the $14 billion U.S. market for display ads. Motif Investing reports:

You know something is gaining traction when we’re comfortable enough to start taking the human element out of it.

Earlier this week, the Wall Street Journal reported on the phenomenon of computer-automated purchases of online advertising. In this system, marketers use computerized programs to target users based on consumer data and Web-browsing histories. This programmatic buying started as a way for Web publishers to sell lower-value ad inventory, but it is gaining traction as companies get comfortable with the idea of using automated systems in the buying and selling of premium inventory.

It’s now, according to the Journal, one of the hottest trends in advertising, with marketers eager to find efficiencies and eliminate waste by having their ads reach the right consumers. However, this trend is really just part of a secular move by online marketers into data as a main tool of their business. A study by the Direct Marketing Association recently declared that the data-driven business of online marketing in the US is now worth $62 billion.

And, as the Journal noted, the offline and online worlds are blurring: Direct mail companies buy demographic information from digital data brokers, while Twitter and Facebook offer user data to television broadcasters.

The Wall Street Journal reported

“Digital media has reached scale and a level of standardization where you can trade it as a commodity,” said Vincent Letang, executive vice president of global forecasting at Magna Global (an advertising research and buying firm).

Automated ad buying is one of the hottest trends in advertising. Marketers are eager to find efficiencies and eliminate waste by having their ads reach the right consumers.