Programmatic Buying in India-The Challenges and the way out

 The digital space has always been evolving. With each passing day more and more agencies, ad networks, SSPs, and DMPs are adding to the already cluttered space across the web and the mobile domain. New technologies have started coming forth to help declutter this space and hence add value by claiming to understand your target audience in a much better way and effectively target them to get the desired results.

Programmatic buying is one such technology. It uses Real Time Bidding Technology (RTB) through a Demand Side Platform (DSP) to buy relevant impressions (even for that matter a single impression) on any website where your audience is present (which is based on data analytics). A DSP is integrated with many ad exchanges and replaces media buying with Audience buying.

It is a very old technology dating back to 2003 in West. But it is being used in India since last couple of years. The programmatic buying industry is at a very nascent stage in India. There are many companies which have started providing such services (GroupM-Xaxix,OMD-Accuen,Publicis’s Vivaki,Komli-RDSP,MicroAD-BLADE) along with Sociomantic, Cadreon and Vizury. Some of them are pure DSPs while others operate as Trading Desks. There are many US companies also which are operating remotely in India.

But it still hasn’t picked up the way it should have been. It is still taking time for the marketers and agencies to understand the true benefit of DSPs and start replacing their traditional way of media buying with it. The programmatic buying industry in India is going through a very challenging phase.

Let us look at the current challenges for Programmatic buying in India and the way out or elements which still hold a brighter future for the same.

Challenges

1. Attempts to adopt programmatic buying have risen over the past but they are too fragmented to yield any positive results. Companies in India providing these services are currently operating in silos. Some of them are either doing retargeting, or just exchange buys (Reach Campaigns) while still others trying to specialize in audience targeting and so on. This is augmenting the already cluttered space and creating dissonance in the minds of advertisers and agencies.
2. With too many players vying the same space the minimum bidding price (eCPM) in India also tends to go up for the same audience. This makes the task of achieving the success metrics a little too tough.
3. Programmatic buying is all about bidding impression by impression and hence eCPM is the most common metric on which the billing should take place (as happens globally). But in India, companies have started working on CPS/CPC and even CPA models to suit the Indian Advertisers and Agencies. This further does not help advertisers/agencies reap the exact benefits of Programmatic buying as it affects the overall scale.
4. Being a technology-driven process, it involves little human intervention which makes it hard for advertisers to assess the quality of the inventory being bought. This, coupled with fraudulent clicks and bots, makes it difficult for both publishers and advertisers to rely on programmatic completely.
5. Lack of transparency and trading of remnants act as hindrances for brands. During the early phases of programmatic many years ago, it was primarily used to offload unsold inventory or remnants. While this is no longer the main utility of programmatic buying, it continues to keep cautious advertisers at bay.
6. Indians have been used to direct selling, neither the marketer nor the publisher seems keen on an automated system. In fact, some of the agencies still do not have the complete knowledge of how programmatic buying works. Some have opined that every time they opened programmatic selling they have not generated much revenue.
7. There is lack of experts and expertise .There is not enough push by clients because, obviously, most of them do not understand the concept. Also, most clients are more comfortable with fixed rates that reservation-buying allows them. There is a perception that reservation-buying allows clients to manage funds better and get a good deal. Marketers are also getting increasingly result-focused in their campaigns.
8. Some smaller agencies might find it difficult to either invest money to develop their own bidders/DSPs (Demand Side Platform), or might not be having additional workforce to deploy if they choose to work with an existing DSP technology provider on a SaaS solution. Or they simply do not have the complete knowledge to take either step.
9. Data is of primary essence to programmatic display, because it makes it possible to better understand, predict and influence customer buying behaviour. There is an overall lack of supporting service infrastructure within the advertiser teams which can make it difficult for advertisers to provide the user data needed to drive more efficient and effective programmatic campaigns. For instance many of them do not have their own Data feed etc or have no idea about something like that.
10. It requires handling a lot of data, analyse, create intelligent algorithms and provide meaningful insights to the advertisers, hence it will breed experts. These experts will have to work hand in hand with the media planners. Initial dearth of such specialists also pose a challenge.
11. Publishers are often hesitant to sell their premium inventory in an open bidding process but are willing to work via private deals. It’s a challenging task to educate and convince the client to use programmatic buying. Publishers have their own reasons to resist- losing control on their premium placements, earning less revenues due to RTB (real time bidding), integrating their premium inventories liked fixed buys or sponsorships.
12. A lot of brand marketers in India expect features like rich media, brand safety and premium placements, which are still not available in API based programmatic buys. Until programmatic moves away from plain banner-based ads and incorporates these rich features, we don’t see a lot of brand marketers adopt it. Marketers feel unsold inventory is recycled most of the times through programmatic. It is partially true, especially in case of publisher side or Supply Side Platform (SSP).
13. The Indian market is probably where the US was in 2007, maybe even before It's a very early market and there is still a lot of hand-holding that we have to do. Advertisers are definitely excited about RTB, but I would not say they are willing to put the money into it. Certain types of clients, like the finance and travel categories or ecommerce, there is a pretty large percentage of money that goes into digital advertising, but for the rest it is probably less than 2% that goes into digital. 

