5 things we learned about programmatic in 2014

Programmatic buying may solve some of the industry’s problems, but it’s also creating its own set of issues. As 2014 progressed, more and more brands, agencies and publishers either learned the programmatic ropes or enhanced their approach to it. But programmatic advertising is a complicated, evolving area that the industry is still grappling with. Here’s what we learned about it this year.

The industry finally got serious about fixing ad fraud.
Digital publishing has gotten drunk off cheap traffic, and fraud is the hangover. The last 12 months have revealed an unsettling truth about the relationship between programmatic and fraud, which seem to be inextricably bound. Multiple reports this year from a variety of fraud-detection vendors underscored just how bad the fraud problem has gotten — a problem, granted, which is in their interest to exaggerate.

Still, a recent report from the Association of National Advertisers and White Ops said that up to 50 percent of publishers’ traffic is fraudulent and will cost advertisers $6.3 billion next year. Unsurprisingly, fraudsters are particularly obsessed with video, which nets them higher rates than display ads. White Ops said that bots account for 23 percent of video ads, double that of display ads.

The good news is that while fraud is still a big problem, the industry is working together to fix it. In November, three of the big ad industry bodies, banded together to form the Trustworthy Accountability Group, which plans to tackle the fraud problem in part via new certification and monitoring initiatives. Think of it as digital advertising’s AA.

The era of viewability comes closer but isn’t here yet.
Fewer industry buzzwords got more attention this year than viewability. While the standard got the official Media Rating Council go-ahead — 50 percent of an ad in view for at least one second — viewability remains something that’s great in theory but much more dicey in execution. Group M and Unilever took the standard further in October when they announced that they will hold their partners to 100 percent viewability with video, standards Condé Nast agreed to a month later. Still, some in the industry say that viewability isn’t ready for prime time, despite all its advancements this year.

Publishers are getting more sophisticated with their programmatic strategies.
2014 might be the year that publishers stopped worrying and loved the bot. Many publishers, including The Economist Group, Condé Nast and Tribune Publishing, have retooled their approaches to programmatic by adopting their own private marketplaces, retraining their sales teams and trying to evolve programmatic channels beyond selling remnant inventory. Hurdles remain, however. Despite the programmatic promises of efficiency Dennis Publishing is still worried about automated selling cannibalizing its direct sales. The New York Times, too, has pushed back on the idea that all selling will be done programmatically. Publishers are also dealing with some of the technical headaches of their programmatic strategies, particularly those surrounding private marketplaces.

It was a big year for ad tech deals.
Depending on how you look at it, the ad tech world either got a little bit smaller or a little bit larger this year. Acquisitions were rampant: Facebook acquired LiveRail in July, Rocket Fuel bought [x+1] in September. In November alone, Yahoo paid $640 million for video ad platform Brightroll and Rubicon Project paid $30 million for iSocket and Shiny ads, both of which focused on programmatic guaranteed.

Transparency is still a major concern.
Regardless of how it’s defined, transparency remains one of the biggest issues with the programmatic supply chain. On the client side, brands worry about how agencies are bundling their service and media costs together, which makes it tough to know whether they’re arbitraging inventory and keeping the spread. A survey published by the Association of National Advertisers in July said that this was one of the biggest concerns shared by advertisers. The World Federation of Advertisers posted similar finding in its own study published in September.

In another definition of transparency, brands are also concerned about their lack of visibility into where their ads are appearing, what they’re appearing next to and who is seeing them.

“Transparency really does really mean different things to different parties,” Mike Margolin, svp, director of audience strategy at RPA, said in November. “It’s probably too much to expect for an agency to have access to every bit of data insight, but that doesn’t mean they shouldn’t be trying to get as much as they can.”


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