Ignore the hype – transparency is a non-issue

The industry has dropped its bundle and is shrieking about transparency , says Simon Larcey, but that is far from digital advertising's biggest problem. In this guest post, he explains where the blame for programmatic's underperformance really lies.

When programmatic came blazing onto the scene, it was hailed as a silver bullet – it would slash agency overheads, ensure clients cut-through to the audience they want, no matter how specific, and virtually single-handedly end the issue of wastage.

The problem is, virtually nothing is perfect straight out of the gate, and so it’s proven for programmatic.

But instead of addressing the issue – that programmatic isn’t getting the return on investment it promised – we’ve dropped our bundle and started shrieking about transparency.

A prime example of the problem with putting too much trust in programmatic was brought to the fore over the past few months, with a number of multinational companies pulling their budget from Google’s brands, after their ads were seen side-by-side on YouTube with some less-than-savoury content.

On the company blog, Ronan Harris, Managing Director of Google UK, wrote that “with millions of sites in our network and 400 hours of video uploaded to YouTube every minute, we recognize that we don’t always get it right. In a very small percentage of cases, ads appear against content that violates our monetization policies. We promptly remove the ads in those instances, but we know we can and must do more.”

But barely a week after that promise was made, Holden and Kia in Australia pulled their ads from YouTube, after having the same issues.

(Holden can’t put their ads alongside videos of people calling Ita Buttrose an “old bag” – they’re clinging to their last vestiges of Australianness, and she’s our nation’s “dose of integrity”!)

While Google are dealing with “millions of sites”, there are billions of web pages that are rubbish. Fact is, bad inventory is bad inventory and good inventory is good inventory. And guess what? You’ll get bad results from rubbish inventory and good results from good inventory.

The problem with programmatic’s place in this, is that ads are displayed because someone that fits the client’s target market may be on a particular site for a millisecond and we can count that as a page impression. Investment needs to be made in improving performance and filtering out this type of delivery.

The other issue that needs to be addressed regarding transparency is that clients are up in arms because there is no real openness about agency margins and mark ups.

But do you honestly believe anyone would really be as bothered about mark-ups if their profits have gone through the roof since they first engaged a given agency? Performance is the true issue, not transparency.

Any business worth their salt is looking at return on investment long before concerning themselves with how transparent the company they’re doing business with is. The only reason this has become an issue with programmatic is because the platform is not performing to the level promised, and thus the clients that employ it are looking for reasons why.

Absolutely, if an agency is ripping its clients off via programmatic, charging hidden fees and employing an all-round opaque approach, then they deserve to be found out and get whatever’s coming to them (or not, since the outcome will likely be a major loss of business).

But the real problem with these agencies is that they’re causing us to shift the blame for a lack of performance onto a lack of transparency, instead of addressing the deficiencies with the programmatic model.

It’s perhaps the real transparency issue faced by the industry: agencies are blinded to the fact that, while they may be able to deliver the promised impressions and click-throughs, the only number clients really care about is their bottom line.

You might provide above and beyond anything promised, but if you’re a drain on a company’s profits, they’re ultimately going to terminate their relationship with you. I anticipate we are going to see multiple programmatic vendors and agencies lose business and some disappear, as brands smarten up.

As I said at the start, transparency is of course an admirable goal, and I’m not for a second advocating businesses pull a blind over their practices in order to do dodgy dealings.

But nor are a few shonky wheelers and dealers the only – nor, indeed, the most important – problem with programmatic buying.

Ultimately the worst thing we can do is believe all the hype, that programmatic is the be all and end all. Programmatic is still only a young channel and one aspect of a balanced marketing mix. Forget the silver bullet – instead we should be investing in new ways that can boost the performance of programmatic and deliver the outstanding results we promise our clients we can.

Simon Larcey is the managing director of Path 51


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