I come from the world of advertising sales. Strike that: I come from a world that no longer exists even though there is one with the same name still out there. It’s called advertising or media sales except there isn’t a heck of a lot of selling going on – just a lot of buying.
I dislike programmatic buying for a number of reasons, but the one I’m going to discuss today has implications for your business, even if your business isn’t media. Your brand may be using programmatic to purchase ads. Certainly digital ads and, soon if not now, TV, print, and even outdoor. I completely understand the efficiencies of this system and from the buy side the system is great. From the publisher or content distributor side, it has had the effect generally of pushing pricing down. Zero-sum games do that. However, that’s not today’s beef.
In a word – transparency, or lack thereof, is my issue. Many brands have no clue where their ads are served nor do they know for certain which creative is being used vs. which targets. They don’t really know how fees are being taken along the way and they’re not really sure what their budget is getting them in terms of placement. In short, the last thing you want as a marketer – or any businessperson – is a surprise, and this system has the potential to deliver many of them, most of which are bad.
If you think you can mitigate the surprise issue with a Service Level Agreement, think again. Most of those contain a cure period. Even if there is an hour during which your ads run on an unapproved site, the damage is done. Surprise!
When the bills come in and you find out that your $250,000 budget bought you $175,000 of inventory due to fees, causing your effective CPM‘s to rise significantly, surprise!
Ad spending in the US for programmatic TV will rise to nearly $4 billion in 2016 according to some estimates. That kind of honey attracts a lot of flies, and I suspect we’ll see an even more fractured technical landscape supporting this buying. No matter what your business, you can’t work with partners who are hiding something, at least I can’t. Can you?