The all-encompassing current in digital runs towards performance. Digital marketers and the technology they use try to reach more people more accurately for less money. Sounds good right? Who doesn’t want to get more bang for their buck?

The advent of programmatic advertising, trading impressions from demand side platforms (DSPs) to supply side platforms (SSP) in real time, was sold as a boon for digital advertisers because it promised to find audiences wherever they were. No longer did advertisers have to do deals with publishers directly and speak to those audiences, the audiences became decoupled from context. The assumption is that programmatic gives you real audiences, and not just the vague customer profiles that publishers used to provide.

The bonanza began – and continues into 2020. Strong market competition has driven costs down so that programmtic is often the cheapest way to achieve broad reach across all audience segments. But there are four main issues with programmatic as a practice that we must think about as digital marketers. And when we contemplate these issues, it’s very hard to come to the conclusion that programmatic should be an integral part of any digital campaign.

Problem #1: These are ads that no one wants to see

Let’s start with the consumer. She is surfing the web looking at recipes for gingerbread cookies for her daughter’s school event next week. She visits a recipe website where she is bombarded by pop-ins, interstitials, and banners that take up the whole screen. She might not even be able to find the actual recipe part (food websites have deteriorated particularly badly). Did she want to see any of that sponsored content? Was she there for the ads? Of course not.

When we think of digital ecosystems we need to think of context. Not context in the traditional way of saying that I only want to advertise my lipstick on beauty websites, but the context of what someone is doing when they are viewing content. When people are reading news websites they are doing so because they want to receive information – not your ad. When people are playing a game on their phones they want to play the game, not stop what they are doing and click on your ad (this is why so many games trick you into clicking by creating slights of UX).

This is why social media is such a strong choice. When you check Facebook or Instagram you don’t know what you are going to find in terms of content. You are browsing with no particular end in mind other than to see what’s up. This is the context where you are receptive to content because advertiser content is similar to what you are already looking at. Passing by the ad is just a scroll, the same way you pass other content, and it takes up the whole mobile screen – without coming between you and the content that you want.

I cannot think of a single example of a programmtic environment when the ad is welcome. Just look at the adblocking trend. People have been bothered endlessly by pop-ins, push notifications, ads that slowdown the page load. Ads that open when you try to close them… Brands that want to bother people will not win.

Problem #2: It does not respect customers’ data

At the moment when you click on a link to open a webpage, the DSP takes the information that it can glean from your device and cookies to broadcast information out to the SSPs to see who wants to pay to hit you with an impression. If the DSP connects to my ad servers and I deliver my ad to you, we could say that this is a good practice. People don’t like advertising but irrelevant advertising is even worse. If it ended there, that would be fine.

But it’s not true. Each time a DSP broadcasts your visit, this information goes to every other SSP out there. While the result is one connection to deliver one impression, no one has any idea where all of the information goes. The information involved in that call can include things like your age, gender, location, browsing history. Sure, it doesn’t have your name, but if it has your device ID, it might as well be your name and social security number since we don’t change our phones everyday.

If this is frightening to you, it should be. In order for programmatic to work properly there has to be a lot of options out there, and this requires companies to play as loose as possible with consumer data.

It’s hard to see this not blowing up in the coming years when governments and society wake up to the fact that way too much information is in the hands of way too many actors. Just like the GDPR, we will certainly see a clamp down on rogue practices once they come to light. For now these actors are protected behind a veil of technical terms. It won’t last.

Problem #3: It’s a pain in the ass to integrate

Campaigns that use programmatic suffer from certain technical realities that make putting them online a huge pain the ass compared to the other digital options out there. From costs like ad serving to having to implement partners to ensure brand safety (like IAS which costs not just money but also time to set up for each campaign), programmatic is easily the most complicated type of digital advertising out there. The programmatic promise of performance conveniently omits these facts. When you factor them in though, the equation starts to heavily tip away from talking about programmatic as being performant.

Take brand safety. Because you don’t really know where your ad is going to go (unless you are using inclusion lists, which sort of eliminates the whole reason to go programmatic) you need to make sure that you don’t end up trying to sell Corona beer next to an article about the coronavirus. When unsafe content is detected, it’s already after the bid has been accepted by the SSP, so the software stops your ad from being displayed. You still pay, of course, for a blank impression.

And don’t even get me started on banners (you didn’t get me started of course, I’m writing this on my own volition). Creating animated banners with call to actions that always look a bit pixelated and never load fast enough, all to try and push a message to the right target but at a very inconvenient time. The time spent trying to refine a banner is wasted. We are living in an era of video, so use video programmatically and forget about coding HTML5 banners. Come on, it’s 2020 already!

Problem #4: It doesn’t perform 

For every single campaign that I’ve seen, programmatic display and video is more expensive than social, for both reach and clicks, drives less qualified traffic (with higher bounce rates) and has worse viewability (where half of your ad is visible on a screen for 1 second – are you kidding me??). The idea that programmatic is less expensive doesn’t take into account real KPIs.

The reality is that social platforms and YouTube offer almost full coverage of most audiences in western countries in a context that is more receptive to brand content for less money. Isn’t that how we should be measuring performance?

If you don’t want to put all your eggs in one basket – and social platforms also have their own problems – then you could justify finding other ways to go about your digital advertising.

Oh, and one more thing

Programmatic is bad for publishers too. The race to the bottom in terms of pricing has meant the steady decline in ad revenue to independent publishers – particularly those not big enough to have a group or ad sales people who can bring in brands and partners and pay a fair deal for integrated ads. Sure, anyone can put a widget on their page and start serving ads, but the revenue from those ads doesn’t even cover a yearly Premium WordPress plan unless you have a huge amount of traffic. Then there is the proliferation of fake news and clickbait sites that try to clump together traffic by delivering programmtic impressions which is clearly reducing the quality of the Internet.

 

2 thoughts on “Programmatic is Problematic

  1. As someone who works in programmatic marketing, this was a very insightful post! Programmatic definitely has its shortcomings. Campaign managers definitely need to continuously optimize their settings. With regards to your point on ads that no one wants to see, what are you thoughts on the introduction of rich-media ads and other formats that allow for more user engagement?

    1. Thanks Melanie! I do think that there are opportunities for more interactive formats, anything new will by definition catch more eyes but it can also deepen storytelling. The context is critical though between places where people are browsing, like the homepage in The NY Times app, and when people are in an article where they might want to finish reading (or watching) before being interrupted. Personally I spend a lot of time trying to find ways to implement formats that are engaging, I prefer that to video in many cases since video is passive.

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