A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

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Programmatic: The Shifting Paradigm Of Digital Marketing Introduction We are living in the age of the consumer. What does that mean, exactly? It means consumers are more empowered, as they hold more sway over their purchase journey. Consumers can easily compare prices and critique products and services before they get to your website or store. They can also make borderless purchases from anywhere, at their own convenience. As a result, marketers today are struggling to compete, differentiate, and successfully reach consumers during key junctures of their buying decision-making. With that in mind, marketers often ask themselves, “How do I win in the age of the customer?” Despite all the challenges marketers are facing, there is an answer to the above question: “Programmatic marketing.” 1 Programmatic is the way to become more relevant to customers on their multiscreen, multidevice journey. By harnessing the insights of data-driven, digital media buying decisions, marketers improve their ability to provide timely, contextual, and relevant content. They better reach and retain customers as a result. In January 2016, MediaMath commissioned Forrester Consulting to evaluate the current trends, challenges, and benefits of programmatic media buying practices. This profile is based on Forrester’s own market data and a custom study of 300 decision-makers with responsibility for marketing and media buying in Australia, Japan, India, Indonesia, Malaysia, and Singapore. Survey respondents included were all at the manager level or above and mostly from business-to-consumer (B2C) industries with annual revenues of USD $25 million and higher (see Figure 1).

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

2

FIGURE 1 Survey Demographics — Location, Company Revenue, Industry, And Role

“In which country do you currently work?” (Select one) (Showing respondent count by country) Singapore; 50

Australia; 50

Malaysia; 50

USD $1 billion or more

Japan; 50

India; 50

Indonesia; 50

“Which of the following best describes the industry to which your company belongs?” (Select one) Other; 20%

“Using your best estimate, what is the approximate annual revenue?” (Select one)

USD $500 million to $999 million USD $250 million to $499 million USD $100 million to $249 million USD $50 million to $99 million USD $25 million to $49 million

30.3% 11.3% 12.0%

15.3% 9.0%

22.0%

“Which of the following best describes your job function?” (Select all that apply) Strategy

83%

Customer intelligence/ analytics Media planning and buying

Financial services; 11%

78% 63%

Creative Online services/ eCommerce; 14%

Travel/ hospitality; 21%

53%

“Which title best describes your position at your organization?” (Select one) C-level executive Vice president

Retail; 34%

Director

Manager

Base: 300 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

10.7% 4.0% 35.0%

50.3%

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

3

Consumer Expectations Have Changed, And Digital Media Buying Must, Too In the age of the customer, people have access to more 2 media, on more devices, than ever before. Over the past decade, B2C marketing organizations have had to rethink their business models as their customers and prospects migrated online. To respond to the changing media practices and technology, Asia Pacific marketers are increasingly turning to programmatic buying to understand how this digital media buying approach supports their overall media buying strategy. Our survey found that almost 41% of respondents in Asia Pacific have adopted programmatic buying (see Figure 2). Companies in Australia (48%), Japan (46%), and Singapore (46%) lead with programmatic marketing adoption — a reflection of programmatic marketing maturity in these markets. As expected, the programmatic buying adoption level is higher in more digitally mature markets such as Australia (48%), Japan (46%), and Singapore (46%), compared with other markets like India (38%), Malaysia (36%), and Indonesia (30%). Marketers in these countries have found that programmatic buying affords them better performance, cost effectiveness, and operational efficiency, which we will address in a later section. The programmatic adoption gap between more mature and less mature countries in the next 12 to 24 months will shrink

