Programmatic Buying: Where Do We Go From Here?
The Curse of Oak Island, History Channel's long running TV show chronicles the Lagina brothers search for buried treasure on a remote island off the coast of Nova Scotia. After eleven seasons, the brothers and their team have yet to find a horde of gold, the holy grail, or the ark of the covenant all which legend suggests were buried on the island.
In many respects, the plight of the Lagina brothers can be likened to advertisers and their search for advertising "gold" through the use of programmatic buying. With the promise of greater efficiencies, better targeting, and improved effectiveness programmatic buying has yet to deliver on those aims. To the contrary, a multi-layered, often opaque supply chain, increased intermediary fees, lack of measurement standardization, and persistent fraud have negatively impacted advertisers' investments in this area.
Yet over half of ad spend is going toward digital media (64 percent in the U.S., according to Marketing Dive and 68.9 percent globally according to Insider Intelligence and Oberlo). Further, most marketers know little about how those investment decisions are being made on your behalf when it comes to programmatic.
According to the Association of National Advertisers (ANA) recent Programmatic Media Supply Chain Transparency Study of the estimated $88 billion in open web programmatic ad spend "around $22 billion is wasteful and unproductive."
If you are alarmed by that number, you may want to engage your media team and agency personnel in dialog around the questions suggested by the ANA in their report. Below is a sampling of the suggested queries:
- Ask why Made for Advertising (MFA) websites are utilized, as they are largely useless for growth-oriented strategies.
- Ask why they "spray and pray" across 44,000 websites per campaign when less than 5,000 will probably be sufficient.
- Ask whether the agency is acting as principal or agent. If they are acting as principals, are your brands getting the best media deals possible?
- Ask why they have not already embraced log-level data, a principal pathway to more effective decision-making with programmatic media.
- Ask if they are fighting fraud optimally. Or better yet, ask if they know where to look for fraud and how to fight it when they find it.
The stakes are too high for advertisers when it comes to their continued and escalating investment in this complex area. In the words of twentieth-century American scientist, Alan Perlis: "Fools ignore complexity. Pragmatists suffer it. Some can avoid it. Geniuses remove it."
Now is the time to "turn up the heat" as it relates to advertiser demands of their media supply chain partners and the need for greater accountability around the issues plaguing their programmatic investments.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Cliff Campeau (MBA, PCM) is principal at AARM (Advertising Audit & Risk Management), a marketing transparency accountability consultancy and compliance auditing firm based in San Francisco, California. Campeau is a frequent blogger on topics related to optimizing advertisers' return-on-marketing-investment through enhanced contract compliance and financial stewardship initiatives.