A reality check on the reported state of programmatic
As I read the IAB’s recent report on programmatic, I can’t help but reflect that the majority of our industry continues to define programmatic from the publisher’s perspective. There is a prevailing, limited focus on the automation of inventory sales, and whatever basic information is available to enhance the value exchange between buyers and sellers.
Any given programmatic opportunity is predicated only on information provided by the publisher, and thus tends toward mere demographic attributes, often presumed by these publishers rather than identified or measured. Ironically, in our growing world of audience-based buying, custom, targeted audience models are lacking. Static segments and demographic data remain the norm.
What a different proposition it is when the data used to execute the programmatic ad buy isn’t that provided by the publisher, at all, but richer data available on the individual. We should not care theoretically where the ad is, but rather exactly to whom the ad is targeted, personalized, delivered and then optimized. This is a radical rethinking of media, even the programmatic definition reflected in the recent IAB report.
Further, I don’t doubt that the big growth area for programmatic is outside the Open Auction, an emerging opportunity pinpointed in this report. It’s becoming clear that we’ll see more movement toward Private Auction, Unreserved Fixed Rate or Automated Guaranteed environments. Direct sales will continue to deteriorate and be replaced by programmatic buying. At least for now, those buyers who still think in “direct-buy” terms will be more comfortable with these other types of programmatic buying, which are fundamentally attempts to keep it similar to direct sales. Those matter for buyers who remain concerned with where the ad is shown more than to whom.
Another short-term advantage of the hybrids is that the Open Auction without the user targeting (which we should all be advocating) is fraught with issues of bots, viewability, and other forms of fraud. The hybrids can help assuage those concerns, but certainly not eliminate them, as every site has bots, including the big ones. Longer term, I see everything being Open Auction, but think the short-term burst will be in the other variants as direct sales declines, mostly due to buyer comfort zone.
The reason Open Auction eventually will win overall is that buyers will come to appreciate the value of the “whom” – to whom an ad is being shown, regardless of where. “Where” is secondary. Most media buying, including programmatic, has it backwards, prioritizing where over who.
The main issue with valuing “where” over “to whom” is that you end up targeting non-humans. Why do you think the media is so cheap and plentiful? Second, the most valuable consumers you should hope to reach for your campaign might never go to the sites you think matter. As a result, you end up serving a lot of your campaign to non-humans, and skip serving the campaign to the humans who are the best fit. You can see the inefficiency of the current norm for buying.
As we continue to report on our industry, I’d love to see the IAB take this more future-looking approach. Emphasizing the static norm does not advance the opportunity. As we evolve beyond the interim hybrid solutions, it will be because we evolve our approach to audience-based buying. We’ll actually come to care about audience and work with ad solution providers who can help us model, target and serve to those audiences.
Niels Meersschaert is chief technology officer at Qualia