as marketers in those markets plan and evaluate programmatic buying to win, serve, and retain customers. In addition, there are healthy signs that programmatic buying adoption will continue to be strong in Asia Pacific. For example, 46% and 40% of respondents in Australia and Singapore, respectively, are either planning to adopt or currently evaluating whether to adopt programmatic buying. More than half of marketers in the less mature countries, such as India (52%), Malaysia (58%), and Indonesia (56%), indicated that they are either planning to adopt or currently evaluating whether to adopt programmatic buying. Our study also found that a low percentage of marketers in Australia (6%) and Malaysia (6%) have no plans to adopt programmatic buying methods, compared with Japan (14%), Singapore (14%), Indonesia (14%), and India (10%). The key reasons for these marketers not using programmatic buying include the complexity of the technical implementation (56%), ongoing management of campaigns being outside their core competency (53%), and not having a skilled agency partner that can help them use it (47%). This suggests that some marketers are uncomfortable with the digitization of media buying, fearing its technical complexity, and they may need help understanding how to use programmatic buying as part of their overall media buying approach. It also suggests the opportunity for an external partner to help them understand programmatic buying.

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

5

FIGURE 2 Australia, Japan, Singapore Are Leading With Programmatic Buying Adoption In The Region “Which of the following best describes your firm’s use of programmatic buying?” No plans to adopt Australia

Currently evaluating whether or not to adopt 6%

Japan

14%

Singapore

14%

India

Malaysia

Indonesia

10%

6%

Not yet adopted, but planning to in more than one year

18%

14%

10%

14%

16%

48%

46%

14%

46%

14%

22%

26%

Adopted

16%

20%

24%

14%

14%

10%

18%

Not yet adopted, but planning to within one year

38%

12%

20%

36%

10%

30%

Base: 300 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

Marketers Are Assessing Programmatic But Facing Tough Challenges Our study found that over 48% of respondents are either planning to adopt programmatic or are evaluating it. This indicates that many nonprogrammatic users are bullish about programmatic adoption in the next 24 months. The key reasons marketers cited for not using programmatic are that they:

1) plan to use it but haven’t had the time yet (54%); 2) find the technical implementation too complex (50%); 3) don’t have an agency partner to help them use it (41%); and 4) don’t have the skills to use it (39%) (see Figure 3).

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

5

FIGURE 3 Time Constraints And Technical Complexity Are Key Barriers To Programmatic Adoption “What are the reasons for not using programmatic buying?” (Select all that apply) Plan to but haven’t had the time yet

54%

Complexity of technical implementation

50%

Don’t have agency partner that helps us use it

41%

Don’t have the skills to use it

39%

Ongoing management of campaigns is outside of our core competency

33%

Don’t believe the value proposition

29%

Don’t understand what it does Other

27% 1%

Base: 178 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

Interest In Programmatic Buying Expands Beyond Online Display Our study results show that better performance, cost effectiveness, and operational efficiency are the top three considerations by marketers for choosing programmatic buying. Marketers are seeking effectiveness and efficiencies in choosing programmatic marketing campaigns, as programmatic marketing helps them boost contextual targeting, reduce waste, and provide timely and relevant content to their audience across multiple devices. Our study results show that online display (85%), social (85%), online search (75%), and mobile (62%) are the formats mostly used by programmatic marketers in the past

Marketers see video as a way to improve engagement and target niche audiences. The use of online video will increase by almost 13 percentage points in next 12 to 24 months.

year. The use of these formats will increase in the next 12 to 24 months, with 93% planning to use online display, 86% planning to use social, and 75% planning to use mobile (see Figure 4). Marketers who have adopted programmatic marketing practices cited online search (45%), online display (44%), and social (39%) as the most satisfactory formats. On the lower end of the satisfaction spectrum are media channels such as online video (14%), television (15%), and mobile (23%).

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

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FIGURE 4 Programmatic Buying Trends Across Different Formats

“In what format have you done programmatic buying in the past year?” (Select all that apply)

“What is your preferred format for programmatic buying in the next 12 to 24 months?” (Select all that apply)

Online display

85%

Online display

Social

85%

Social

Online search

75%

Mobile Online video

Television

62%

75%

Online search

73%

Television

46%

86%

Mobile

Online video

49%

93%

62% 51%

Base: 122 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

For Those Who Use Programmatic Buying, Satisfaction With It Is High Eighty-two percent of respondents using programmatic are either satisfied or highly satisfied with the investment in programmatic technology. This shows that marketers understand the business benefits of using programmatic marketing as a supplement to traditional marketing practices. To further reap the benefits of programmatic marketing, 96% of existing adopters plan to continue investing in programmatic technology in the next 24 months (see Figure 5). Ninety-six percent of marketers using programmatic marketing practices intend to continue investment in programmatic technology in the next 24 months.

