Programmatic ‘simply not working’ for brands or publishers
The Australian Association for National Advertisers (AANA) has warned marketers they need to take on responsibility for transparency – rather than relying on publishers or media agencies – as issues around ad fraud, viewability and programmatic advertising increase.
At last night’s AANA event – The Media Challenge: Achieving Transparency Effectiveness to Drive Business Outcomes – Nick Manning, chief strategy officer at Ebiquity, said even though ad fraud is growing, programmatic is “the biggest problem of all”, and it will be on marketers to find solutions.
“Ad fraud is an issue for everybody. It exists in different proportions in different parts of the world. In the US it’s really a very big problem. In some markets, it’s less of a problem. But it’s out there, and it’s growing. And you have to have an active management program, working with your partners to work out how that’s affecting you. Ditto for Facebook’s metrics… you need to understand how that affects you, what you should do about it, how you work with your partners to address it,” he said.
“And programmatic is the biggest problem of all… because programmatic advertising simply, for most of our clients, isn’t working. How do we know that? It’s because we do an awful lot of ROI analytics work and we very rarely ever see programmatic producing a positive return on investment. It can happen, we do see it happening, but for the majority of our clients, it doesn’t, and that is a real problem.”
Despite programmatic not giving brands a sufficient ROI, Manning said money was continuing to pour in “like there was no tomorrow”.
“The market is not going well. There is a channel that is not working well for many of our clients and yet there is money going in as if there were no tomorrow. So this is a problem. It means that an inefficient channel is receiving more and more investment and that shouldn’t happen and it’s damaging to the industry as a whole – because if the advertising in programmatic isn’t effective and it produces significant brand safety problems, it’s a problem for the entire industry.”
Manning contended programmatic also wasn’t working for publishers, who say despite its supposed efficiencies and automations, there is still too much manual labour involved which is “causing a problem”.
The onus to tackle the problem may be with marketers however, with Manning saying “it’s your money”, so you need to control it.
“You as advertisers have to understand how you tackle this and how you reduce the level of wastage that is inherent in the online and programmatic system,” he said.
“It is very important you have an active stewardship program at your disposal to make sure that you make all the right decisions…
“Media has to be treated as a significant business discipline. It is a lot of money. For many of you, it’s one of your biggest costs as a business. Therefore, you need to actively manage those costs, those investments, as much as you would any other investment in your business. And it is your money that we’re talking about here. The advertisers pay for the entire industry…we are becoming even more an ad-funded industry,” he said.
Sunita Gloster, CEO of the AANA echoed these sentiments and shared insights from some AANA members who had said “the only viable option to get transparency in this area [digital advertising] is to bring it in-house”. Gloster conceded many AANA members are “on the journey” to making that business decision.
Gloster shared another AANA member’s concerns who said: “The biggest area of transparency concern is digital media and programmatic buying. It’s the dark art. No visibility. My knowledge here is just not as strong as it should be.”
Another said the media transparency issue between publishers, media agencies and marketers was “the blind leading the blind”.
Manning said marketers need to tackle the transparency issue so they can make the best possible media decisions and drive better advertising, but conceded “transparency has never been harder to get”.
Interested to know how the ROI was done – is it simply dollar for dollar and not generating returns? Does it take into account branding, message recall etc, all of which there are similar problems with measurement across all other channels.
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Maybe if you all stopped remarketing me for stuff I already bought on your website that would help your ROI?
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Programmatic is not a channel, it’s a means of trading…. is it digital display in general that isn’t working – yes, or at least in it’s most basic form.
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Don’t blame programmatic, look at how you use it.
Is your creative brilliant? Or did you just come up with crap?
Is your offer/product/service any good? How is your pricepoint?
It is laughable to write off a channel because it isn’t working for you.
There are plenty of companies getting great ROI on programmatic – but maybe their product is better, their creative is better, or something else.
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I’d guess the only people programmatic is really working for are media agencies.
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Wow, most honest thing i have heard about programmatic…..ever!!! In fact I am surprised its 20%, I thought it would be less.
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Programmatic is a way to buy media. RTB is the open market for bidding on audiences. There is a problem with the sell side of RTB, not the buy side. Trading desks operating a DSP know what they want to buy, it’s the SSP’s that are not being transparent.
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Put simply no one knows, everyone (all media) fighting for attribution.
Some of the comments are laughable, don’t try and ‘mug me off’ with branding and recall, good luck measuring and attributing that!
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Programmatic is a default business model that helps achieve greater revenues for an agency to supplement their turnover.
A great way to trade spoilt by incorrect use of it.
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Seeing as how the VP is such a VIP shouldn’t we keep the PC on the QT, ’cause if it leaks to the VC he could end up an MIA, and then we’d all be put on KP.
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^^^ Some solid comments on this thread, but this guy is on the money!
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Be good to see some detail on this inefficiency.
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‘not working for advertisers’ is a statement that’s absolute and if you think it through cannot be substantiated. The Accountant above is right on the money.
Also, this is the same AANA who with MCN commissioned and provided Mark Ritson a platform for his ‘Marketing Deconstructed’ talk last year during which he slated all digital. Does anyone sense a not so hidden agenda?
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Keaton, I couldn’t disagree more.
I invite you to research trading desks in more detail. There are declared and publicly available statements that show trading desks are actively engaging in arbitrage, are taking advantage of kickbacks and rebates, and are generally acting in their interest, not their clients.
