The new face of programmatic: efficacy over efficiency

When ad tech vendors and agencies toss out the word “programmatic,” the word “efficiency” is rarely too far behind. The promise of programmatic advertising is that it speeds along the buying process — and cuts down on transaction costs.

But many in ad tech are trying to shift the discussion away from “efficiency” and toward “efficacy.” Automating the ad display process is useless, the argument goes, if those ads aren’t relevant to the people they appear in front of. The same goes for ads that Web users never see or ones that appear in front of people too frequently.

“When we talk about efficiency, we’re missing the issue,” said Josh Jacobs, president of digital platforms and partnership, at Omnicom.” Efficiency isn’t an end that matters in any way, shape or form. Efficacy is where the promise of programmatic truly kicks in.”

“It’s just not about the cost of the media. It’s really what the impact is on performance,” said Brian Decker, managing director of client leadership at Mindshare.

Brian Silver, vp of ad platforms at Yahoo, also agreed that marketers should be looking beyond automation as a reason to get on board with programmatic, which is more so about how the unification of technology, algorithms, data, analytics help improve campaigns. Efficiency is the byproduct of programmatic, not its end point.

To this end, Yahoo in particular is selling advertisers on the power of its data-driven advertising dashboard, which is focused on bridging campaigns across multiple channels and platforms, not lowering rates.

The other issue with “efficiency” is that it has a different definition depending on who is talking about it. For advertisers, “efficiency” often means paying less for the same number of impressions. Agencies hear it and think of how it can help reduce their head count or help them focus on bigger, more strategic projects. And for publishers, “efficiency” is a word to be feared because, when an advertising partner uses it, they’re typically looking to pay less for more.

But all of those definitions might be missing the larger point.

“The reason that programmatic is so powerful is that it allows us to finally stop thinking about how we make media cheaper or how we cut more resources or lower rates,”  Omnicom’s Jacobs said.  “Instead, it gets us to start thinking about how do we actually deliver real advertising results that drive our clients’  businesses,” he said.

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