Campaign UK

The battle to keep the programmat­ic business afloat

- GIDEON SPANIER Head of media @gideonspan­ier

The perils of programmat­ic advertisin­g have become a boardroom issue.

“It is a striking fact that today only about 40% of digital programmat­ic advertisin­g investment reaches the consumer,” according to Ebiquity, the media auditor and pitch consultant that advises about 80 of the world’s top 100 advertiser­s.

Value is “being eroded by the multiple links between advertiser­s and publishers, fraud, lack of viewabilit­y and non-human traffic,” Michael Higgins, chairman of Ebiquity, says. “I don’t envy any business leader who has to tell his board and shareholde­rs that they’re investing in anything that suffers up to 60% wastage. The trouble is that’s what many CMOS should be saying.”

But given Youtube’s brand-safety crisis and Procter & Gamble’s recent warning about the “murky” media supply chain, there’s a high chance that boards are now quizzing their chief marketing officers about programmat­ic.

When Ebiquity talks about “the multiple links between advertiser­s and publishers”, it is hinting at the media agencies and ad-tech companies that are all taking a cut. The suspicion is that agencies and others in the supply chain are funnelling clients’ money into programmat­ic because of higher margins. In a notorious case last year, when The Guardian bought its own ad inventory, it only got 30p for the £1.

Programmat­ic’s advocates urgently need to clean up their act. Context and audiences matter, as a group of two dozen UK regional newspaper publishers pointed out in an open letter this week, urging advertiser­s to reject what they called the “blind programmat­ic ad-buying” trap in favour of trusted, high-end content.

However, Luddites shouldn’t be seduced into thinking that the programmat­ic genie can be put back in the media bottle.

In a thoughtful piece on Campaignli­ve, Rob Norman, chief digital officer at Group M, pointed out: “Programmat­ic is nothing more than a mechanism for the automated connection of demand and supply, and of advertiser­s to consumers, using data to increase relevance – and speed to capture opportunit­y.”

In his case for the defence, Norman pointed out that programmat­ic does have “real costs”, including people, data and technology, and clients should look at whether it delivers better outcomes. Some City analysts argue that the alarm over programmat­ic could even benefit agencies because brands will think twice about taking their digital media in-house.

But the fact remains that, unless trust can be restored, the programmat­ic bubble is in danger of deflating.

“Programmat­ic’s advocates urgently need to clean up their act”

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