Dmexco 2015: The programmatic debate
The rise in programmatic advertising appears to offer as many benefits as it does challenges and was a key topic – and presence – at this year’s Dmexco conference in Cologne, Germany.
As the conference prepared to open its doors, Newsline hosted a breakfast roundtable with some top names operating in the programmatic space to gauge their views on a range of issues: from programmatic’s growth and logical next steps, to the thorny issues of viewability, ad fraud and measurement.
The growth in programmatic is staggering: 45% of UK display ads were bought programmatically in 2014, up 28% year on year.
The IAB now forecasts that between 70 and 80% of UK display ads will be bought in this way by 2018.
The P word has dominated headlines and has been the talking point of countless industry events over the last few years – so now, surely, everyone has their heads around it?
“There are two promises of programmatic,” says Doug Knopper, founder and CEO of FreeWheel. “One is making the market more efficient, the second is making people smarter.”
Yet Knopper, and others, believe the jury is still out on the smarter part and that the next stage in the programmatic revolution is learning how to get there.
“We’ve done a very good job as an industry of selling the dream about the efficiency and the automation,” says Amit Kotecha, Quantcast’s head of marketing, EMEA. “But the smarter part? We haven’t got there yet.
“We all know how programmatic works – including advertisers – but now it’s about how do you measure it in the right way?
“The industry has solved the ‘pipes’ and automated many of the manual processes with technology. Now it’s time to work on measuring success by moving away from last click attribution.”
The ‘dumb’ way of doing things means missing out on what digital has the best opportunity to offer: measurability. Yet oversimplifying the customer journey by measuring only the last click won’t, Kotecha maintains, move programmatic into the stage of its evolution.
Can the industry effectively tackle ad fraud and viewability?
As programmatic buying continues to rise, the level of online ad viewability has dropped noticeably over the last year, according to ad verification company Meetrics, with just 49% of online ads served in the UK meeting the IAB standard in Q2 2015.
The UK figure is down 7% year on year and is well below that of Germany (64%) and France (62%), where automated ad buying techniques, such as programmatic, are less dominant.
Meanwhile, fraudulent clicks have resulted in advertisers’ campaign results being skewed at the expense of actual conversions and programmatic advertising now faces a very similar threat.
“There are a lot of advertisers who are buying cheap advertising – but screaming that it’s not viewable,” says Knopper.
“They’re screaming that there’s ad fraud, click problems – but all these issues go hand in hand.”
Knopper argues that there is one simple solution: buy premium.
“The higher the quality of the publisher environment the less problems you have with viewability and fraud,” he says.
Bastiaan Spaans, SVP commercial at Improve Digital agrees, and says that if you pay peanuts, you get monkeys. Spaans argues that advertisers must take more care to understand exactly what they are buying.
[advert position=”left”]”We need to offer advertisers something they want to pay for,” he says. “If we want programmatic to go to the next level, then that is the way forward.”
Problem solved? Perhaps, but there are plenty of pesky issues that won’t go away. Firstly, there is a link back to measurement, says Kotecha.
Advertisers should be incentivised to measure advertising more effectively, moving away from the mentality of only judging success by the number of clicks on an ad, or using the last view attribution model.
In short, it is about thinking in a more considered way about the online advertising environment and the ‘smarter’ way of approaching programmatic advertising, rather than merely chasing clicks.
There is also the growing problem of definitions. The IAB and Media Rating Council state that for an ad to be deemed ‘viewable’ 50% of it has to be in view for one second.
Yet not everyone agrees and views this as an inadequate measure – and now big media groups, including Group M and Omnicom, are taking a stand.
In fact, a report issued this week by consultancy FaR Partners reveals that only about a third (37%) of senior marketers and publishers think the official guideline is sufficient and want to redefine the standard.
Yet whatever the definition, one thing is certain: there is simply not enough inventory available at any given time that is even remotely close to being considered viewable in any meaningful way.
Alarmingly, only 5% of all available inventory is deemed to be between 75% and 100% viewable at any one time – making the wishes of advertisers who, understandably, want the ads they pay for to be seen, something of a pipe dream.
“It’s totally understandable that advertisers would want 100% viewability,” says Kotecha. “But we need to educate brands so that they understand that there isn’t that level of inventory out there that is available at that level, no matter the provider you’re using.”
The final issue is responsibility.
Whose job in an increasingly complex and fragmented media industry is it to ensure that ads are viewable and that fraud is minimised? For Owen Hanks, general manger at YuMe, it’s the role of the advertiser and the ad tech provider – but also, increasingly, the publisher.
Hanks argues that too many big-name publisher brands, that started life in print and trade on brand legacy, are ignoring the issue – while much smaller publishers that started life online take too much of the flak.
“It’s not fair just to say that I am X brand that everybody knows and therefore trust me,” says Hanks.
“Some of the premium newspapers in the UK and US have upwards of 10 – 15% of bots on their sites and they just just don’t know. I want to see advertisers get what they pay for so there must be some sharing of responsibility.”
“We’ve seen a trend over the last six to 12 months where the large publishers we work with are bringing programmatic capabilities in-house,” says Alicia Navarro, CEO and founder of Skimlinks.
“This includes VP of data and VP of audience – very new roles for those publishers – and that is wonderfully exciting,”
For Navarro, this is the first step in the process towards a new industry-wide sophistication which is using programmatic capabilities not just to make things more efficient, but also to better price what they do and to take a degree of “sovereignty” over their data and inventory.
Similarly, Hanks believes that audience buying is finally set to become a more meaningful concept as publishers better understand who consumes their content.
“This is a big step forward,” Hanks says. “It will only increase and improve transparency so people will start to understand what they’re buying and selling a little more and therefore if their objective was actually met or if they were just ticking boxes.”
On the publisher side, Barbara Agus, director of global programmatic for The Weather Channel, agrees that programmatic offers huge opportunities, but there are further challenges around the use of data and changes in legislation.
“How do we use [consumer] data and how do we stay compliant?” Agus asks. “We need to address this now rather than later, because if we still want to use user data so we can give our content away for free, we need to face the latest legislation – especially in European countries where there is a lot of disagreement.”
Agus says that, as a publisher, she is taking a risk that some countries might even shut down her website, making it a real headache when operating in multiple territories.
“It’s a very big topic for the European market and definitely something that is starting to prove a problem for us as the technology is evolving.”
See also: Dmexco 2015 in video – views on the biggest challenges in digital marketing