The conversation started like any other…
North American media director of largest single brand advertiser in the U.S.: “Hey Anthony, my agency is putting more pressure on me to buy programmatic online video and they want to run it through their trading desk. Can you audit the results for me?”
Me: “Sure can, pre-bid and post-bid. But do you have time for a quick chat about the potential pitfalls of going programmatic?”
Him: “What’s there to know—isn’t everyone going programmatic because it’s the most cost-effective way to buy?”
And that’s where the problems begin.
That's because programmatic buying, although largely understood to be permanent and well-established within the world of display advertising, is still very much in its infancy with respect to online video. Here are three of the biggest pitfalls I would flag to any advertiser venturing forth into this nascent environment:
First off, don’t trust—and definitely verify. When Ronald Reagan was negotiating with the Soviets about nuclear arms reduction he famously said, “Trust, but verify.” In contrast, when it comes to real-time-bidding platforms, advertisers are being forced to trust blindly – and receive no verification at all.
All real-time-bidding (RTB) platforms should offer pre-bid reviews of the inventory they intend to sell, and many do. Unfortunately, most of this information is utter nonsense.
Why? Because most RTB systems can only “encourage” their inventory providers to offer pre-bid inventory reviews as part of an unofficial “code of conduct.” The inventory providers have full control over what they decide to share and can easily manipulate what data and information they make available to advertisers.
In fact, no member of the advertising ecosystem, including the RTB platforms themselves, typically bothers to vet the quality or accuracy of pre-buy or post-buy data. As a result, the process of buying online video ad space in real time is usually opaque and misleading for advertisers.
Second, know what you’re buying.
Believe it or not, most programmatic online video ad inventory is not “pre-roll” as we know it. The majority is display inventory that has been refashioned to contain an IAB standard format online video player. Much of this inventory is distinctly low quality. In fact, during our regular pre- and post-bid audits, we see a growing level of RTB video inventory that is destined for inferior in-banner positions on sites of a spurious nature.
We call this “fake in-player” with muted content or “silent gross rating points.” This means that more often than not, consumers never even see or hear the ads.
And lastly, man cannot live by technology alone. Unbeknownst to most advertisers, the underlying RTB technology across both display and video is relatively new and unproven. For example, during a recent integration program we encountered two major RTB exchange platforms whose core technology had failed in the space of one week alone, rendering both platforms down and unavailable for most of a day.
RTB platforms claim their services are fully managed and therefore largely immune to dark periods, but from our auditing experience, we’ve found that there is no automation. A buyer cannot rely upon an RTB platform being available twenty-four hours a day, seven days a week and has no way of fixing a trading problem without a manual phone call.
How, Then, to Proceed?
In-banner video advertising inventory is by its very nature limitless in volume. It can be produced at a moment’s notice, without the need for quality long form video content to surround it. Because of RTB, advertisers are getting lower CPMs—but are also being pushed into opaque in-banner positions through a corrosive cycle of quality reduction and limited reach.
At the very least, demand side platforms (DSPs), trading desks and private exchanges that feed off RTB exchanges should be allowed to run their own pre-buy reviews so they can fully vet inventory prior to placing a bid for inventory. Because DSPs and trading desks are tied into the ad agencies—which in turn buy online video advertising inventory for advertisers—this may go some way toward improving the suboptimal online video RTB audit reports we see on a daily basis.
That way, when the conversation with advertisers about “going programmatic” comes up again, we’ll be able to get past the misleading focus on cost alone and instead have an honest conversation about quality.