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Q&A With Advertiser Perceptions: How Agencies View Programmatic Advertising

October 10th, 2018   ||    by Charlene Weisler   ||    No Comments

As programmatic advertising evolves in the marketplace, studies abound tracking its progress and challenges. Videa’s recent change management survey measured how technology impacts TV advertising for reps, stations, and agencies, while companies like Advertiser Perceptions are fielding studies that measure attitudes and adoption by advertisers.

Advertiser Perceptions’ Kevin Mannion, chief strategy officer, and Justin Fromm, vice president of business intelligence, forecast optimism for the future of programmatic. Their studies show that it currently represents a majority of digital spending and an increasing advertising vehicle for television, as well as a significant increase in advertiser investment over the next few years.

First launched in 2016, the DSP/DMP portion of the study currently has five waves of results and is conducted twice a year. “We interview more than 450 advertisers who are directly involved in purchasing programmatic advertising and have worked with a DSP or DMP in the past year,” Mannion said. The SSP study started in January 2018. The second wave is in the field now with more than 150 executives who work for digital publishers and are directly involved in selling programmatic ads.

Both Mannion and Fromm shared their thoughts on the current state of programmatic, some major challenges surrounding it, and where they see it heading.

Weisler: What is the current state of programmatic?

Mannion: Advertisers are now buying the majority of their digital advertising programmatically. This year it’s 51 percent, and advertisers predict next year they’ll devote 55 percent to programmatic. The trend steadily favors ad tech because of the promise of efficiency and lower cost, as well as the opportunity to leverage data in the targeting of the right audiences. The ad tech spend would be even higher if not for that caution advertisers have about the dark side of programmatic. Will my ad appear in a brand safe environment? Can I trust that I will not be paying for unviewable ads or robotic impressions? Am I being charged fairly?

The entire digital ecosystem is moving toward programmatic. There will always be a place for direct publisher-to-advertiser deals for one-off mega-sponsorships, premium programs, and special campaigns. But programmatic has emerged as the way to buy advertising efficiently with all the advantages of machine learning and technology. For this reason, we’re seeing programmatic edge into other media, most notably TV.

What insights do you see from the study in TV programmatic?

Fromm: While advertisers currently invest less than 20 percent of TV budgets to advanced TV, they’re poised to increase programmatic linear TV [PLTV] buying quickly and significantly. In our Video Advertising Convergence study, advertisers ranked PLTV second only to [OTT/Connected TV] among advanced TV options, and 40 percent said they will be making a “significant investment.”

There are two reasons for this. First, agencies tell us that PLTV is easier for long-time TV marketers to understand because it entails the same inventory they are used to buying (particularly brands that activate on a local level), just executed in a different way. Second, with concerns on online brand safety, some advertisers are looking to gain the efficiency of programmatic in the primary medium they trust.

What do you see as the major trends in programmatic since you first launched the study?

Mannion: There’s a march toward mega-brands. Oracle bought BlueKai, Salesforce bought Krux, and Google bought Invite Media. Then Amazon and Adobe entered the field. Now AT&T is in programmatic having bought AppNexus.

Fromm: In TV, we’ll continue to see big media brands acquire digital programmatic players. Advertisers expect to apply precision targeting in mass media and they’re growing impatient with the inability to measure audiences consistently across media types. Soon, advertisers will accept only those advanced TV options that easily combine and measure PLTV inventory with traditional TV buys. Legacy players that own TV networks and publishing platforms need the capability to do that.

What are some of the major challenges for programmatic and recommendations for overcoming those challenges?

Mannion: Trust is the big issue: how to deal with fraud, bots, bad ads, and undesirable placement. These are perpetual challenges but they are more top-of-mind than ever with advertisers. Advertisers need to take advantage of the ads.txt initiative that identifies qualified publishers and quality inventory and support[s] private marketplaces and watchdog groups dedicated to brand safety and user privacy, like TrustX. Ad tech providers should dedicate more resources to guide advertisers and support campaigns once they’re activated. All can invest in blockchain technology which can bring a new level of transparency to the business.

Where do you see programmatic going three years from now?

Mannion: We will see programmatic spending rise steadily, to the point where it’s as much as 80 percent of digital, with the other 20 percent of spending on big premium sponsorships. Advertisers believe that ultimately their partners in media and ad tech will solve fraud, fee transparency, bots, and other trust issues. They also express faith that the industry will provide better measurement to provide the learning necessary to make smarter strategic and tactical decisions. Will this mean that the media business shifts away from people to math? Hardly. Advertisers will increasingly lean on the guidance of consultative partners to reach and surpass their objectives.

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