3 Trends Driving the Fragmented Evolution of Programmatic

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When we first began leveraging programmatic buying 10 years ago, consolidation was a core objective of growth. As programmatic evolved, consolidation remained at the forefront, with initiatives like private marketplaces and programmatic guarantee giving advertisers the opportunity to pool a large percentage of media into one platform. Consolidation also offered the ease of buying and management, even across traditionally non-digital channels like Linear TV and OOH.

Today we’re seeing the erosion of consolidation due to a number of developments in the industry, leading to fragmentation.  Below are three key trends we’re tracking as this evolution gradually unfolds:

  1. Walled gardens — The original fragmentation

Walled gardens position themselves as a “one-stop-shop,’” allowing advertisers to leverage their platforms for unique inventory, audiences, measurement and even reach beyond their walls. While some have succeeded (DV360) and grown (Amazon), it’s not a guaranteed approach (Facebook’s sunset of Audience Network). Walled gardens attempt to offer a consolidated solution, but they ultimately force fragmentation because further opportunities will always lie within another walled garden.

  1. The emergence of specialized platforms 

Despite omni-channel DSPs’ (demand-side platforms) and walled gardens’ best efforts to consolidate budgets, specialized platforms are resurfacing. Emerging platforms like Roku and, most recently Hulu have launched to focus on premium connected TV inventory.  From a buyer’s perspective, understanding the benefits and agenda of each platform becomes increasingly important in the search for a balanced strategy. In the case of Roku, they are looking to increase overall inventory yield through a DSP acquisition. With Hulu, the launch of a self-serve platform specifically for SMBs opens its inventory to new advertisers.

  1. Shift from cookies exacerbates fragmentation

Google’s shift away from third-party cookies by 2022 will remove consistent identifiers across environments, causing further fragmentation, particularly as we look to utilize walled gardens’ first-party persistent IDs. In addition, further measurement fragmentation follows as clean rooms and siloed measurement options become the new normal.

Agencies and advertisers must plan accordingly

Today, we set unique goals and strategies for a mix of complementary platforms based on their differentiating features and strengths to drive maximum value for clients. Fragmentation will lead to a number of increased concerns.

Agencies will be forced to evaluate talent and allocate resources differently, affecting client contracts. Flexible buying through a variety of methods will lead to platform fatigue, making it harder to get agency buy-in because of the increased decision-making required. Self-service programmatic may begin to lose its appeal. Investment levels and contracts will grow more complex, raising the question of numerous siloed contracts or one consolidated DSP relationship. In the end, we’ll face a choice between one consolidated platform with possible shortfalls or a large breadth of platforms.

Advertisers need to re-evaluate the goals of their paid media strategy. Is a presence with all of the walled gardens necessary from a data and/or inventory perspective? Is a presence outside of the walled gardens needed in any capacity as the reliance on third party cookies shrinks?

Many of these answers will be guided based on industry verticals. CPG and e-commerce focused businesses will continue to rely on walled gardens like Amazon that allow them to leverage first-party purchase data.  Financial services advertisers will likely focus on data and inventory opportunities like Verizon or Google that find consumers in a need state for financial products or advice. Travel advertisers will continue to leverage a different type of fragmented approach that leans heavily on partners like Expedia and TripAdvisor.

As the conversation around a future without cookies continues and new platforms arise, agencies and buyers need to be ready to pivot as the industry does. And, because fragmentation continues to shift quickly, advertisers should lean on agency partners’ expertise to remain at the forefront and guide them through these shifts.


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