Marketing hacks beware – the days of dodgy programmatic are almost done

For years, agencies have been dining out on the fact that programmatic platforms are complicated systems that only well trained engineers can master. Those days are numbered, warns Viztrade's Simon Larcey.

Seismic change is set to tear its way through the digital advertising industry, and nowhere is this more evident than the programmatic space. In the wake of scandals like Cambridge Analytica, the general public has been left with a bad taste in its mouth and the bullseye is focused squarely on performance media and underlying issues of data collection, targeting and digital privacy.

Of course, for canny programmatic marketers, this changing landscape represents an opportunity to win the trust of consumers by acting with transparency and by developing smarter techniques which only target receptive individuals in appropriate contexts.

Make no mistake, digital advertisers, publishers and agencies are set to face massive regulatory headwinds regarding third party data, opt in versus opt out data collection and digital transparency. Ultimately, however, these headwinds should advance the quality of digital marketing and improve the advertising experience for consumers, which will benefit the industry in the long run.

For those in the programmatic space, the coming months will be defined by three pertinent developments:

  1. More stringent regulations will protect consumer privacy and limit the use of cookies and third party data;
  2. Intelligent digital advertisers will develop improved programmatic targeting techniques which focus on mindsets and contexts, not just people; and
  3. Programmatic platforms will become increasingly user friendly, which is bad news for many agencies.

Over the next year or so, these three developments will up-end the digital advertising industry, and players entrenched in old school methods will have trouble keeping up.

Look out, the regulators are coming!

With the introduction of the General Data Protection Regulation (GDPR) in Europe, the development of new privacy mandates in the US and more lawsuits for privacy breaches than you can poke a stick at, you can bet your bottom dollar that Australia is set for regulatory transformation in the programmatic space.

Privacy is the right of every consumer. People should only be individually targeted by companies if they have given their permission to do so. How we as an advertising industry have been able to use third party cookies as a targeting tool without any regulation for so long is amazing.

In this context, it is inevitable that programmatic will change. It is simply not sustainable in its current form. A host of issues around privacy, brand safety, viewability, multiple intermediaries, transparency and complex legacy systems only qualified staff can manage means a different way is required.

In the next year or two, I suspect third party data will become highly regulated or outright banned. Marketers and agencies won’t be able to target unwilling consumers just because they tick a few demographic or behavioural boxes. Of course, the smart players have already realised – why would you even want to do this?

A focus on mindsets and context, not just people

Currently one of the biggest flaws around programmatic mechanics is that performance media focuses exclusively on people and not context. If a consumer fits into audience segment X, then we will deliver A, B and C ads because, apparently, that is what the consumer wants. We will also retarget that consumer based on the sites they have been visiting.

While knowing your consumer is critical, so is delivering the right ad in a contextually relevant environment and at the right time. If we don’t know exactly who a consumer is, surely it would be smarter to deliver a contextually relevant ad based on the environment that consumer is browsing. A car ad on a car website will get my attention far more than an Uber Eats ad on a car website. It’s logical, but it’s logic that traditional programmatic doesn’t seem to understand. Targeting the right person in the wrong place and at the wrong time is not going to lead to conversions.

Performics CEO Jason Tonelli hit the nail on the head when he said: “In 2019 we will see brands shift gears from targeting people to targeting mindsets to really understand customer intent signals.” If we could use the data we aggregate to properly understand the mindsets of individual consumers and deliver them the right ads, in the right place, at the right time, the game would change. Consumers would appreciate good advertising, respond positively to messaging, and brands and advertisers would see greater conversion rates.

Programmatic platforms will become more user friendly

For years agencies have been dining out on the fact that programmatic platforms have been complicated, opaque and inefficient systems that only well trained engineers could master. This has helped agencies justify exorbitant fees and digital commissions and fuelled the myth that programmatic success is impossible without a highly trained middleman guiding your digital marketing budget.

However, these systems are becoming far more user friendly and this is bad news for agencies, because marketers will increasingly buy direct and cut out the middleman altogether.

Programmatic 2.0 platforms will service both supply and demand partners under one roof in a fully transparent ecosystem, where they can share data and build solutions together. Publishers can introduce customers to advertisers and advertisers can bring customers to publishers. This will all be underpinned by the consumer, who will ultimately decide if they want to opt in or not.

In the event consumers do opt in, individual identities can be created and a full mindset understanding can be developed. In the event they don’t, a publisher can deliver contextually relevant advertising to someone else who actually wants to take part in the process, without annoying or intruding on any individual’s right to privacy.

These changes are already underway and in the modern context of consumer distrust and increased regulatory oversight, the transformation of the programmatic space is only set to occur more rapidly. These developments might be painful for some, but ultimately those advertisers who are transparent and consumer-focused will benefit.

Simon Larcey is Viztrade’s managing director.


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