While there is no single definition of programmatic media buying (PMB), it is certainly a hot topic in the world of Internet marketing, and it is growing fast. In fact, a Business Insider article claims that real-time bidding, a key component of programmatic advertising, will account for over $18.2 billion of U.S. digital ad sales in 2018.

Despite its popularity, the entire process of programmatic advertising remains ambiguous to many publishers and advertisers. Here, I discuss a couple of the problems with PMB as well as some of the Association of National Advertisers’ solutions.

The problems:

  • For publishers:
    • According to Ad Week, AOL surveyed advertisers, publishers, and agencies. Only 50% of publishers claimed to have a strong grasp of how programmatic advertising works.
    • The aforementioned BI article states that publishers “stress that there is ‘too much complexity,’ perhaps implying there are layers of middlemen squeezing out their margins.” An ANA Magazine article titled “How to Stop Programmatic from Being Problematic” verifies this: “In every transaction, there are between three and 10 of them (e.g. exchanges, demand-side platforms, ad servers, verification vendors, data vendors, etc.).”
  • For advertisers:
    • Like publishers, many advertisers don’t fully understand the PMB process.
      • This Ad Age article cites an ANA/Forrester survey of 153 marketers conducted in February and March of this year. Only 26% of respondents said they knew what programmatic buying is and have actually used it.
    • Are we running out of space (and money)?
      • The BI article states that prices for programmatic ads are increasing for almost all ad types as demand outpaces supply.
      • It also reveals that the effective cost per thousand impressions for social advertisements was up by 64% between January and April of this year, compared to the same time period in 2013.

 

The solutions:

Check out the ANA Magazine Spotlight on Programmatic Media Buying. The previously mentioned ANA article warns readers of the potential dangers of using this technology and provides advice on how to use it safely.

The key to using PMB safely? Oversight. The article advises giving the programmatic buying process at least the same level of attention and commitment as traditional ad buying. This will help you avoid entering a fraudulent void. Contact the third parties involved and make sure you’re getting what you’re paying for.

 

“But I still don’t really know what programmatic buying is…”

For more information on programmatic buying, join ANA’s “The Essentials of Programmatic Buying” webinar on Wednesday, September 10.