I think perhaps the fact that your last two roles, and I assume your future roles, have the trading desks as your main clients suggests that you aren’t completely unbiased (thank you for providing a website link).
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Headline of the day. Consultant exploits confirmation bias to present sweeping statements which will help generate new business.
ROI should be used for its original purpose, not as an unsuitable proxy for measuring digital ad performance.
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As a publisher, we see programmatic as the devil. We have seen budgets move en-masse to the trading desks, away from native and “traditional” display/digital offerings. It has even seen the demise of creative agencies that were mainstays of small to mid-sized publishers. $2.00 CPM’s and 60-day payment terms are crippling us. The heavy lifting involved is mind boggling too. As I type this, I can image the trading desk teams laughing like Doctor Evil as they look down from their ivory towers and ponder on a black or silver ML this time. Don’t laugh too long though; with a “new revolutionary programmatic offering” launched every 3.7 minutes the race to the bottom will see you looking for a job soon too.
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What I don’t understand is why so much money pours in?? If people keep buying the media agencies will keep selling.
Personally I don’t pay much attention to publisher tools, apart from as relative measures. I look at ROI. That’s all that matters.
Even Facebook, yes their numbers are rubbish, but my own data says it’s good for my business. So I keep buying.
I’m doing some limited programmatic buys but finding them a waste of money so far.
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Good comments here.
Programmatic is a race to the bottom… it has pushed CPM pricing down so low, so advertisers *feel* like they’re getting huge reach and unbelievable value, but where’s the value if there is no actual human seeing the ad… or if one set of eyeballs sees the same ad refreshed 25 times in one session? It’s pretty obvious this is the only way CPMs can be priced so low.
Quantity of impressions mean nothing. The tide is turning. Programmatic has killed banner advertising… native content, social media + influencer marketing is where the dollars are headed.
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Follow the money…whose pockets is that 80c ending up in? Must be some sort of incentive to push money into such an ineffective channel…
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This piece is extremely biased towards trashing what is a buying capability not a channel. It’s not untrue that there is still a lot of transparency issues when buying with Ad Networks and Ad Exchanges however programmatic is simply a buying method automating what was previously done through buddy buddy relationships.
I challenge any of you to directly measure your ROI and wastage against TV, OOH or even direct digital buys against that of an inhouse trading desk. You will soon see the efficiencies that “programmatic” has. It’s not all about the technology but also the people driving it. Would have been good to see some examples from Manning.
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Marketers often struggle to understand the difference between the number of sales claimed by digital advertising and the incremental sales that occur as a result of digital advertising.
The more you advertise, the more you can claim, the more effective your digital program looks.
It doesn’t mean you’re getting any new sales though.
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Dear CMO,
Glad your facebook buys are performing for you.
You buy this via power editor or a Brand Networks type business?
That would be programmatic also. You know, using software to automate an otherwise manual process.
Don’t fool yourself, your programmatic failures failures to date have been at the hands of a ill disciplined agency trading desk arbitrating media, campaigns run by jnr grads on 40k a great with zero marketing experience.
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It is only a race to the bottom if Publishers let it happen. Publishers should stop their inventory being available in ‘open marketplaces’. Getting Publishers to move towards Programmatic Direct via Deal IDs and having relationships directly with agencies etc is the only way to maintain CPMs being bought through Agency Trading Desks(ATD).
ATD’s are the ones driving the price of media down and don’t want to pay the true price for media from the Publisher. The main reason for this is ATDs can’t buy the media at a high price because they can’t put their markup on the inventory and charge it to the client, little to no margin in it for them. So they buy the cheap and nasty stuff to add the high markups / margin!!
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The AANA and this article fails to mention that the presenter is from the same company that has been commissioned by ThinkTV to promote the ROI of television in Australia. Step one is obviously to discredit the other mediums.
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Is a concept all senior marketers should understand, not a name for a trendy milk shake.
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The one glitch in that scenario is that it was the American National Advertisers which appointed Ebiquity/Firm Decisions after an RFP to work with K2 Security on that expose in the US last year. Think that’s why they’re front and centre of this globally – not just Australia.
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+1
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This article fails to understand the issues at hand actually. It’s not the programmatic channel nor technology that’s the problem; it’s rather the people you have controlling the technology that are the at fault, theirs too many 3rd parties black boxed arbitrage intermediaries in control of the technology. If you’re a brand, get your technology in-house and hire a team of in-house adopts. Look into Liquid AdX, bees wax OR BUILD YOUR OWN BUT WHATEVER YOUY DO DO NOT TRUST THE 3RD PARTIES TO SPEND YOUR BUDGETS IN YOUR BEST INTERESTS.
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If you are client side and your spend is big enough with the new media giants to get account management directly from them, why oh why would you not go directly with them for account management, billing: anything with their platform? You get closer to the sale and direct info from the horses mouth, which isn’t muddied by a 3rd party. The world of 3rd party trading desks: does it just enable the dodgy ad agency world to continue to be dodgy? Many would say that it does.
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Yep, I am still getting hit for camper van hire after completing my holiday months ago…
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I wouldn’t say it helps the publishers / networks who are great and who can transact with larger spenders directly. If a client can go direct and cut out a 3rd party, (when it comes to the big networks, like Google and Facebook); why wouldn’t you?
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