In 2016 the majority of digital advertising budgets will be spent on programmatic ad inventory in both the US and UK.
Brands owners such as Procter & Gamble and American Express were relatively quick off the mark to specifically state that they wanted the majority of their advertising budget to be spent programmatically.
Certain agencies are going further, with a goal for 100% of the digital ads they buy in 2016 to have some form of automation.
But while this is a huge change for the industry, more is yet to come. Currently programmatic ads are sold in a four stage priority, very neatly set-out by the IAB.
First come the “automated guaranteed” or “programmatic direct” systems, which use technology to replicate the favourable pricing and certainty of placement of the industry’s non-programmatic direct relationships. At the bottom of the priority are the open Real-Time Bidding (RTB) auctions.
While the US has seen some use of automated guaranteed deals, the UK hasn’t quite been so keen, and few trading desks are demanding it.
Moves to integrate the industry’s established ad booking systems with automated platforms could breathe more life into the automated guaranteed market.
However, with the greater adoption and improved technology in the RTB markets, we’ve got to wonder – how long will this priority last?
The real-time bidding ecosystem
RTB systems have already improved to emulate some of the automated guaranteed channel’s benefits in private marketplaces.
The more sophisticated RTB platforms are affording ad buyers far greater levels of control over campaign effectiveness, new abilities to define the requisite performance of their chosen ad inventory and great value prices.
In fact one of the primary differentiators of the automated guaranteed marketplace is its utility when booking campaigns using non-standard ad creative.
Yet RTB systems are also introducing more unique formats which challenge even that benefit. Consequently the value of the automated guaranteed deals could be under threat, and they too may fall out of the ad buying priority.
Much depends upon which performance criteria are made available through the RTB systems.
1. More effective limits on bot fraud
Realistically bot fraud will never be solved regardless of the channel through which the ad space is sold.
However, it’s imperative that the fight against fraudsters continues, and the cleanest programmatic platforms should win-out.
The simplest tactic to follow is to opt for programmatic platforms that give access to a premium network of reputable publishers.
However, greater reporting on the legitimacy of inventory sources, instances of malware, fake impressions and masking of domain names will help the entire industry to end the scourge.
2. More guarantees of brand safety
In terms of brand safety, the minimum requirement for programmatic systems must be to enable ad buyers to select ad space verified by the JICWEBS Digital Trading Standards Group (DTSG).
Programmatic platforms that can distinguish ad inventory that both complies with and goes beyond these standards would be extremely helpful.
3. Combinations of targeting data
Certain ad technologies already enable targeting based on a combination of audience and contextual relevance.
However, easier compositing of brands’ own (“first party”) data, publishers’ (“second party”) data, behavioural targeting companies’ (“third party”) data, search string data, and the user’s precise and favourite mobile device location data will bring hyper-targeting to RTB systems.
As so many publishers are making more ad space available programmatically it should become increasingly possible to combine targeting techniques without compromising the scale of campaigns.
4. More native ad formats
The functionality of ad formats directly impacts campaign performance. Currently most of the ads available through programmatic systems are the ubiquitous and indistinctive IAB banners.
Everyone has been using these standard IAB banners for years despite complaints of banner blindness, their inherent lack of creativity, and intrusiveness.
As more ad buyers are seeking the best performing ad formats there is a growing demand for non-standard formats which outperform IAB banners – primarily the ever improving programmatic native ads.
However, at present most native ads find it difficult to scale across thousands of online publishers to achieve a campaign with sufficient reach across the mobile and desktop web.
Even the automated guaranteed deals can struggle with programmatic native ads. There’s just too much offline negotiation and constant customisation for most of these formats to be involved in a truly automated marketplace.
However, the choice of scalable, truly native ad formats available programmatically is growing.
These are being made available through RTB systems, offering more creative and native placements to positively surprise and engage consumers. There’s no reason to think that other non-standard formats will be excluded from RTB marketplaces in the future.
