Is programmatic advertising all it's cracked up to be?

The Gartner Hype Cycle can be remarkably useful in describing the acceptance curves for numerous technologies. And for programmatic ad buying, it has proven remarkably apt.

Programmatic buying burst onto the scene earlier this decade with the promise of easing the process of booking digital campaigns, and rapidly ascended to its peak of inflated expectations in Australia around 2015.

Then in early 2017, it plunged into its trough of disillusionment. Pundits began questioning its true ability to boost effectiveness, and whether its cost matched its benefits, especially when campaigns were booked through an agency.

At the same time, a significant brand safety scare at YouTube led many brands to question whether they had sufficient oversight of how and where their dollars were being spent, and saw many pull out of programmatic buying on that platform.

Programmatic promised to make the process of digital campaign buying easier, and naturally brands were attracted by that. While its hype and subsequent disappointment remain topics for debate, there is no question of its impact on how digital advertising is bought and sold.

“This is classic Gartner Hype Cycle,” says OMD’s group business director, Jonathan Betts. “I genuinely believe we will climb out to the more long-term, sustainable expectation about the value it can provide and where it is useful or isn’t useful.”

Betts works on OMD’s media team for McDonalds, where a programmatic approach is used to support 70 per cent of the client’s display, video, and social platform advertising. He says two key reasons underpin his team’s reliance on programmatic.

“Operationally, it is the most efficient way to enable our teams to buy and deliver the campaigns that we need to get away,” Betts says. “For television, a single TV spot on a national network could be reaching one million people with a single ad. Whereas to reach a million people in online you often have to deliver a million separate ads.

“And those fundamental differences between the two channels mean that you need different technology to deliver the equivalent outcome.”

The second reason is another of programmatic’ s much-touted benefits - better targeting and more sophisticated approaches to our campaigns.

“It allows us to do things like advertise to people who are part of the customer CRM database,” Betts says. “It allows us to use those people as a group, to ask who else can we find online who actually have similar interests or behaviours to this group, to try and find other valuable customers for us.

“And it allows us to vary the message we show to people, based on a number of different factors, whether it is time of day, location, external factors, and what we know about that audience in term of demographics or their level of engagement with McDonalds as a brand.

“All of those things which we believe makes the performance of our advertising better are enabled by having technology that enables us to do that.”

Making data actionable

WA-based second-hand goods retailer, Cash Converters, has also found programmatic is essential for delivering real-time actionable data.

 “Our challenge is to be able to have a single view of our customer across both online and offline, so the data points are critical,” says chief marketing officer, Alice Manners. “What programmatic provides us with is that ability to reach audiences in an effective way. So part of it is technology, but the more important part is the people and teams who use that data.

“What we are doing is getting to that nirvana of reaching the right person on the right screen with the right message.”

While programmatic ad buying has received its inevitable kicking, perhaps the real problem has not been with the practice and technology itself, but how we have been using it. And one of the key issues has been ensuring ads purchased programmatically don’t turn up in the wrong places.

For Cash Converters, Manners says she and her agency Dentsu Aegis network perform a series of checks, including blacklisting and whitelisting various sites, as well as using pre-bid technology for verification of content and contextual relevance.

“A smart operator needs to ensure you have all of those levels in place to ensure you have the right audience and in the right context,” she says.

At OMD, Betts says his team solves the brand safety aspect for McDonalds by placing a strong focus on where the advertising actually runs.

“We have very limited investment into what we would describe as open exchanges where there are thousands of sites we could run against,” he says. “And if we do that, we have very strict inclusion and exclusion lists that we apply and we use technology to provide additional brand safety.”

Up next: How programmatic is transforming creative