In his continuing regular series, programmatic expert Paul Gubbins addresses the recent controversies surrounding the technology, and why brand safety concerns are no reason to throw out the baby with the bathwater.
With all the negativity and press that has recently surrounded programmatic, I felt compelled to write a piece that defended a component of the media industry I have been proud to be a part of for the last eight years.
Although I believe news organisations are right to expose flaws in the controls of media goliaths that deliver advertising in or around inappropriate content, I do not feel it is right to say that programmatic funds terrorism, and all other associated ills, with automated ad misplacements.
I have said it before and I will say it again: programmatic infrastructure refers to the pipes, not what flows between them. That is the choice of both seller and buyer. Think about a mobile operator; they provide the infrastructure, they don’t control the conversations or messages that flow between their contracted users.
So what are the main issues causing concern and strengthening the perception from media’s old guard that programmatic advertising is not working?
Well, putting fake news to one side, the most recent and high profile is of course YouTube. Unless you have been living in a cave, you will know what I am referring to. What I will say about this example is that it was a Google-owned DSP (DBM) pointing at a Google-owned inventory source (YouTube), and when you have one of the most advanced and sophisticated companies in the world who make self-driving cars and own the renowned AI division, Deep Mind, the press were well within their rights to ask to ask some difficult questions.
That said, many who had little or no understanding of programmatic execution were quick to assume this was a common practice. It is not. There is a lot of user-generated content on YouTube and this is reflected in the scale and price available to its advertisers. Google has stated that it is strengthening its controls and all will be good again. That said, it has still left many with concerns about the wider practices of automated buying and selling of media…
To compound concerns around brand safety and inventory quality, we have recently seen a large newspaper group, The Guardian, initiate legal proceeding against market-leading SSP, Rubicon Project, for buy-side fees that are claimed to have not been disclosed (Rubicon has publicly said it is countering these claims).
Collectively, this negativity and turbulence can look from the outside like things might just be easier if we just went back to fax machines and the three hour martini lunches on Charlotte Street.
However, if we take a step back and isolate several areas where the practise of programmatic is really helping the industry, there are a number of areas worth highlighting.
A helping hand for publishers
In a world where publishers’ readers are transient, programmatic technology can be used to help both identify and segment their audiences before they are made available to the buy side. Many publishers are now seeing more traffic to their sites from mobile than desktop and without a ‘logged into’ environment, ad tech is increasingly being leveraged in order to help publishers understand who their users are and how they can ensure they can continue to communicate with them, and make it easy for advertisers to target. Not as easy as it sounds without a cookie, and in a mobile world of different operating systems…
Programmatic technology is also helping publishers slow the migration of ad spend to those with data-rich closed environments, the big walled gardens. Without insights generated via data management platforms and device graphs, contextual insights would be one of the main targeting parameters offered up by publishers, and buyers expecting user-level information would be forced to migrate ad spends elsewhere.
Many big premium publishers are also now involved in collective alliances with their competitors in order to fight the duopoly, and to capture incremental value for their inventory and audience. However, in order for these to work, they have to be underpinned by programmatic technology.
For the publishers that are not yet running a unified auction via header bidding and letting programmatic demand compete with their direct sold, many are starting to extract programmatic insights to inform the rate cards of their direct sold inventory. This is enabling them to capture incremental yield via dynamic CPMs that yesteryear would have been static and set quarterly or monthly.
Finally, a practice that has been around for some time but is slowly building momentum once again is audience extension. Without programmatic technology, it would be impossible to extract this incremental revenue stream from the market, as audiences need to be identified and made available for targeting.
Precision, scale and automation
For the buy side, programmatic advertising enables advertisers and agencies to manage holistic reach, frequency and attribution across a multitude of different screens for the same campaign. This practice of precision ensures users are not bombarded with the same messages and creative that are irrelevant for the environment that they are in - think a heavy HTML5 ad for mobile when the user is not on wi-fi - and returns a better response for the advertiser.
Programmatic technology enables marketers to find audiences they did not know existed. Contextual relevancy was the main proxy for targeting yesteryear. Today, brands are finding incremental reach as the targeting parameters of demand side platforms are exposing areas of interests their audience display that were never historically deemed a factor.
Programmatic technology is now also enabling big brands to bring some of their automated media buying in house. DMP and DSP adoption and activation at the client level is an increasing trend, and empowering smart advertisers in ways that historically not been made possible.
As with all emerging technologies and practices, things will break and flaws will be discovered. Programmatic advertising is still very much in its early years of development, and both buyers and sellers have to be cognisant of that fact. Asking the right questions and understanding what happens beyond the managed IO or SaaS contract being signed will safeguard buyers, sellers and their brands or publications when they come under scrutiny.
The FSA in the UK has done a great job in asking people to understand the dynamics of the financial markets before they invest in, in order to ensure they remain protected. I think we as an industry need to arm both buy- and sell-side with knowledge, so they can mitigate against risks like opaque fees and inventory quality within the programmatic ecosystem.
To summarise, programmatic advertising is no more responsible for funding terrorism than the cashier at my local bank was for causing the credit crunch. Understand the vendors you work with, and leverage the information in the public domain to make informed decisions. Rome was not built in a day as they say!