Bursting the programmatic bubble?

10:51 AM, 24 April 2017

Are advertisers short-changed by the programmatic media supply chain?

The recent AANA (Australian Association of National Advertisers) "Media Challenge: Achieving Transparency and Effectiveness to Drive Business Outcomes" shocked advertisers when it was revealed how ineffective programmatic advertising can be, with as little of 20% of the spend paid by advertisers reaching the consumer.

Nick Manning, chief strategy officer of Ebiquity, gave a brutal assessment of programmatic media and its role in the digital media supply chain. He described it as "the biggest problem in the industry".

Manning added: "[Programmatic spend] is the biggest problem we have in the industry right now in terms of wastage and inefficiency. The point is that programmatic isn't working terribly well, we believe, but nevertheless money is gushing into programmatic even though it's inefficient," he says.

Photo courtesy of Tax Rebate

A murky outlook for your advertising ROI

According to Manning, an awareness and acceptance of the lack of transparency with programmatic type of advertising will only save you money in the future. He added:

"You, as advertisers, have to understand how you tackle this and how you reduce the level of wastage within the online and programmatic system. Money is going in like there's no tomorrow, meaning an inefficient channel is receiving more and more money and it shouldn't be. It's damaging the industry."

Not only does it fail to deliver returns for advertisers, but it doesn't work for publishers either, he says, outlining the knock on effects of programmatic on the rest of the digital ecosystem.

Programmatic advertising fuels ad fraud and sourced traffic, pages loaded with too many ads, clickbait to attract traffic and intrusive advertising.

Or using Marc Pritchard's terminology, it fuels "crap". And that leads back to ad blocking.

Be proactive with seeking advertising clarity

An inspired Manning held everyone's attention during the event as he demanded more proactivity from the industry. Even if it made it uneasy for some. He added:

"We have to talk about some of these things that make advertisers uncomfortable," he told the room.

"We can't solve industry problems if we aren't honest about what those problems are. [Transparency] is not just about money, contracts and audit rights. It covers many aspects and affects all advertisers. It's about ad blockers -- you need to understand how adblocking is affecting your communications and how you mitigate it -- it's about ad fraud, which is an issue for everybody and you need to know how to manage it. Ditto for Facebook's metrics problems. And programmatic is the biggest problem of all.

Programmatic advertising simply isn't working. We know that because we do a lot of ROI and analytics work and we very rarely see any programmatic work giving any positive return on investment. It can happen, and we do see it, but mostly it doesn't and that is a real problem. There are specific reasons why it doesn't."

To grow, we need to see the truth

Manning stated that transparency is an issue because the practices it hides "distort" the media market, "reduce advertising effectiveness" and "stifle growth and return on investment".

Manning showed a series of slides and charts which show the makeup of the digital media supply chain, where the money goes. The one that caught most marketers' attention and garnered a lot of commentary after the event was one that showed "the true cost" of programmatic.

What are your thoughts in regards to the lack of transparency surrounding programmatic media? All feedback, queries, and opinions are welcomed to lindsay@anza.co.nz

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