Advertisers to increase programmatic spend by 11% despite trust and attribution concerns
The World Federation of Advertisers (WFA) has surveyed top marketers, learning that programmatic budgets will grow by 11% in 2018 despite ongoing industry concerns around transparency and the "murky" media supply chain.
Programmatic spend to rise 11%
Last year, Procter & Gamble chief brand officer Marc Pritchard put the issue on the industry agenda, calling for greater transparency in a digital supply chain he called "murky at best, fraudulent at worst".
Nonetheless, the WFA, with partner Dataxu, surveyed senior marketers at 28 companies spending in excess of $50bn globally on marketing at the close of 2017.
It found that programmatic budgets are expected to rise 11% from 17% of total digital media investment last year to 28% in 2018. In North America, this spend will go as high as 31%.
Although there were some discussions around reduction of programmatic budgets, most marketers said they would continue to invest more. Furthermore, 86% of respondents are prioritising new programmatic formats like digital out of home and TV, with 77% saying they will increase spend in these areas.
This year, transparency was a major gripe with marketers wanting to know exactly where money is going and if the ad impressions legitimate. 45% of the respondents said they believe they have a fully transparent relationship with their programmatic partners while a further 41% said that increasing transparency with programmatic partners is a major priority for 2018.
While the lion’s share of marketers are going to get further involved with programmatic only 7% admit that they have a suitable attribution model in place.
Despite some efforts from the duoploy, the walled gardens of Facebook and Google continue to impair marketers’ ability to measure the effectiveness of ads. Two thirds are looking for more changes allowing third party measurement and attribution and only 10% believe they have already addressed walled garden and data access issues.
And then there’s the impending implementation of GDPR. 83% of respondents are making sure their programmatic processes are fit for GDPR when it comes into play in March 2018 but despite the looming deadline, only 10% say they are ready on this front.
One marketer said despite the uncertainty, it will "dramatically increase spend this year".
Pete Markey, marketing director of TSB, said focus will be on retargetting known audiences. On its performance, he said: "I see that programmatic works best from at the sales end of things. From the brand perspective I don't think it is at the stage to take away from some of the volume channels."
To ensure the growth continues, there must be an improvement in the attribution models, he said: " There is a noise around it and worries. More and more bad press damages the credibility of programmatic, nut now there is wide pressure on the ecosystem to get better at attribution.
"I would like to see attribution improve. Those involved in selling programmatic will want it to get better. There will be more pressure from clients, marketers and media agencies too."
And finally, he shrugged off any impending threat from GDPR implementation: "For us, GDPR helps reinforce the fact we value customer data and how it is used. It is a good opportunity for us to reinforce our brand and values. Some businesses are feeling gloomy about it.
"This is all about a value exchange, customers want to interact with brands that add value to their lives."
Meanwhile, Matt Green, global lead of media and digital marketing at the WFA, said: “In terms of its public relations with the wider marketing community, it’s fair to say that 2017 hasn’t been a great year for programmatic. But there’s too much momentum now, and in spite of the issues, clients do generally see the benefits – brands will spend a growing share of their digital ad budgets in programmatic in 2018. But that doesn’t mean they can’t take action to improve the ecosystem in which they operate."