The ad industry has ‘poisoned’ programmatic and it needs fixing fast, Scott Hagedorn warns
Adland has poisoned programmatic, destroying its potential to be a huge force in the future of advertising, thanks to a lack of transparency that has left clients with little trust in the industry, the CEO of Hearts & Science has warned.
Programmatic has been poisoned by the ad industry, Scott Hagedorn warned.
Delivering the opening keynote at Mumbrella360 today, Scott Hagedorn, global CEO of Hearts & Science – which was founded little more than a year ago and immediately captured headlines winning Procter & Gamble and AT&T – warned that the damage had been so great the industry may not get the chance to repair it.
“We as an industry have poisoned programmatic,” Hagedorn said.
“We told clients oftentimes that it was about real-time trading and there was all these people with hands on keyboards that were doing bidding and going after inventory when in reality it was more of a set it and forget it. We would go in and program a clients’ KPIs into a DSP and we would focus on the buying side of it and then it became increasingly non-transparent.
“We actually poisoned probably the best-part about programmatic.”
He said advertising technology was becoming the backbone of the industry and and needed to be trusted – “Yet it has still a really big stigma in the industry.”
He called on the industry to refocus on “the core of the apple, which is how you create new digital audience currencies”.
“How ultimately are we going to get another bite of the apple of programmatic and think about how we re-frame what it really means,” he said.
“How do you liberate data and use it in new ways to activate on it? And then the next layer out is how you write business rules to make the internet and marketing behave the way you want it to behave,” he said.
“We forgot probably the most important thing, and this is the most unfortunate effect that programmatic has, was we started to divorce advertising from context. Programmatic cut the context off of media.”
He also noted that with a lack of transparency there “were entire communities of buyers that had no idea where their ads were being placed”.
Hagedorn also warned that the currencies that were being used by agencies and their clients to measure the effectiveness of their strategies were failing and the way forward needed to be built on the application of new measures that captured how people were actually behaving.
Hagedorn said that one of the drivers in setting up Hearts & Science was the desire to reset the discussion and regain the trust of clients.
“There is a client knee-jerk reaction right now with everything that’s happening in digital to try and go back to the way it was, let’s go back to television – that is a very dangerous line of thinking,” he said.
He also warned that current industry measures are missing massive chunks of digital audiences on mobile, with an urgent rethink of metrics needed.
As part of its business model Hearts & Science partnered with Newstar and Integral Ad Science to offer its clients new audience currencies that better reflected the real world. The agency’s own research, he said, had found a disturbing gap in what was being measured – what he has dubbed “The Unreachables”.
“What we have found is that 40% of all the impressions right now are not measured by syndicated research sources.”
As part of the study the agency is undertaking into The Unreachables, Hearts & Science is considering digital efficacy and the need to consider the environment in which ads were appearing.
The gap was discovered by an agency strategist who highlighted that all the syndicated research failed to capture the media behaviour of her and her friends at all.
“So 40%-50% of the time we think the data on how people are actually consuming content does not live in the syndicated data sets that we give our teams to use to plan,” Hagedorn said.
“Why that’s dangerous is those syndicated data sets will lead you right back into television again because they can’t accurately right now measure mobile.”
He said currently agencies had to use gut feel to re-calibrate mobile recommendations for clients because the data did not exist as they tried to capture The Unreachables.
“At a broader level right now what I’m considering is ‘What’s the real effect of digital? Do we need different types of metrics? Do we need to look at it maybe a little bit differently?’
“Some of the platforms – I don’t want to blast all of the platforms – but some of the areas we need to consider what role it really plays in the overall purchase cycle.
“Please don’t coin negative brand equity as something that I said, but I worry in some instances on digital platforms that that could actually be true.”
With brand safety now paramount in the minds of advertisers he said that clients needed to consider where they wanted their brands to reside, not agencies, saying it was like putting a sign in someone’s front yard, but ignoring what might be happening in the house.
“You can’t put that sign in their yard saying buy your products if you’re not comfortable with what happens inside their house,” he said.
Scott,
Coming from you, I hope your point about refocusing on content catches
on.
Also, your points also put the exclamation point behind my strongly held position that the digital media supply chain badly needs to be demystified to the advantage of marketers who, ultimately fund all parts of “the chain”.
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Sorry, but you’re focusing on the wrong things. It’s not about the flaws in programmatic buys and making a gross impression. The elephant in the room is: Most advertising is ineffective! It’s either outdated or designed to win awards – totally missing the consumer. All the data in the world won’t help lame ads touting 0% financing, whiter whites and ask your doctor about Xzytellimaneargentic.
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I could not agree with Scott more!
I have been saying “context matters” for years, but even moreso after meeting Affinity Answers.
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