A virtual Wild West is an apt description for programmatic advertising. Or at least it was.
No one can deny that in the rush to claim premium inventory, rates and eyeballs, the industry made up rules as it went along, capitalizing on pockets of value. This is true of any new marketplace; technology and demand move faster than the ability to understand or police it. Transparency and efficiency took a back seat to FOMO as marketers, publishers and those in the middle saw new opportunities to stake undiscovered lands.
But, as with any market that matures, self-regulation becomes inevitable. It’s self-regulation that helps keep the market fair and clean, not to mention it’s also a good business practice.
Paving the path to clarity and efficiency
Our industry has reached an intersection, and we made the right turn. Figuratively, I should say.
The proliferation of new technologies like header bidding among top digital publishers has led traffic volume to soar to all-time highs—much to the chagrin of demand-side platforms being crushed by infrastructure costs that accompany the boom in ad opportunities. But thanks to industry leaders in marketplace efficiency like The Trade Desk putting pressure on the ecosystem, with initiatives like supply chain transparency and deduplication, we’re starting to embrace clarity and efficiency in a way that will improve our business and continue our trajectory.
Darwinism has gone digital.
Rates, inventory and the way budgets move are becoming more metrics-driven, and better understood. Any player in this exchange can see the market flex for themselves, and “fuzzy” practices are drawing greater scrutiny.
Those that embrace this paradigm shift will thrive; those that fight it will fail as every step in the programmatic chain looks to pare down partners. Darwinism has gone digital.
The sun is setting on unclear revenue-generating practices
Navigating the virtual wild west that is programmatic advertising from this lens is important for every company; like the decision not to engage in certain practices to maximize scale and yield despite what may have seemed like a business liability. To the platforms and partners who have pivoted towards a more direct and efficient path to the best available inventory, your efforts should be applauded. This move is good for business.
There are few greater success stories in marketing than programmatic advertising. From a series of zeroes and ones, engineers created a marketplace to monetize content when traditional methods were failing.
“Digital pennies” are now digital dollars. With the technology, systems and abilities that have been built together—coupled with innovations in accountability and transparency—publishing has an incredible future.
The programmatic paradigm has shifted from “more is more” to “fewer; better.” The adage of “where there’s mystery, there’s margin” has been replaced by marketers and the platforms they use demanding transparency, efficiency and accountability. What was once a gravy train in opaque revenue generation is being distilled to a smaller cohort of reputable players working directly with publishers and advertisers.
As more innovation is introduced in programmatic advertising, self-reported scale and efficiency metrics have been replaced by blockchain-inspired accountability. Simply put, objective measurement of media efficiency leads to consolidation, and consolidation trims the fat.
Whether it’s an SSP showing superior yield to a publisher, a platform proving incrementality to an agency or an agency demonstrating value to a brand—there is pressure on every part of the value chain to deliver superior results. The steps our industry is making towards creating a more efficient, objectively-measured, metrics-driven marketplace are aligning all of our interests.