5. Deliver viewable ads
Comscore has verified that the majority of digital ads never actually have a chance to be seen.
This has resulted in viewability becoming one of the fundamental performance criteria upon which ads are now being selected. Organisations such as GroupM and Unilever are leading the way, with the most stringent viewability demands in the industry.
There are whispers that certain agencies will start trading on viewable impressions as early as Q1 2016.
Platforms that are trialling viewability performance campaign options have sometimes seen advertisers compromise on the number of impressions they buy, and even the media titles their ads appear on, in return for premium viewability.
However, publishers expecting to develop a higher yielding product line from “viewable cost per mille” (VCPM) campaigns in the future are likely to be disappointed.
Brands buying ads expect all of them to be seen, and don’t want to pay more for them.
What’s more, those platforms trialling viewability performance criteria often do so on a binary basis – i.e. either the ad formats pass the Media Ratings Council’s definition of a viewable ad (“half an ad for one second”) or they don’t.
However, that performance criteria and method devalues the performance of a great many ad formats that frequently display far more than 50%+ of every ad.
Those ads should not be marketed as being on a par with the lowest acceptable industry standard.
If programmatic platforms want to adopt such a binary method for identifying viewable impressions, it’s better to focus on whether 100% of the ads are viewable or not, and back it up by a service level agreement.
Alternatively, programmatic platforms could incorporate viewability score data from providers such as Moat, which will show the full spectrum and degrees of viewability, giving essential insight to ad buyers.
At an absolute minimum, programmatic platforms have to move away from predicted viewablility scores.
The technology and research providers are out there to deliver precise metrics on viewability. Soon there will be no excuse not to guarantee viewability through programmatic platforms.
6. Precise page positions
The precise positioning of an ad impacts its value. Currently, as long as ads are displayed above the mythical fold, most advertisers will be happy.
However, an ad placed further down a page can actually have just as much value or more if it displays within contextually relevant editorial at an appropriate point in the consumers’ engagement with the content.
Right now, it’s likely that above the fold ad space will command higher prices than those below the fold.
However, programmatic platforms that enable ad buyers to choose a range of page positions to display their digital ads will have an important additional control on their campaign budget as well as performance.
7. Optimum site depths for ads to appear
Loyalty to particular publications is dropping due to the ubiquitous sharing of deep-links on social media that take consumers directly to media titles’ articles.
Many people will view just one page of a media title before returning to what they were previously doing, or moving onto a different site.
This signifies that it’s less important – and arguably less valuable – for ads to appear high up in the media title’s page hierarchy, such as on the homepage.
Programmatic platforms enabling advertisers to select the site depth at which their ads should be displayed will give enormous control to marketers.
8. Optimum session depths are different
Just as it’s essential for an ad to appear at the opportune page depth and site depth, it is also important to calculate the timing of an ad’s display within the user’s session.
Many ad buyers will typically pay more through direct deals with publishers to have their ads displayed early in a user’s session, implying that they are the premium slots.
However, the more engaged consumers are with a particular subject matter generally indicates that they are more valuable to relevant brands.
It will depend upon the ad campaign, of course, but it’s very possible that the later an ad is delivered to the user, the more that user has qualified themselves as being valuable to the brand.
This could well mean that the ads will be displayed to fewer people, but the fact that they are displayed to a targeted user can in turn qualify those ad impressions as better value for money to the advertiser.
If programmatic platforms offered page, site and session depth controls we’d soon find the campaign sweet spots – where ads are displayed at the precise points in users’ sessions to be both qualified and most open to engaging with an ad.
Ultimately the programmatic markets will be rationalised into unified platforms. How quickly depends upon how fast new performance criteria and KPIs are made available through RTB systems.
Once ad buyers can make ad campaign choices based on more solid data and the actual performance criteria of ad inventory, so RTB systems will enable the purchase of the most premium inventory.