Over half of all brands are buying digital inventory using programmatic media buying technologies, according to research by the Internet Advertising Bureau (IAB) but there is little understanding across the industry of how such technologies work together.
Coupled with a rise in ad fraud, viewability fears and safety concerns have left many advertisers pointing the finger of blame over transparency at programmatic as it sweeps the floor with manual buying.
The barriers that programmatic have brought down has enabled lots of new entrants to join the market, and unfortunately when you have lots of new entrants to the market you have bad actors, as well as good actors, contributing to the estimated $7.2bn cost to brands this year due to ad fraud.
But programmatic has exaggerated the issue of viewability and brand safety, according to Nigel Gilbert, vice president of strategic development at AppNexus, who said: “viewability was an issue before programmatic” and the investment in ad tech companies like AppNexus means viewability “can now be measured more effectively”.
In an interview with the Drum at the judging of the Digital Trading Awards, Gilbert moved to shift focus on from the issues that have come out of the growth of programmatic, to the dated and inefficient ad offerings from publishers trying to keep apace of digital trends.
He added: “From a publisher perspective, ad serving has not evolved for over 12 years, so the products we have been bringing to market are highly sophisticated compared to what the alternative would be.
“Publishers now have the opportunity to really evolve what they are doing. Publishers are creating their own ad offerings but that is problematic if it is not done in partnership with the buyers. You can’t just create viewable deals and then go to market and hope that people buy them. If you do not develop those in conjunction with the buyer then not only will you be unlikely to monetise that inventory at the rate you would like to, you are also going to create challenges on the buy side in terms of understanding what goals you are really trying to achieve.”
So partnerships now in market are not just important between publishers and ad tech vendors and buyers, but the publisher and the marketer again. Whereas previously technology would have added layers in between those companies, what you are seeing is technology now getting out of the way and becoming “more of an enabler”, added Gilbert.
That’s the view that an ad tech company might take, but a brand can offer a different perspective. When quizzed on paid-for mobile media opportunities at Mobile World Congress this year, Sarah Mansfield, global vice president of media at Unilever, expressed deep concerns about viewability of ads on mobile, as well as fraud.
“Industry standards should be improved. So the AIB standard of 50% ad in view for 2 seconds is just not good enough. We want 100% of an ad in view. So we want a movement in the industry standards that we work to. I am confident we will get there but we are just not moving fast enough,” Mansfield told The Drum.
The challenge with programmatic is that invariably you have to operate between different platforms, which means that the notion of a viewable marketplace becomes difficult if you don’t have lots of people using the same platform. This is why more clients are demanding bespoke viewability solutions.
“Every advertiser should be demanding it [improved viewability] from their media vendors, and more people need to be tracking it. In terms of being able to buy on a VCPN basis, you need to be able to track and make sure that every ad you pay for is in view, by a human rather than a bot. So there is the verification side of it as well that advertisers should be taking more interest in, as well as having conversations with their agencies to make sure the right blacklists are in place to prevent ad fraud, which is quoted to cost companies up to $20 bn every year” added Mansfield.
While viewability is a problem, of course, it is symptomatic of a bigger issue of how websites and marketers are treating people that are using their websites or that they are trying to target with advertising, says Anthony Rhind, chief strategy officer at Adform.
“So whether or not it is poor visibility or non-human traffic, it’s the same issue that there is a poor user experience and that translates to a poor experience for advertisers.
“The industry collectively needs to workout how it can make advertising propositions that are better for consumers and therefore better for marketers. Simplistically that means less frequent and more relevant advertising rather than highly targeted campaigns that often can overdo it in terms of frequency and overt retargeting that annoys consumers.”
Since less than half (45 per cent) of marketers understand how programmatic technologies work, are clients adequately aware of how such companies make their money?
Nigel Gilbert , VP strategic development EMEA, AppNexus: They are adequately aware yes. I would say is there an incentive or a motive for this to become an issue for clients (agencies and marketers). Because it is only scaling to a point now where it is becoming critical, clients do need to educate themselves further about the difference between a media company and a software company. On the sell side, it is a different kind of challenge. I think there has always been a fairly good understanding of how these clients make their money, but at the same time certainly in markets like the UK there has been a requirement to generate incremental income, and programmatic has been added on as a layer rather than a capability - it is still largely siloed and allocated to a business that is giving them revenue in return.
Anthony Rhind, chief strategy officer, Adform: No I don’t think clients are adequately aware. It is essential for clients to understand the business model and whether or not the business model is a direct model where the cost of the ad tech is clearly the foundation of revenue or whether or not there are indirect revenue lines for the ad tech provider that are not related to what the client is paying directly to the ad tech provider. There is no problem for ad tech to subsidise their pricing by having secondary revenue lines, but the client is should take the time to understand how the stakeholders that they are working with are generating their revenue and profit. It is also important to understand the medium term ambition of that company because the consolidation going on in the space means that the stakeholders in the ad tech providers business decisioning could well shift and cause the marketer to reconsider whether or not the company they are working with should be retained as a key intermediary in their decision making about where to spend marketing budget.
The 2016 Drum's Digital Trading Awards in association with theTradeDesk will take place on 4 May, click here for further information. The awards are sponsored by DoubleClick, TubeMogul, Audience2Media, Exelate, Integral Ad Science, Rubicon Project and Sphere Digital Recruitment.