Programmatic ads: higher expenses, fewer advertisers. Here is why this is happening.

Programmatic ads: higher expenses, fewer advertisers. Here is why this is happening.

Programmatic advertising is splashing out more and more money but the number of advertisers using it is actually progressively decreasing. Such data, concerning a new trend affecting the US, were reported by the research entitled “Consumer Advertising – Maximizing Impact” carried out by  MediaRadar.

Such survey points out how, despite an increase in the expense by over 72%, over the last three years, the number of advertisers has shown a year on year decrease of 12%. Read it in Italian

Therefore, if it is obvious that, on the one hand, thanks to digital purchases and more efficient transactions, programmatic ads is still the spine of on line advertising; on the other hand, however, it is also clear that the system is facing a problem which can be summarized in just one word: mistrust.

According to the report, the biggest issue, which is causing such dispersion of advertisers, is the fear of jeopardizing the safety and reputation of brands. Basically, advertisers are afraid that the programmed eco-system, not always clear, may lead to more damages than benefits to their brands. Especially through the association with inappropriate contents.

The challenge to be faced is related to quality control, then, especially in the  overcrowded and populated platforms such as YouTube and Facebook (Report: Native ad buying surges 74%, programmatic slips 12%)

Consequently, programmatic ADV systems are currently evolving trying to improve safety measures to protect advertisers. Several different technologies have already been integrated in the above mentioned platforms. One of these is a system through which  white lists and black lists of websites in which to classify ads can be created: ads listed in white lists are trustworthy, those in the black lists are not, and should be avoided. Moreover, there are filters to be applied when purchasing advertising spaces. However, the point is that, quite simply, such tools are not used by advertisers and vendors.

So, it is a matter of culture and of communication between vendors and clients: if we consider that programmatic ads is a relatively “young” form of mediation which has experienced a really fast boom, we can understand why it hasn’t been fully understood and optimized on the basis of clients’ exigencies. Indeed, in 2013 only 7% of budgets was devoted to programmatic ads, while last year investments rocketed to 50%. And, despite fear and doubts, this year 4 out of 5 dollars invested in advertising, have been invested in programmatic adv. Nevertheless, programmatic ads on open exchanges is decreasing (44%), while the direct one is increasing pretty fast (56%). This proves that advertisers are aware of the value of programmatic, still, the system has to be fine-tuned. (Despite Challenges, Programmatic Is Evolving To Deliver On Brand Safety).

Various platforms have been working to reverse the trend: investments in technologies based on machine learning and AI have increased so to efficiently contrast, and even prevent, offensive contents which may damage brands reputation. Now, they just need to reassure advertisers.

What do you think of programmatic ads? Do you use open exchanges or the direct system? Tweet @agostinellialdo.

If you liked this post, please read also “Several new researches and forecast have confirmed it: online ADVs are mainly video based

Leggi questo articolo in Italiano