The biggest challenges programmatic advertising faces

Programmatic advertising is nearly universally acknowledged as the future direction of media buying.

But for all the heady forecasts — Magna Global projects global programmatic ad spend to be $53 billion by 2018— it still faces a raft of challenges. Ahead of the Digiday Programmatic Summit in Bonita Springs, Florida, next month, Digiday asked a group of brands and agencies about what they believe is the greatest impediment to the growth of programmatic advertising.

The executives cite everything from moving beyond cookies to publisher cooperation to the hype surrounding it as the be-all and end-all when it’s just a part of the media equation.

Mac Delaney, svp of client services, VivaKi
Programmatic marketing is only really possible when you have accurate proxies that can identify the person, less the placement. As the we move beyond the cookie as the industry’s first-generation proxy for identification, the challenge becomes determining what the new proxy(s) will be, how they will be defined and can they be leveraged outside of walled gardens. The industry hasn’t solved for this, not yet, so the greatest threat to programmatic would be the day the cookie is definitively dead and the industry hasn’t come together to standardize. Marketers could be left with no relatively seamless way to practice addressable marketing (of which programmatic is one form) across devices, publishers, or networks.

Amy Good, manager of Media Centers for Excellence, Nestle Purina
Publisher collaboration with marketers. We need site-level data, at its most granular, to ensure we are meeting brand objectives, collect data from our investments and store it in our own house to better meet consumer needs in the future.

Oscar Garza, director of programmatic and audience, Essence Digital
The biggest threat to programmatic is its own hype. The mad rush to add programmatic to plans could result in mixed results or no additional apparent value. Savvy programmatic advertisers focus on the fundamentals: validated foundation of data, insightful audience segmentation, organized media optimization, and sound measurement/analytics.

Angelina Eng, vp of media platforms and emerging media, Merkle
The biggest threat in programmatic is ad fraud. If agencies, marketers, tech platform solutions, tech system vendors (including ad servers, site analytics solutions, etc.) don’t actively work together to combat it, then millions (or even billions) of dollars will be wasted and the bad guys will win. Everyone has a responsibility to actively minimize ad fraud.

Matt Prohaska, CEO, Prohaska Consulting
The biggest threat to programmatic advertising is a gap in understanding and communication among sellers and buyers. We find more clients every week fortunately changing attitudes, realizing there is more to gain than lose now in programmatic, but managing expectations internally and externally with clients or ad tech partners is critical. A close second biggest threat to programmatic is the lack of sophistication in most of today’s major exchanges in not being able to handle transactions the way more buyers, and especially now sellers, want to conduct business. Audience discovery, price transparency, and programmatic guaranteed remain the three major gaps limiting even more liquidity today.

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