Do You Know Where Your Programmatic Dollars Go?

As with any new technology, programmatic ad buying has been surrounded by a flurry of excitement as well as confusion and distrust. Many industry members have been actively on top of it for a couple years now, and many more have yet to even figure out what it actually is*. In a white paper by Advertising Age and RythymOne, programmatic is explored in terms of verification and viewability, providing an idea of what to look out for when buying ad space programmatically. In Rebuild’s continued experimentation with new technology, we found this white paper to be highly relevant and we think you will, too.

Programmatic ad buying started at the bottom of the funnel with activities like ad retargeting. As it becomes more widely accepted, its reach is extending throughout the entire consumer journey to the top of the funnel with rich media and in-stream video. But hindrances persist for widespread adoption, as mastering two important measures remains elusive: viewability and verification.

Viewability, that consumers have the opportunity to view the ad, and verification, that it’s not being seen by bots or displayed on sketchy sites that erode brand safety, are key concerns for programmatic buyers. For the basis of this white paper, 452 industry members were surveyed about programmatic. On average, about 28% of participants’ ad spend went to programmatic, and about a quarter fall into the category of “heavy users.” Of those surveyed, 70.6%  have a verification provider from whom they receive detailed information on viewable impressions, but less than a third actually believe it to be highly accurate information. While heavy users are more likely to trust the information, lending to the idea that “adoption is outpacing comprehension,” any programmatic user is right to be skeptical as new technology opens the door to new kinds of fraud.

According to Distil Networks, $1 out of every $3 spent on digital advertising is lost to fraud, costing the industry roughly $18.5 billion annually. A report by comScore indicates that in 2013, 54% of digital display ads were not viewable (up to a whopping 57% for digital video ads). While it’s not entirely possible to attribute this to fraud or human error in exact numbers, it still illustrates a huge problem. This trustworthiness problem is so large that several buyers are demanding advertising platforms allow them to use third-party providers to check viewability and fraud rates. Kellogg went as far as dropping YouTube ads from their marketing mix, as Google does not allow third-party measurement. Google will, however, give a refund on ads that are deemed fraudulent.

These measurement tools are having another effect on the marketplace– some companies won’t buy ads unless they can guarantee a very high viewability. The more companies that use this methodology, the less available quality space there will be. This scarcity will drive up demand as well as prices, meaning buyers will have to accept a smaller bang for their buck.

*Still confused about what programmatic actually is? You’re not alone– only a third of those surveyed correctly identified the definition. Learn more about it here.