Head to head: What’s holding back further investment in programmatic?

Programmatic trading has come on in leaps and bounds with continued focus on transparency, viewability and brand safety. But what unresolved barriers are still holding back advertisers?

The Drum caught up with a cross-section of experts from across the industry – a publisher, advertiser, agency, exchange, ad network and programmatic platform – to get their views on what will boost advertiser investment in programmatic.

The publisher: Jim Freeman, group sales and trading director, Telegraph Media Group

Full transparency and a wider understanding of the benefits of programmatic will help boost it into the mainstream. Revenues will follow. With knowledge comes trust and if you trust the results then you will invest according to your KPIs.

That’s all pretty basic stuff, but I think this phenomenal growth area of media is some way off. Today, I have been deep in conversation with an agency about their client’s positioning in the paper. If we didn’t get it right then the ad would not be placed. This is not an unusual day. In fact, it is a typical conversation for any agency negotiating with mainstream traditional media owners.

Why is it, then, that 100 per cent focus goes into securing a centre break in Downton Abbey, placements in the front half of newspapers or a spot in drivetime on radio, but when it comes to digital these practices are largely ignored?

The hype tells us that programmatic means ‘narrowcast’ is possible at scale (if that makes sense). So far, so good, but the reality is very different and seems to be driven by efficiency and a drive for cheaper pricing rather than any strategic directive from the brand.

Allied with the ongoing issues of fraud and viewability, it is vital that all sides of this equation are better educated on where the majority of current revenues are ending up.

The scale and complexity of digital means that there are specialists, sales houses, exchanges, joint ventures and networks to sift through, and some of them may be licensed and some may not. But whoever you choose to work with you cannot always verify 100 per cent that the end product was genuine or the environment right. The truth is that it is easier to be a fraud in digital.

The industry has only been trading this way for a few years, but technology moves faster than people can learn. Were I an advertiser, I would want the comfort of knowing I am choosing the right people to run my proagrammatic strategy, and I would want to know that they’re the right ones because I asked the right questions when I hired them.

Programmatic can be an amazing tool. But only when clients ask the same questions of their agencies that they’ve always done for other media.

The advertiser: Sammy Austin, head of programmatic, MoneySupermarket

Education around programmatic is still, and will continue to be, an industry-wide issue.

Although we are running our programmatic activity in-house, we are still faced with it as an ongoing challenge as we try and understand the value in our campaigns and request for additional investment for testing.

I think one of the most important things for instilling confidence internally is to not over-promise in what you think the activity is going to deliver and not to test too much at once. We have historically tested one product channel at a time and different types of strategy for each.

Even though there are a lot of agency trading desks out there educating their clients, I don’t think advertisers are necessarily being educated enough.

One of the issues we are facing is that every time a new product or feature is released, all of the benefits are discussed, but no one ever mentions the limitations which usually surface when the campaign is live and this creates a lack of trust. A lot of the time it’s quite easy for third-party vendors to simply focus on selling the product rather than having a conversation about what can or cannot be achieved.

Transparency is really closely linked to trust and education. For example, advertisers are not necessarily made aware that viewability is an industry-wide issue. I think third parties can be a bit conservative about reporting back on viewability figures because the concern would be that if you said to an advertiser ‘your viewability rate is 40 per cent’, they would potentially stop their investment with you.

But if the education was there and advertisers were taught about the fact it’s an industry-wide issue and it’s being addressed by all the relevant parties, they wouldn’t necessarily react in the same way.

Programmatic is quite a new concept, so if an advertiser has a lack of understanding it’s easier for them to say it hasn’t worked.

The agency: Chris Camacho, managing partner, Precision Marketing, SMG

From an agency perspective, a major barrier to entry to boosting advertiser investment is simplicity. Programmatic advertising is an incredibly complex world, built around confusing terminology, with limited understanding as to how it actually works. Advertisers with backgrounds in traditional media buying can feel like they are entering into a black hole when talking about programmatic.

The key is to break down these complexities for our clients, so that they clearly understand how programmatic advertising can transform their business. A great example of this simplification is how Facebook is now referring to its users as ‘people’. It is these simple shifts in communication which allow programmatic advertising to become accessible across all disciplines; changing the way that media is bought and consumed.

At SMG, we have developed an approach to programmatic buying which allows us to open up the conversation of programmatic buying across our entire client portfolio; making the realm of programmatic advertising digestible by talking less about ‘data, data, data’ and more about ‘precise consumer targeting’.

This makes programmatic investment a fundamental part of media planning, as opposed to a terrifying prospect.

