In the march towards automation, greater control and transparency, more advertisers are opting for programmatic buying of digital impressions than ever before. Be it banners or video campaigns, the ability to cherry pick which impressions matter and bid on them has empowered the advertiser ecosystem, delivering better results and greater efficiency. By 2017, U.S. mobile programmatic media buying is expected to reach $21.22 billion, or 78 percent of overall mobile display ad spending, according to eMarketer. The growth the programmatic marketplace is experiencing is undeniable, as it becomes a mainstay of digital advertising. A study by AdRoll found that 98% of marketers surveyed expect their programmatic ad budgets to increase or stay the same in the coming year, while 87% of marketers believe programmatic ads provide a greater return on investment (ROI) than traditional media.
There is no doubt that programmatic has revolutionized online media buying and that it offers significant benefits, but this road to opportunity is ridden with obstacles such as Viewability and traffic fraud. Mobile programmatic advertising can be challenging in many ways but when done thoughtfully and strategically, the ROI can outweigh the challenges.
Mobile Programmatic: The Three Biggest Challenges
Any revolutionary method or new technology brings challenges and it is no different for programmatic advertising. There are three major challenges surrounding programmatic advertising – Viewability, ad fraud, and ad blocking. While these are disturbing, they are definitely not insurmountable.
The Battle for Viewability
Ad impression Viewability is an important aspect within online display advertising and continues to be a challenge for programmatic advertisers. The advertisers will only want to pay for the impressions that have been viewed by a human, and not for any others. All the major associations and governing bodies are addressing online and mobile advertising Viewability standards in an effort to bring the industry closer to 100% Viewability.
As advertisers demand higher standards for more effective ads, publishers and developers must also be proactive in understanding the problem and exploring ways to address the concerns, or risk losing valuable advertising dollars. These concerns have given rise to new players in the advertising ecosystem which offer advertisers the peace of mind of independent measurement of viewable impressions. Advertisers can drive more effective ads by leveraging partnerships with such players (e.g.: MOAT, Integral Ad Science, DoubleVerify). As the industry and technology evolves, new standards will emerge for mobile advertising, and Viewability standards will be re-defined from a pure buying-based model around served impressions, to that of viewable impressions.
Ad Fraud and the Scourge of Non-Human Traffic
Ad fraud is the most significant programmatic advertising problem but is not exclusive to programmatic alone. One type of fraud that is of particular concern is impression fraud, when ad impressions are falsely generated to inflate some impressions made, causing advertisers to spend more. This is also referred to as bot behaviour. Ad fraud has become such an important area that big ad networks have started selling “fraud-free” ads in the last couple of years. The business for preventing ad fraud is potentially even larger. One way advertisers can do so is by buying impressions from publishers and supply side platforms they know and trust, and who offer transparency and enforce safeguards against ad fraud. Identifying and eliminating bots requires systemic analysis of impressions and clicks, to ensure advertisers only pay for valid, human impressions.
The Industry’s Biggest Threat – Ad blocking
The estimated global economic cost of blocking ads will reach $41.4 billion this year according to Adobe and PageFair. The debate within the publishing world is whether to force users to pay a small fee for ad-free content or serve relevant and high quality ads which can be accessed without ad blocking software. Ad-free content poses a risk to the advertising industry, particularly in the programmatic world.
The continuous growth in the popularity of branded social media has proved that consumers don’t really care whether the content is sponsored or not--they just want it to be relevant and engaging. Currently, ads are intrusive, boring and unavoidable, which is driving users to block ads. The key to getting this right is to develop a targeting platform capable of listening to consumers, understanding their behaviour with genuine consumer insight using performance metrics, and thus adjusting the advertisements presented to them.
The Future of Programmatic is Bright
As the industry evolves, there will be a push towards quality and efficiency. The progress that come with programmatic clearly outweigh any short term challenges. Despite these challenges, programmatic technologies are evolving and adoption is increasing dramatic. More importantly, programmatic is attracting an ever-increasing share of the global digital advertising spend and growing confidence in programmatic solutions. Advertisers can become familiar with programmatic advertising platforms by understanding algorithms, defining how targeting works, and implementing the following actions to overcome the challenges:
The Road to Success
Clearly the future lies in programmatic ad buying. The shift to programmatic will be accompanied by its fair share of growing pains vs. the benefits of quality data for targeting and the promise of greater transparency. By adopting innovative solutions, programmatic advertisers can navigate the near term issues and lay the groundwork for long term success.
Programmatic will become a one-stop solution for delivery of all types of digital ads with rich media, or videos, across both web and mobile platforms. This provides a tremendous opportunity for both advertisers and publishers with an immediate need to educate the market, adapt to the ever changing requirements, and to localize and customize ads.