Our survey results show that marketers who have yet to adopt programmatic practices will likely invest in programmatic technology in the next 24 months (see Figure 6). Eighty percent of marketers with an adoption plan intend to invest in programmatic technology in the next 24 months. Approximately 70% of marketers who are currently evaluating programmatic practices (whether to adopt or not) do intend to make investments in programmatic technology in the next 24 months.

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

7

FIGURE 5 Adopters — Higher Satisfaction Leads To Strong Investments In Programmatic Technology

“How satisfied are you with your investment in programmatic technology?” Neutral

Satisfied

Programmatic buyers 16%

“Do you intend to continue investing in programmatic technology in the next 24 months?”

Highly satisfied 56%

Programmatic buyers "Yes"

26%

96%

Base: 122 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

FIGURE 6 Most Planners And Evaluators Intend To Invest In Programmatic Technology In The Next 24 Months

“Do you intend to invest in programmatic technology in the next 24 months?” Currently evaluating whether or not to adopt Yes

70%

Planners

80%

Base: 146 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

The Benefits Of Programmatic Buying When we asked marketers about the potential benefits of programmatic buying, their top three responses were: 1) better contextual targeting (53%); 2) faster execution (48%); and 3) real-time optimization (46%) (see Figure 7). In fact, over 98% of respondents listed these three benefits as important to some degree. The respondents also cited dynamic placement (36%) and managing multiple channels (33%) as important benefits of programmatic buying.

Interestingly, they rated decreased cost (29%) low in importance on the list of benefits. This indicates that Asia Pacific marketers value the right attributes of programmatic buying. They aspire to be more relevant, quick, and targeted in order to continually impress and connect with customers and prospects, rather than focus on how cheaply they can secure ads.

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

8

FIGURE 7 Better Contextual Targeting, Execution, And Real-Time Optimization Are Key Benefits Of Programmatic Buying

“In general, how important are the following potential benefits of programmatic buying, on a scale from 1 (not at all important) to 5 (very important)?” (Showing only “very important” responses) Better contextual targeting

53%

Faster execution

48%

Real-time optimization

46%

Dynamic placement

36%

Managing multiple channels

33%

Decreased cost Buy direct from media

29% 19%

Base: 300 decision-makers across Australia, Japan, Singapore, Malaysia, Indonesia, and India Source: A commissioned study conducted by Forrester Consulting on behalf of MediaMath, February 2016

Conclusion In a world of heightened consumer expectations, progressive marketers have to drive a holistic media buying approach, with programmatic being the foundation of the plan. Already, marketers in Australia, Singapore, and Japan are experiencing better targeting, optimization, and other benefits that programmatic tools deliver. Even marketers who have yet to adopt programmatic buying agree that it will improve contextual targeting in campaigns. The next step for these marketers is to learn more about programmatic and collaborate with industry partners and agencies to learn how they can make programmatic a driving force for their marketing strategy.

Methodology This Technology Adoption Profile was commissioned by MediaMath. To create this profile, Forrester conducted a computerassisted telephone interviewing (CATI) survey of 300 decision-makers with responsibility for marketing and media buying. The custom survey was completed in February 2016.

A Custom Technology

April 2016

Adoption Profile Commissioned By MediaMath

9

Endnotes 1

Source: “The State Of Consumer And Technology: Benchmark 2014, US And Technology: Benchmark 2014, US,” Forrester Research, Inc., January 16, 2015. 2

Source: “Winning In The Age Of The Customer” Forrester Research, Inc., April 6, 2015.

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