The ad network: Cameron Hulett, executive director, EMEA, Undertone

Programmatic trading is the new normal, with research showing that eight out of 10 buyers actively employed it in 2014. Programmatic’s roots lie in enhancing the efficiency and effectiveness of standard display ads. The demand for mobile, video and creative high impact formats is helping to raise the bar. Getting further advertiser investment in programmatic will depend on offering increased format options and offering a wider variety of ways for advertisers to transact them.

The conversations I have with advertisers and agencies consistently reveal that they use programmatic because it offers better targeting and efficient pricing, especially through their trading desks, however brand safety still plays on many minds. Marketers are thinking with their wallets; they want good environments for their ads but it’s equally important to them that their impressions aren’t wasted by never being seen. The time has come for automated guarantees to be combined with quality inventory and format choices.

Programmatic is definitely moving beyond standard display. Marketers and agencies are going beyond the banner, buying a variety of ad products programmatically, and publishers are doing their best to supply all of them. There is a strong and growing market for mobile programmatic, pre-roll and high-impact and native may also be emerging as an option.

If an ad unit exists there is a programmatic demand for it. Certainly this trend will continue. The problem is that as we move away from standard formats ‘real-time execution’ becomes more and more difficult. So, to speed it up, let’s be cognisant about how we use the word ‘programmatic’.

To become more programmatic, we have to move beyond ‘real-time execution’ and ‘real-time bidding’ and start focusing on how we deliver an automated campaign from start to finish. This includes creative build and management, publisher management, process management and, only after all of that is done, real-time delivery.

The exchange: Phil Miles, director, Media Buying Solutions, Google UK

The adoption of programmatic buying in the UK has been impressive, putting us on the map as one of the most advanced ad-tech markets in the world. Still, for those chief marketing officers that need a bit more convincing before shifting budgets to automated buying, here are some areas that Google and the industry are working on and which will make you shift the dial.

Make measurement transparent

Investment in better and more actionable measurement will play a key role in attracting more marketing budgets to programmatic. Brands want to have the same confidence in programmatic as they do in traditional direct buys.

Attract premium inventory

The next few years will see more publishers serving premium inventory via programmatic. Giving publishers more control over how and to whom they surface inventory will encourage more premium outlets into programmatic, giving advertisers more and better content choice.

Address the skills gap

As technology evolves faster and faster, one of the reasons budgets lag innovation is lack of expertise. As an industry we need to invest in new skill sets, particularly data and analytics in order to be able to draw actionable insights from data sets that can then be activated programmatically.

Win clients’ trust

Like it or not programmatic has an image problem with regards to fees and margins. The ecosystem as a whole needs to address this to convince advertisers that buying media in this way is an effective use of their budgets.

Speak in plain English

Ad tech is complicated and the industry is good at talking to itself in three-letter acronyms. For marketers to shift more quickly to programmatic, we all need to do a better job of explaining the opportunity in terms that make sense. Many chief marketing officers still don’t get it largely because the industry hasn’t found a way to explain it.

The programmatic media and technology platform: Caspar Schlickum, chief executive, Xaxis EMEA

Frankly, I don’t really like what this question implies: that there is something inherently good about programmatic, which should therefore be targeted for increased investment.

Programmatic refers to a way of buying and/ or executing media. One type of programmatic, real-time bidding (or buying) has grown into an industry buzzword and clients brief their agency to ‘do RTB’. They expect to see RTB of some form on their media plan or you get a cross in the innovation box.

Rather than just rushing headlong into programmatic, think about its use cases. You want intelligent application of data but what data, and do you have your data strategy sorted? You may wish to cherry pick impressions so that you only spend money on the ones you want but is that consistent with your media/marketing strategy? Finally, where and at what point do you apply the programmatic magic?

RTB is not necessarily always the answer. Most of our clients expect their agencies to procure them the best media at the lowest price (this holds true regardless of whether this is bought programmatically or not). You can’t do that in in an open RTB auction, no matter how buzzy the acronym.

Instead, consider applying programmatic to the decisioning (maybe let’s call it RTD?), so that you have confidence in the inventory your ad will appear on but still have the benefit of an intelligence-driven audience buy.

So before you rush into programmatic, ask yourself why you are doing it, and whether you and your provider have a clear data/inventory and technology strategy and the right people needed to execute the campaign in a way that is consistent with those reasons.

This feature was first published in the 4 February issue of The Drum, as part of a special digital trading focus.

There’s still time to enter The Drum Digital Trading Awards, as the entry deadline is 13 February. If you have questions or are looking for more information about entry, please contact the event manager at katy.thomson@thedrum.com or visit digitaltradingawards.com.

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