Programmatic Media Buying, or simply ‘programmatic’ is the practice of buying digital advertising using an automated method. This is ad space bought on a web page, either through a bidding process, or as a direct purchase.
It’s been heralded as the future of online advertising, but some of the offshoots of the process leave a lot to be desired. A lack of control and transparency means that agencies and their clients are starting to reconsider the value of programmatic.
That’s not to say it doesn’t have its place.
The appeal is obvious. It is fast and, on the surface at least, efficient.
Previously, an ad could take up to 42 steps to go from its initial conception to its online display. Now, with programmatic media buying, the process takes literally milliseconds.
Web pages have ad space available for hire in real-time bidding and programmatic means you can cut out the middleman – the human media buyer – and save time and money.
However, there are some massive problems with programmatic, the first being its incredible susceptibility to fraud.
Bots and traffic exchanges make it worryingly easy for impressions to be ‘stolen’ and recreated in a kind of digital black market. The internet is awash with fraudulent impressions, which in turn creates a climate of mistrust. This makes it harder to conduct business.
Brand safety is also compromised, as the lack of transparency in the market means that it becomes far more difficult to control the content that is near your ads. This is of grave concern to clients who, first and foremost, pay agencies to project the right image and protect their brand.
A report by analytics company Integral Ad Science released earlier this month, noted a 20.9% decrease in overall and programmatic fraud. Ads in proximity to offensive content such as porn, hate speech or extreme violence, known as “Brand Risk”, also fell from 12.1% to 9.1% in the last quarter (US ads).
The US is leading the way in improvements, but that’s because they still have the worst rate of ad fraud of five countries named in the report. The others were Australia, France, Germany, and the UK.
Viewability over long periods also declined in the last quarter, with publisher direct inventory performing better than programmatic.
The most likely next step is a move back towards the people behind the ads, still using programmatic, but as a tool. Most agencies are now using a holistic approach, incorporating both programmatic and publisher direct inventory.
Caspar Schlickum, CEO at Xaxis EMEA, penned a blog in 2014 in which he hypothesised that, as the technology develops, people will become more, not less, essential to the process. However, media buyers and agencies will have to adapt, becoming more scientific and using an analytical approach to media buying. He concluded:
“And with this in mind, we can see that the term programmatic is doing us all a disservice. Somehow it implies that technology can now do everything, that the machines have taken over and that in turn we can reduce the amount of investment in people. But nothing could be further from the truth.”
Programmatic media buying isn’t going anywhere, but neither has it replaced traditional media buyers. There is room for both in modern online advertising. Indeed, it’s a necessity. The challenge is in incorporating both techniques into a workable media-buying strategy to beat the ad blockers and get the message out. In that, nothing has changed.