Programmatic Buying in India – Positive Signs Ahead 

Programmatic buying is big in the US, a $7.4-billion annual business. In India, it's already worth around Rs 2,000 crore, about two-thirds of the annual Rs 3,500-crore digital advertising spend. Digital ad spend is growing at 30-35% annual growth and programmatic buying will account for a large share. 

1. Education: Most of the experienced RTB and programmatic-focused companies must educate buyers and publishers about the value and opportunity. India's growing Internet population would seem to make it a prime market for RTB and programmatic buying. But the country is not necessarily an early adopter market, and so ad technology companies bringing programmatic there have to invest significant resources in education.
2. And as time spent online increases, so does the number of ads users can be served. In its report on India, comScore found that in India, users spent an average of only 28.4 minutes on retail sites in June 2013 -the lowest of the BRIC countries. This leaves room for growth.
3. Native Advertising is making inroads now. Today one can even buy native advertising programmatically in many markets. One of the best thing about programmatic is that it is just a mechanism to buy ad inventory and so it can be applied to any type of inventory, whether it is display, video or even social. The key to programmatic is to understand your audience and apply those understanding to different types and formats. In fact, native advertising is perfect for programmatic in some ways because you can not only customize your audience but also the creative.
4. There is a trend that all the revenue or rather the inventory being bought over the networks will slowly start diminishing and all that advertising money will start moving towards RTB and programmatic. We will see foreign companies entering India who have adopted programmatic in their other markets. They will by default demand programmatic ad trade services for their Indian operations.
5. Programmatic buying for many agencies may not only ease the process of buying, but will also add value to their product line if they can disseminate the relevant knowledge within their organisation. Agencies and marketers who have worked on search or Facebook-based advertising will be natural fits for programmatic buying.

1. Efforts should be made to first understand the Indian market as its hugely different than Japan or West where benefits of Programmatic Buying have been clearly understood and established. Steps should be taken to modify or tailor the platform (Localise or customise), if required, to suit Indian Advertisers’/agencies’ expectations. Simultaneously, lack of education also breeds setting false expectations by the DSPs. The companies should train their staff in expectation management with regard to the correct success metrics that can be delivered by this technology. 

1. For Brands : Agencies require greater control over the platform in a sense where they can assure clients of brand safety and one in which can help them tap premium inventory or Native Ads or other rich media ads. 

1. In India , out of the total internet population 83% access internet through mobile.Increase in internet usage through mobile has further given a Philip to the social media platforms.Hence, the need for even mobile RTBs have become very relevant. 

The future lies in programmatic buying. It will become a one stop solution for delivery of all kinds of digital/mobile ads (banners/rich media or videos)across web or mobile platforms for the time to come. The need of the hour is to educate the market, adapt to the ever changing requirements and plan to localise and customise. This has immense potential to deliver value to both advertisers and publishers alike.