In 2017, $45 billion in digital advertising will be transacted through programmatic technologies. While this is impressive for a still young industry, it represents a mere fraction of what could be addressable when we unleash innovative technologies to solve the complex challenges facing advertising today.
If properly nurtured, programmatic technologies that rely upon data and technology to deliver the hard to replicate combination of both precision and scale are poised to become the preferred method for buying and selling all advertising—regardless of platform, screen or geography. Yet, while the opportunity ahead seems tantalizingly close at hand, we must overcome a critical hurdle for both buyers and sellers: trust. A recent survey conducted by the CMO Council found that one third of chief marketing officers avoid programmatic advertising because of mistrust and confusion.
Unfortunately, a proliferation of bad actors in the digital media supply chain have continually sacrificed long term credibility in exchange for short term financial gains. Recent headlines about fraud, non-transparent auctions, brand safety and domain spoofing are all symptoms of the underlying illness infecting advertising.
This is not the first time advertisers have questioned a digital model. Back in 2005 I was helping lead the search business for Yahoo! when Businessweek published “The Dark Side of Online Advertising,” a highly critical exposé into the perceived prevalence of click fraud. The article served as a major wake up call and advertisers expected the search industry (Google, Yahoo! and Microsoft) to take important steps to ensure a clean, well-lit ecosystem existed for search advertising to flourish.
As a result, the industry’s top players came together to solve the trust issues around search. As we work to build trust once again, there are four important lessons from the early days of search advertising that can serve to guide our approach today:
1. Buyers and sellers must take control of the media supply chain
When so many technology partners crowd the space today (some demand side platforms are plugged into as many as 75 exchanges), it creates an opportunity for fraudsters to proliferate. As spend is funneled through an extensive array of third party players, each taking their cut, unnecessary complexities hamper visibility for buyers and sellers, further complicating their ability to assess ROI and increasing the opportunity for less transparent practices to seep in. Only a select few companies have made the requisite investment in quality and transparency to be worthy of brand investment. There are only a handful of high quality, legitimate exchanges to work with, not 75.
2. Buyers and sellers must insist on the highest quality inventory standards
This means becoming far more discriminating with partner strategies, focusing on working only with technology providers that have invested heavily and consistently to stay ahead of the quality arms race. A small or mid-sized ad tech company that specializes in arbitraging media or offering a single point solution, for example, is not equipped to make the investments needed to deliver real quality protections. And size alone does not determine a true commitment. Scaled players with a track record of repeatedly breaking faith with the market must also be held accountable. Buyers and sellers should insist on working only with technology partners that have invested in both proprietary technologies and welcomed third party validation such as TAG certification.
3. Commit to fighting counterfeiting
This must be at the forefront of every buy and sell-side partner’s agenda. Domain counterfeiting, or “domain spoofing” as it has been termed, is not a victimless crime. It robs publishers of revenue, dilutes their brand and defrauds advertisers of the intended consumer engagement. One important step that can be taken now is to urge the ecosystem to embrace ads.txt which helps prevent industry counterfeiting that occurs on exchanges that have chosen to under invest in quality.
4. There’s no excuse for a lack of transparency
As Starbucks CEO Howard Schultz once said, the “currency of leadership is transparency.” The same must be true if we are to build trust in programmatic advertising. As it relates to advertising, buyers and sellers should expect nothing short of complete transparency in the auction mechanics and contract arrangements utilized by their technology partners. You can begin to understand why so many CMOs have trust concerns about digital advertising when you consider that we are, even now at this stage in the maturation of programmatic, still having to call out the fact that some low quality exchanges peddle “rebates” (which are basically “kickbacks”) to incentivize the re-allocation of spend to their lower quality marketplace. Good exchanges can compete on the value they drive to both the buyer and the seller.
Earlier this year Procter & Gamble issued a powerful call to arms for the industry to take “action” when it came to cleaning up the digital media supply chain. P&Gs Chief Brand Officer Marc Pritchard urged advertisers to stop “accepting excuses” and he was right.
A decade ago the industry’s top players came together to solve the issues of trust that plagued search. In the ensuing years the search sector exploded in growth to become a trusted foundational pillar of consumer engagement today.
By focusing on fewer and more trusted partnerships, expecting and demanding the highest commitments to quality and anti-fraud efforts, ensuring brand safe advertising experiences and refusing to accept excuses for anything other than unambiguous and complete transparency we can once again build the same kind of lasting trust in digital advertising necessary to unleash long term growth.
If we can do that, we’ll look back and see that the $45 billion spent on programmatic in 2017 was only the beginning.