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CMOs remain suspicious of programmatic advertising, warns the latest IAB playbook

With marketers potentially wasting over 60% of their programmatic advertising spending, CMOs continue to be deeply suspicious of the industry, the Interactive Advertising Bureau’s latest programmatic advertising playbook has warned.

“Ten years into the programmatic age, many CMOs remain sceptical as to whether this technology can elevate their brand marketing,” said Dylan McBride, AppNexus’ commercial director.

“This is clearly unacceptable”: Dylan McBride

“Lingering trust issues resulting from invalid traffic, brand safety, and a lack of marketplace transparency have served to restrain their adoption of programmatic advertising on the open internet.

“Today, when an advertiser buys programmatically on the open internet, as many as half of the ads they’re billed for may not have been viewable. In other words, 50% of their marketing budget may have been wasted in the blink of an eye.”

Coupled with the commissions paid to middlemen, most advertisers could be wasting nearly two-thirds of their spend, a situation that is unacceptable says McBride.

“That means, for example, a marketer spends $100,000 on advertising. In today’s programmatic ecosystem, one can assume intermediaries take about 25% of that investment. Combined with an industry-wide viewability rate of approximately 50%, that leaves only around $37,500 of the original budget is put towards ‘working media’. This is clearly unacceptable.”

Compiled by Jonas Jaanimagi, executive consultant to IAB Australia, the Programmatic Playbook is an updated version of the 2015 inaugural Playbook available to the organisation’s members.

With the programmatic advertising industry suffering a crisis of confidence, the IAB intends the playbook to provide clarity, understanding and guidance for both buy and sell-side audiences. It also serves to warn marketers of the traps in the technology.

Jaanimagi suggested marketers can overcome programmatic’s downsides by taking an active role in the planning process.

“Get your hands really dirty in any RFP  process. Test everything you can and do your due diligence. Work appropriately with your procurement team, if they exist and if required,” he said in the guide.

McBride said the solution for this situation lies in premium exchanges and machine learning taking control of the programmatic algorithms, while in the longer-term identity services will give marketers a better understanding of their online spend, something he claims will improve the internet overall.

“Together, these initiatives support an open ecosystem that gives marketers end-to-end control over where their digital spend goes and creates a fair auction for advertisers and publishers alike. A more effcient and trans- parent supply chain creates a better internet for all.”

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