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3 Ways To Create A More Transparent Programmatic Advertising Ecosystem
OMI Forbes Article | Date: 2024-04-26
Programmatic advertising is in the spotlight today, and rightly so. It offers a revolutionary way to buy digital ad space at scale, saving advertisers time and headaches by replacing tedious manual processes. According to the Digital Marketing Institute, traditional ad buying includes "requests for proposals, tenders, quotes, and negotiation." Conversely, programmatic buying relies on algorithmic software to buy and sell online display space. The Institute says programmatic "uses traffic data and online display targeting to drive impressions at scale, which results in a better ROI for marketers."
As the founder and leader of a digital performance marketing agency, I know the upside to programmatic advertising is tremendous. Still, the ecosystem surrounding it has recently come under fire for a lack of transparency. Advertisers rely upon data, algorithms and strategic agency partners to decide where to serve their ads, but the practices and tools they are using aren’t leading to the best decisions or outcomes. As a result, their ads can appear on sites that don't deliver value, and the audience reach that was promised—to real people and real decision makers—just isn’t there. This disconnect is causing advertisers to lose money and not get a sufficient return on their investment.
For perspective on this issue, consider the ANA's 2023 Programmatic Media Supply Chain Transparency Study, which found that only 36 cents out of every ad dollar entered into a demand side platform effectively reaches the consumer: 29% of the ad dollar goes toward transaction costs, and as much as 35% is wasted—often on unproductive media that doesn't deliver measurable results.
Here are three ways marketing leaders can address this challenge and create a more transparent programmatic advertising ecosystem.
Start With Trust
When it comes to programmatic advertising, the media landscape is complex, and it's essential to navigate it effectively. Media activation is the process of preparing and launching a media campaign, including selecting and activating digital ads on various media sites. Having a media activation partner that you trust can make all the difference. These partners should avoid made-for-advertising (MFA) sites and ensure that ads reach real people who represent viable campaign targets.
When seeking out a partnership, one of the most critical areas of trust surrounds payouts. Because you invest substantial resources in campaigns, it's crucial to understand precisely where every slice of the allocated budget goes and how the campaign is being run—from the programmatic platforms to the sites serving the ads and every partner or player who touches those ads across the ecosystem.
Many times, these payouts are not equitable or favorable for advertisers. That’s why you must ask your media activation partner for detailed specifics about their processes. They need to be completely transparent about their actions, including how they select the best channels and the strategies they use to accurately target, activate and engage the right omnichannel audiences.
Reach Real People Who Are Ready To Buy
Unlike email, where execution costs are low, digital advertising costs can multiply. It's essential to get in front of your target audience while the opportunity for conversion is at its peak. That's where deterministic intent data can give you an advantage. It allows you to identify and connect with buyers and decision makers who have already indicated they intend to buy the types of solutions your brand offers. These buying insights are gathered based on prospects' digital behaviors like website visits and search history.
An added plus is that deterministic intent data lets you drill down to the device ID level to identify the most optimal decision makers for your campaigns. In addition, deterministic intent data reduces bot-driven ad fraud by steering your ads toward real people, making more funds available for high-quality media that reach audiences that are ready to buy. This results in improved campaign ROI.
My agency uses deterministic intent data to fuel more precise audience media activation for lead generation and customer acquisition campaigns that use digital advertising. To test out deterministic intent data, I recommend starting small. Ask an agency partner with expertise in this area to perform a proof of concept campaign. One approach is to layer deterministic intent data on top of customized third-party audience data (which should map to your ideal customer profile). This will enable you to reach audiences who have already shown an intent to buy, along with those who—based on demographics, firmographics and other characteristics—represent the ideal prospects for your offers.
Demand Reliable, Transparent Reporting
Many media buying and activation partners and platforms fail to report that as much as a third of the budget goes to media sites that deliver impressions without value. They also won't share how many clicks or views emanate from legitimate users. In reality, many come from click farms or fraudulent bots.
This is why transparency in the media buying process is critical and why reliable performance measurement and reporting matter. When reporting is grounded in transparency, you can make data-driven decisions, understand ad performance and optimize your campaigns. Ongoing metrics such as engagement, conversion rates and audience demographics provide a clear picture of the effectiveness of your advertising efforts, guiding you in your future decisions.
Lastly, advertising funds need to go toward what the ANA calls "viewable, measurable media"—real sites with meaningful content viewed by real people. Change will happen when advertisers across the industry hold their agency partners accountable to this standard and demonstrate higher expectations for digital advertising outcomes. Those vendors and agency partners who deliver the value and performance their clients expect will reap the rewards.
The digital advertising ecosystem holds great promise and will continue to grow. However, factors such as lack of transparency, poor practices and ad sites that deliver "impressions" at scale without value hamper this growth. Advertisers can drive more meaningful results and ROI by focusing on quality over quantity and adhering to best practices and strategies, but they can't do it alone. Agencies and other partners must also commit to delivering true value and putting their clients' interests first.
Paula Chiocchi is CEO of Outward Media, Inc., a provider of 145MM B2BC contacts, with email and digital IDs, that drive business growth. Read Paula Chiocchi's full executive profile here.
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