Around the turn of the decade, I went around giving a talk titled The Programmatic Dog and Pony Show to anyone who wanted to listen. The talk was attempting to dispel some of the most misleading myths surrounding programmatic advertising. There were three primary myths I was interested in dispelling:
- Programmatic is about culture change (and not about technology)
- Programmatic is not guaranteeing efficiency
- Programmatic does not have to be complicated
I was doing this as it seemed that nobody actually was taking the time to think about programmatic theoretically, as everybody was too busy thinking about doing it. In this respect, not much has changed, except now people are even busier actually doing it, and there are more people involved in the busyness. To highlight this problem, amidst all the noise about programmatic advertising, you will be hard pressed to find a straight answer to what it actually is. By definition, it is exactly the same thing as it was back then.
One of the key arguments surrounding programmatic advertising, still today, is how it introduces new efficiencies into advertising. If this was true, then online advertising would be more effective now than it was before the introduction of “programmatic”. But it’s not. It’s less effective in terms of the actual process i.e. putting an ad online and the processes thereof, and it’s less effective in terms of the result the advertiser gets.
Let’s first unpack the part about procedural (in)effectiveness. Here is another slide from my Dog and Pony Show. It shows how the traditional online media order process looked like. Horrendous I said, and actually thought that at least in this respect things would become better.
Better think again. At least back then it was possible to create such a diagram of everything involved, but that is no longer possible today as everything is hidden behind opaque technological and legal structures. One of the main causes for opaqueness is associated with how programmatic advertising platforms effectively allow buying inventory from hundreds of thousands, or even millions, of sites automatically. So by its very design of being effective, it creates the kind of inefficiencies that nobody knows how to handle.
Then there is the kind of efficiency, which is related with the result the advertiser is getting in return for their investment. An essential point here is to consider where a lot of the money was still 6-7 years ago. That thing called TV.
The thing about TV is that we know it works. This is not something we can say about programmatic advertising. What we do know, is that there is rampant fraud, transparency issues, funding of terrorism, and many other factors that are not found in TV. It’s not just TV, but even direct premium publishers buys (at least when there is no audience extension), where the issues of programmatic advertising are not a consideration at all. I’ve never seen a single study or a shred of evidence, that suggest programmatic advertising being more effective than traditional online media. On the contrary, all the available evidence suggest the opposite.
Then the final point, on culture change. In the WFA’s Guide to Programmatic Media in 2014 I introduced the idea that advertisers should consider media as an asset they invest in, not something they spend on. It didn’t happen, media is still being “bought” as opposed to “invested on”, and advertisers are still mostly considered with being able to spend their budgets (as opposed to inventory selection). In fact, because of the complexities that had been introduced in the past years, buying itself have become so complicated, that unlike pre-programmatic, inventory selection is hardly a thing.
The final myth, about programmatic being complicated, people believe in it more than ever before. Actually, this perceived complexity is widely used as a way to explain the many issues that have come together with the wider adoption of programmatic advertising.
So, in an attempt to put all this in to some kind of clear context, I guess that we went from this in 2011:
To this in 2017:
Thanks for reading, now hit that social sharing button and help more people find this article!