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Is Programmatic Buying Better Than the Devil We Know?

May 5, 2016

For years we all have heard about the media buyer who just wants to get the buy off of their desk. They look at a ranker and get proposals from the top ten stations, and end up buying those five that come in with the lowest CPP. Format does not matter, nor does what the station means to the community. Most damaging is the failure to consider if these stations’ listeners are right for this particular account.

You can’t place all the blame on the buyer. They are overworked and don’t have the time or the direction to do what is most advantageous for their client. So the client may not get the results they were hoping for. Obviously this negatively impacts the client, but it is also ultimately bad for the radio industry.

At the NAB Show, I attended a very interesting presentation on programmatic buying. Although it focused on digital advertising, the concept could be adapted to radio.

Your human buyer will look at Nielsen’s numbers and, if we are lucky, Scarborough or some other source for qualitative data. Conversely, before a programmatic buy is placed, the system reviews numerous data sources to match up the product or service being sold to the right consumer base. It asks the question, “Who are the listeners and are they right for what I’m selling?” Everyone on the panel of this session said that they would be willing to pay a “super-premium” to reach the right consumer. In other words, achieving the lowest cost per point is not always priority one. How often is a present day buyer willing to pay a super-premium because your station reaches the right consumers? The simple answer: not often enough.

One of digital’s advantages on this front is, with big data, advertisers can target individuals. However, the same big data should eventually determine that, instead of an individual, a radio station delivers the ideal audience. If that happens, the right radio station will be bought at fair price. Most importantly, the client will get the results they desire, which is beneficial to our industry.

Without these extra layers of data, programmatic buying may just be a negative auction, with everyone dropping their rates to get on the buy. This concerns many of us. However, if implemented correctly, stations that deliver the right audience will benefit. Most importantly, the allure of basing decisions on simply rank and a low CPP is diminished.

Like most things in the world, details and implementation are critically important.

Let’s just make sure it is better than the devil we know.

-Charlie Sislen, CRMC, Partner