1. Digital media continues to grow at a double-digit rate and will eclipse television in overall ad dollars come 2021.
2. Programmatic buying will represent 48% of all global digital display advertising at the end of 2015 (source: Magna Global).
What is also happening as digital and programmatic continue to grow is that tools to seek out and secure quality inventory are greatly improving. This is important because the discussion regarding programmatic buying has been unevenly focused on securing low cost, rather than high quality inventory.
Of note, pursuing premium digital inventory on programmatic platforms, when using solid ad targeting and quality optimization metrics can also boost ad viewability. While a focus on “quality” inventory doesn’t eliminate advertiser transparency concerns, it does begin to address the effectiveness of an advertiser’s media investment in this area.
Supporting this approach is a recent ComScore Verification Study which found that “91 of the top 100 sites have less than 5% non-human traffic.” Unfortunately for programmatic devotees, accessing premium inventory via private marketplaces and direct dealing with trusted publishers currently represents a better path for those focused on quality.
Media buying automation is clearly marching forward and not only in the context of securing a growing share of the digital media spend. Programmatic buying has already been introduced in the television and print media sectors as well. Thus, while the use of computers and algorithms to purchase media has yet to be de-bugged and fully proven the dream of one-to-one advertising at scale, purchased on an efficient basis is proving to alluring for the industry to bide its time.
There are two cautionary notes, which the industry should consider before continuing its head long rush down the programmatic path.
The first is the cost premium being paid by advertisers due to the level of fraud, which is being perpetrated on the industry. Vergard Johnson, former Chief Customer Officer of Spider.com who spoke at the recent IAB X-Series: Programmatic conference in Toronto, told the audience that “a typical botnet can make about $300,000 a day off of advertisers” and that “somewhere near 10% of all corporate and residential computers are infected with moderate-to-high risk malware.” Sadly, he went on to point out how easy it is for hackers to infect our computers and gave an example of how once they’ve infected a computer that they can run “can run 23 full-screen browser windows on ad-filled ghost sites, without any sign of the activity even on Windows Task Manager.”
A second area of concern is the fact that programmatic buying has been found to increase the level of discrepancies. The reason according to James Curran, CEO and founder at Staq “is that every ad server in the chain of exchanges counts impressions, views, clicks and conversions a little differently.” In an article which he recently wrote for AdExchanger, he went on to point out that, while publishers, particularly publishers selling quality, in-view inventory have born the financial brunt of satisfying advertiser make-good demands, the “tedious and inexact process” of clearing reconciliations is both time consuming and costly.
So, while hope rings eternal when it comes to advertising automation, taking a guarded approach and focusing on quality inventory will continue to be an advertiser’s best line of defense.