Blog The Future of Programmatic is Modular

The Future of Programmatic is Modular

Posted on Feb 12, 2019

Advertising is highly populated – as any look at the Lumascape will confirm. But a healthy ecosystem is marked by diversity as well as numbers.

If some of biggest recent questions raised in ad tech have centred around the challenge of commoditisation, the answer can only be that more customization is still needed.

The general focus for innovation right now is another potential issue. And that is on one-to-many adaptations – effectively tech differentiating itself from other tech. In this way, two competing brands using the same platform may not see any advantage – indeed, some have argued such features end up only redirecting spend between competing platforms, while neither brands nor publishers see any upside.

One-to-many adaptation attempts are the more common then, but that’s not to say they’re the only form of innovation in ad technology. On the other side, we have one-to-one customization. This is what we call a modular approach.

A Brief History of Makers and Modularity

The Maker Movement can trace its roots back to the birth of the personal computer, which itself grew out of DIY enthusiasts and ‘homebrew’ computer clubs. Essentially, it’s all about encouraging active creative use of technology – finding and building innovative new uses for it – instead of passive consumption, which has become the norm.

One popular example of this is build-it-yourself computer and circuit board companies like Raspberry Pi and Arduino. With a little dedication, you can make anything from an automated cat feeder, to a fingerprint-activated garage door. Ultimately, what you learn is that tech can be adapted to pretty much any use you can think up. Or put differently, the fundamental modularity of computers.

But why is this so important? In the work market of the future, it’s widely predicted that creativity will be among the most in demand skills. Little wonder then that many Silicon Valley tech leaders’ children are enrolled in a school that apparently teaches sock knitting and candle making.

But it’s not just in the Maker Movement we see this trend. The real benefits of modular tech are all around us – whether it’s in customizable mobile phones or high-end PC projects. Or even with high efficiency modular home developments, that are increasingly popular.

Modular Programmatic and the API

Back to ad tech, if there’s one thing that promises to usher in a golden age of customization, it’s the application programming interface. The rise of the API is for platforms like switching from individual cement bricks that don’t stack up, to Lego blocks that fit and work together, to make all kinds of different things.

Some startups have based their entire business on this model – successfully too, in the case of Mulesoft – eventually acquired by Salesforce for more than $6bn. For advertisers, modular is not just being able to plug into the best third-party provider of cross-screen analytics, contextual targeting, or whatever the latest in demand feature happens to be. It is one-to-one, having the freedom (and indeed the resource) to build custom features that fit your particular industry niche, buying requirement, customer, legal or privacy need – the list goes on.

What could modular programmatic setups look like on the ground? One obvious, yet often underused example might be developing a custom metric to measure and optimize campaigns. Going beyond clicks or even more sophisticated actions is well within the realm of modular possibility. For an airline, that might be actual seat sales. For a bank, accounts opened or investments made by existing customers. It sounds basic, but the truth is few advertisers have access to such custom metrics, but only because one-to-many innovation is still the norm.

There’s also an argument that brands could be served better around how their data is handled in general. Right now, they might hold insights on the effect of location, weather, events, or any other number of factors on purchase habits. But being able to act on them to alter their media buying accordingly is another thing. But if bidder, CRM and CDP can talk to each other via API, it stands to reason this may be one step closer.

Much has been made in the past few months of the in-housing trend. Admittedly, there is still some disagreement on its definition. But the discussion still points in one direction: brands are getting more discerning in how they approach programmatic buying. With greater understanding, the next stage is in building a truly differentiated approach.

If modular buying catches on, it’s not unimaginable we could start to see more diversity coming to the ad ecosystem. And with less commoditisation, better results too. It may even mark the start of a wider shift to skill over scale.