Programmatic = problematic is an increasingly troubling equation for the advertising industry.
Basically, programmatic advertising is the industry’s attempt to prosper through automation. In a high-stakes game of musical chairs, algorithms determine which ads will end up on which websites and apps, and where the ads will be placed amid the publisher’s non-advertising content.
But the Interactive Advertising Bureau has been spelling out the ways in which programmatic has turned problematic. The very term, “programmatic,” says one of its white papers on the subject, “evokes a lot of confusion in the marketplace.” The IAB also reports that “approximately 20% of all digital advertising is sold by one machine talking to another machine—and growing rapidly. This creates significant opportunity to create efficiencies and new markets -- and continue to drive advertising dollars to digital. However, it also raises potential implications and concerns for both the buy and sell-side in the digital advertising ecosystem.”
Among these, says the IAB, are “a lack of clear technical standards,” “internal organizational challenges for publishers, agencies, and brands alike” as to payments and commissions, and “the limited transparency and proliferation of vendors involved in the programmatic transaction.”
The most problematic form of programmatic is the “open auction” method, which the IAB describes as “the Wild West of [advertising] auctions…[because] usually there is no direct relationship” between the publisher who’s selling digital ad space and the brand or agency that’s buying it.
As you might expect, brands are anxious for a clear read on whether their ads are winding up in the right place with the right exposure to the right audience. And the confusion is taking a toll. Standard Media Index, which tracks advertising spending, reported that the boom in digital advertising revenues seems to be over, with revenues up just 3% in the first quarter of 2017.
“The digital market hasn’t rebounded from the viewability and safety concerns that came to the forefront late last year, and advertisers are yet to jump back in and show they are confident that these issues have been meaningfully addressed,” said James Fennessy, Standard Media Index’s CEO.
This is what’s known as a crisis of confidence. And it’s why MFour has developed a new way for brands, agencies and publishers alike to measure the effectiveness of mobile ads, which despite the problems identified by the IAD and others, represent a large and growing share of digital advertising (Facebook, for example, generates 85% of its advertising revenues from mobile ads).
This new solution to the digital advertising conundrum is called Mobile Ad Metrics OnDemand. Advertisers can learn whether their mobile ads are appearing on the right audience’s screens, then survey validated recipients of those ads to measure their effectiveness: did they even see the ad? Recall the product? Have an emotional response and feel an inclination to learn more, to shop and to buy? The method provides insights into any kind of mobile advertising – whether placed programmatically or by more traditional means.