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Programmatic buying: What do the experts say?
October 16, 2013
Published in Portada, this article focused on programmatic buying and features the perspective of Juan Pablo Suárez, Sales Director for Media Desk, a demand side platform created by US Media Consulting to help media agencies with their online media buying in Latin America.
Programmatic buying of digital media is a system for placing digital advertising that is gaining ground in the U.S. and is just becoming known in Latin America.
What do the experts have to say about it? What are the pros and cons of fully computerized media buying? Will it be used in Latin America?
These are some of the questions we posed to Alejandro Campos Carlés, co-director and founder of StartMeApp; Marcelo Montefiore, CEO of Global Mind; Lucio Grimaldi, VP for Latin America at Publicitas; and Juan Pablo Suárez, Business Development Senior Manager, U.S. Media Consulting.
What is programmatic media buying?
Programmatic buying of digital media is a computerized system for buying advertising impressions automatically using data supplied by the advertiser. Programmatic buying is based on algorithms that seek out available global inventories that match what the advertiser is looking for.
The purchase is made via Real Time Bidding (RTB), a concept rarely used in Latin America. RTB is a "digital auction" whereby the computerized platform cranks out bids for desired impressions (based on data provided by the advertiser) in available inventory that matches the advertiser’s requirements. The process is performed constantly in a matter of milliseconds, and the platform then determines which advertiser gets what impressions.
Is this form of digital media buying gaining ground in Latin America?
The automated purchasing of advertising in the region is still in its infancy and agencies, advertisers, and the media are all in the process of understanding this new system.
In fact, programmatic buying has yet to be established in all U.S. markets, although it is quickly moving forward. A study conducted by GLOBAL MAGNA predicts that by 2017 almost half of all digital media buys in the U.S. will be done via programmatic buying.
"Programmatic buying is still slow, as advertisers and agencies are not sharing much information," said Diego Fernández, Director of Media and Digital, North America, for Burger King Corporation, during Portada’s LatAm Summit this year in Miami. "But I think in the next few years it will be very important and good to see more of the same," he added.
"Very few agencies have come forward to ask us about programmatic buying. We have not yet seen any significant inclination towards programmatic buying when it comes to reaching audiences in Latin America and the U.S. Hispanic market," Christopher Stanley, CEO and Founder of Alcance Media, told Portada.
For Lucio Grimaldi, VP Latin America at Publicitas, the development of programmatic buying in Latin America is currently at an early stage but with a clear eye on the future. "I think we are at an early stage, but there will be a very important development in the near future. Programmatic buying in Latin America will no doubt grow significantly in the next few years. Many clients and agencies in Europe and the U.S. began work in this area years ago and it is inevitable that the same phenomenon will occur in Latin America."
Juan Pablo Suárez, Business Development Senior Manager at U.S. Media Consulting, pointed out that "Latin America is going through one of its best periods as an emerging region, where companies of all levels and industries are making investments and the digital world is no exception. We increasingly see new players entering the region and that is helping the concept of programmatic buying to rapidly grow and be adopted, especially in markets where the benefit is immediately apparent, such as in e-commerce. While spending levels [in LatAm] are similar to those seen in the U.S. or Europe about four years ago, the trend is pointing toward double-digit growth for a few years. However, there is still a long ways to go for Latin America to keep up with other regions of the world."