Programmatic spending is expected to double in 2016, reaching $20 billion. However, as The Wall Street Journal recently reported, there's talk among brands to move away from programmatic. The lack of transparency, low viewability of ads, and high fraudulence in traffic are often cited as the primary reasons.
When you consider that fraud represents an estimated $6.3 billion of that $540 billion, you can see why brands may be rethinking the programmatic value proposition. The counter arguments, of course, are the cost efficiencies gained through the ability to fill previously unused space, automate sales processes, and improve audience targeting.
Given all these factors, the reality is programmatic buying is a staple for most buyers. Yet the question is: how much should brands invest in programmatic when low viewability and high fraud continue to plague the industry?
After all, how can brand advertisers develop brand favorability or increase awareness if users don't see their ads? And how can publishers expect to boost engagement and attract high quality advertisers with low viewability and questionable traffic? They can't.
When done right, programmatic can deliver quantity and quality to both brands and publishers, and it frees them to focus on more strategic initiatives. But before you determine how much to allocate toward programmatic, let's first take a closer look at the viewability and fraud issues.
Viewability and fraud: out of sight, top of mind
When it comes to online viewability, brands have no tolerance for the "now you see me, now you don't" peek-a-boo media strategy, but that's what happens when 50 percent of an ad's pixels are in view for one second -- the minimum industry standard.
Meanwhile, despite significant advances to get ahead of bots, fraudsters still sneak their way onto websites. Fraud detection is a reality today and unless you're actively doing something to prevent it, you're enabling it.
When vendors and buyers elevate viewability and traffic requirements to get as close as possible to 100 percent in-view in a fraud-free environment, those involved in less desirable or questionable behavior will be sidelined as quality steadily improves throughout the industry.
By tackling the viewability and fraud issues directly, brands are in a better position to determine their programmatic spend with respect to their total budget.
So what should you spend?
Considering the anticipated $20 billion that will be spent on programmatic this year, it's clear that programmatic is a fixture in the marketing budget, but how much should a marketer allocate to programmatic?
While the answer will vary by brand, audience, price, sales cycles, and other critical factors, here are three ways to start the process of determining how much of your budget should be spent on programmatic.
- Evaluate your internal resources. Be honest about how much of your team's time is spent on activities that could be automated and how effectively you've been able to tackle new, strategic initiatives. The answer may lead to shifts in roles and responsibilities, and it may ultimately enable you to use your resources in the most cost-effective way possible.
- Evaluate your agency. Dig deeper into how much of your brand's performance is tied into your agency's performance. What is the impact of fraudulent traffic and viewability on their business model, and how aligned are you? The more aligned you are around business outcomes, the better you'll both be.
- Evaluate your technology partners. What you want to be looking at is transparency in the way they handle viewability and fraudulent traffic. Ask for guarantees and proof through a reputable third party. For example, the nature and frequency of the reporting, etc.
Programmatic offers tremendous upsides, but the industry won't be able to fully reap its benefits until low viewability and fraud are no longer tolerated. It's not an easy problem to solve, but significant strides have been made to bring programmatic closer to 100 percent fraud-free and in-view placements. Getting there also means that brands will have to abandon peek-a-boo media strategies and take a closer look at their role in addressing the viewability and fraud.
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