SEPTEMBER 20, 2017
The Problematic Rise of Programmatic Advertising
Welcome to the BLACK Letter,
a monthly update on trends and topics in advertising. In our first edition, a timely briefing on the transparency problem in programmatic advertising.
The tools for measuring audiences were blunt during the analog era. When digital advertising arrived offering data on engagement and user demographics, it seemed like a miracle for marketers seeking detailed insights.
With data, the promise went, came greater marketing success. Instead, the US$230 billion digital advertising industry is mired in a transparency crisis.
The problem? The rise of programmatic ad exchanges, services that match ads with targeted inventory in a matter of milliseconds. They may have hastened the pace of digital ad sales, but they’ve also contributed to a shocking lack of clarity regarding where ads are appearing and the nature of the audience that’s seeing them. With programmatic ad buying making its way to television and digital out-of-home, it’s worth understanding why a lack of transparency in ad buying is a problem.
Protecting your brands. With programmatic ads, it can be next to impossible to verify where they have ended up. Marketers felt the sting of this earlier this year when their ads were found on far-right media outlets, which sparked a boycott. Brands came under fire even if they weren’t aware what sort of content they were appearing with.
Meanwhile the metrics attached to programmatic can be utterly meaningless. Blame bots. These software programs can be used to fraudulently jack up traffic numbers. Hackers use bots to divert ads through exchanges to bogus sites, which are never seen by a human, and generate the revenue from the phony “traffic.”
The Association of National Advertisers estimates that somewhere between 10% and 30% of online ad slots are never seen by a human, thanks to bot-related fraud.
So, what to do? Marketers are making aggressive changes to their media plans, pivoting back to trustworthy sources. For example, Procter & Gamble announced in July that it’s cutting more than US$100 million in what it calls “largely ineffective,” non-transparent digital ads.
If you’re also shifting priorities away from raw quantity of engagement and focusing back on quality and reliability, there’s still a challenge: Traditional OOH still doesn’t offer granular measurement.
At Billy Bishop Toronto City Airport, BLACK offers DOOH with engagement metrics you can trust, with independently verified circulation counts. Our post-campaign analytics reports are distilled from data gathered by our facial recognition software.
Want to learn more?
​Four Essential Reads
  1. Brand safety remains a frustrating game of Whack-A-Mole
  2. Digital advertising: Brands versus bots [paywall]
  3. ‘Biggest Ad Fraud Ever’: Hackers Make $5M A Day By Faking 300M Video Views
  4. P&G Cuts More Than $100 Million in ‘Largely Ineffective’ Digital Ads
Copyright 2017 K.D. Black & Company Inc. All rights reserved.

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