The Programmatic Globe: US

Our head of Global Advisory Services goes deep on the state of programmatic and e-commerce in the US

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Here at Sociomantic, we’re lucky enough to get to work with marketers in over 60 countries, helping them from our 19 offices around the globe to take advantage of the many benefits of programmatic advertising technology powered by local market expertise. In working across these diverse regions, one thing has become crystal clear: when it comes to e-commerce and programmatic marketing, no two countries are alike! And no one has a better view on the differences and eccentricities of these different markets than our VP Global Advisory Services, Lothar Krause.
That’s why we’ve invited him, with support from each of our local teams, to share unique, market-specific insights about the ins-and-outs, the ups-and-downs, the triumphs and challenges of programmatic advertising in each of the countries or regions that we are stationed. Next up: United States!

When Sociomantic launched US operations with an office in New York City in November 2012, we had already launched our first US campaigns and gained valuable knowledge and insights from serving UK advertisers, a market that remains closely related. Since then, our US team has expanded to include offices in Chicago, San Francisco and Dallas in order to provide more local support to customers in each region of the country. Home to some of the world’s largest advertisers, the United States is a market with a globally unique set of opportunities and challenges.

Below are a few characteristics that define the market and our experiences there.

A Massive Market

By any measure, the US market is massive. There is more advertising spend in the country than anywhere else in the world. In fact, according to eMarketer, the US will eclipse $180 billion in advertising spend this year, or nearly one-third of the worldwide total. While only a portion of this is dedicated to digital, it is clear that advertising plays a critical role in the promotion and success of US brands. It’s important to note these advertising dollars are spread across a large geographical area, as well.

The volume of advertising spend can partly be attributed to the fact that marketers are challenged to reach a digitally savvy population in the US. Market research firm comScore estimates that over 172 million US consumers own a smartphone, while 93 million own a tablet device. These technology adoption rates have led to a largely multi-platform market, requiring marketers to reach the same consumer across many different devices and channels. While mobile once was just a piece of the digital advertising mix, it has quickly become a priority over the last two years.

Adaptability is Key

Though we were founded in Berlin, we internationalized relatively quickly; therefore, adaptability was a key component of Sociomantic’s approach to the greater European market. From the beginning, our service and solution had to meet the needs of dozens of different cultures, languages and local market challenges. Likewise, when we came to the US, we found a very large market with a great deal of diversity of client needs within its borders.

Though culture and language don’t vary drastically across the US, it holds true that no two shoppers are the same. The above-mentioned size and fragmentation of the market has created significant variations in the strategies adopted amongst marketers. From small e-commerce advertisers to large, multi-channel brands, the goals and preferences when it comes to programmatic technologies are often unique. In addition, American brands are famous for their adoption of the service slogan, “The customer is always right,” and the B2B market is no exception! There is no one-size-fits-all technology model that can be used in the industry. American advertisers require highly customized services and solutions to meet their specific needs.

Related to this adaptability requirement is the rapid pace of innovation adoption in this market. In order to remain competitive in such a crowded marketplace, brands know they must constantly be improving. With consumer preferences and behaviors developing at the same same rapid pace as consumer technologies, marketers are always looking for ways to better address their audiences by leveraging the latest innovations.

A Dedication to Highest Brand Standards

Some of the world’s most recognizable brands, from Apple to Coca-Cola, hail from the US. Culturally, marketers recognize that a brand has to stand for something and connect with consumers beyond product-level satisfaction in order to be successful. The development, preservation and promotion of brand values cannot be overstated for marketers in this country.

As a result, there is a tension in the US between brand and commerce. While European companies often put performance first, US companies hold strict brand standards as the top priority. Balancing brand interests with performance goals is a challenge. While advertisers want to drive incremental revenue and growth, they will not sacrifice any part of the brand experience to do so. With a constant evaluation of short-term ROI versus long-term brand investment, many brands seek technology partners that are able to reach users across the full purchasing funnel to unite these branding and performance marketing goals.

Fierce Competition

Known as the “birthplace” of real-time bidding technology in 2009, the US is home to dozens — even hundreds — of technology companies dedicated to the digital advertising arena. The opportunities created by the sheer size of the market have attracted millions in venture capital and investment. While these investments have driven constant innovation and progress in the industry, they have also led to a very crowded landscape.  In a dizzying array of logos, the infamous LUMAscape illustrates the dozens of SSPs, exchanges, social networks, DSPs, agencies, trading desks and more that are competing for the same advertising dollar.

With so many players offering related services, it can be difficult for brands to navigate the jargon-rich advertising industry with confidence. So, where do they turn for help?

Agencies Are the Gatekeepers

Agencies dominate the US advertising landscape, in part because brands find it so difficult to understand the industry without consultancy. While some brands have a more hands-on approach to their digital strategy, many brand teams are structured to assume an external agency will handle the creation and distribution of advertising.

In order to help them navigate the fast-paced digital advertising industry, agencies have adopted a culture of testing when it comes to technology partners. These tests, often complex in nature and held over long periods of time, are meant to ensure agencies are delivering the best possible results for their clients. While the end goal of superior performance for marketers is the same among client-direct and agency relationships, we’ve learned that the working relationships between them can be quite different. In order to work equally well managing both brand and agency relationships, vendor communications and service strategies must be tailored for each.

While the nature of this landscape may not change immediately, there is an ongoing debate in the US advertising community about the role of agencies. Should advertisers rely on them to manage and execute their entire digital ad spends, or should brands have in-house teams overseeing strategy? While we certainly don’t see a future without agencies, it is likely their relationships with brands will evolve as the digital ecosystem matures.

The Next Frontier

The US advertising industry is only projected to grow in the coming years, and this is an exciting time to be part of a fast-moving, innovative market. JB Brokaw, President North America, shares his outlook on the future of the market:

“As U.S. advertisers continue to adopt the latest technologies, they are gaining more control and understanding of the value of each interaction they have with a customer. By taking a data-driven approach to their marketing strategies, they have the opportunity to communicate in ways not possible before — creating new, meaningful experiences for customers and prospects and driving long-term loyalty for their brand. We’re excited to continue working with our parent company dunnhumby and with our clients to achieve these new levels of personalization across devices and channels.”

While the US market is maturing, the size and complexity of the market remains challenging for today’s marketers. It’s clear the technology companies that are able to combine meaningful insights and performance with superior customer service will be the long-term partners of choice for US advertisers.


Check out previous posts in the Programmatic Globe Series:

  1. United Kingdom
  2. France
  3. Turkey