The future of programmatic
Mediatel's Steven Scaffardi speaks with key figures from the adtech and media trading sectors to discuss how the industry has been affected by Covid-19, last week's ISBA/PwC report, and what the future holds for programmatic
It’s been a rollercoaster ride with ups and downs, but there’s one constant shining through and that’s the spirit of collaboration. It’s been inspiring and reassuring to see how quickly all parties have adapted to change, constantly reviewing and pivoting to meet evolving demands.
Early on there was frustration, at least from the publisher side, where many premium publishers were experiencing record breaking digital monthly readership figures yet losing out on advertising revenue due to coronavirus-associated phrases being added to keyword blocklists. However, we all work together in this industry and the publishing community is also sensitive to the situation, and appreciates the concerns, tightened budgets and previously planned creative that’s just no longer relevant or appropriate.
Certain advertiser verticals have pulled budgets from programmatic, like they have with all other forms of media, but programmatically enabled channels haven’t been as hard hit as others. I think this is likely because of the benefits of being able to easily pause or start campaigns at the click of a button without facing any penalties or delays.
The benefits of technology enabled media buying have been highlighted in recent times and this will likely speed up the road to all media being programmatically enabled.
The initial response seemed to be a little reactive, which is understandable given there hasn’t really been a precedent for the impact we’ve seen within the programmatic space. I also think we were initially reacting very logically by looking at reduced CPMs and increased inventory whilst assuming this resulted in a no brainer to remain active.
We have, however, developed a far more sensible approach at trying to tailor opportunities to the specific needs of individual advertisers, trying to understand nuances and the sensitivities around consumer behaviour. It’s also important to recognise that we also need to take time to just be there for our clients. We’re ultimately all human beings looking to do a great job in testing circumstances so the best responses will see the strengthening of a client relationship during and following this period.
Liting Spalding: The market has been decreasing as a result of economic decline. This is temporary, although there has been a negative impact in the overall growth. All of the marketing industry has been affected by the pandemic with various extend. Programmatic, search and paid social however, are within the channels that are less impacted. This is a mixed picture across all agencies depending on their client portfolios.
Within programmatic, of course travel and automotive clients are more likely to pull budget from advertising. However, online, education, finance, even food and drinks clients are maintaining similar levels of advertising investment, if not increasing. We have also seen a major shift from OOH and offline advertising to programmatic.
When faced with a common threat, we are forced to survive and innovate, and I’m pleased to see examples of true collaboration across the programmatic sector, such as Google waiving Google Ad Manager fees for news publishers. Trade bodies too remain united and the joint publication of advice from ISBA, IAB, IPA, Newsworks and AOP on how advertisers can verify content suitability without blanket blocking keywords is testament to this approach and mindset.
This is the first time an end-to-end study on programmatic trading has been achieved with a world class auditor, putting beyond refute that something is awry in the supply chain. But this is not about pointing the finger, rather it’s about identifying how the supply chain can work more efficiently for advertisers, media and publishers – and thanks to this study, we are now in a position to move forward from all the speculation and presumptions, and take collective responsibility to address the issues.
This report offers a timely lens on the industry as bad actors have been weathering a perfect storm of obfuscation and opaqueness. Through the industry’s joint efforts and in continuing to highlight these issues, together we can draw up an improvement plan to ensure brands have transparency and accountability over their spend.
Azad Ali: The report in general is definitely something I fully support in being out in the open. We can’t really hide away from some of the difficulties that we are facing around transparency. Whilst the report highlights a number of potential reasons behind the unknown delta for untraceable spend, it would be difficult to speculate further on the causes without delving more into the data. What it does highlight is the need to have further conversations with our Publisher, SSP, Tech and DSP partners to ensure we can identify where the gaps are.
For the last 18 months we’ve had a lot of companies in the market claiming to be fully transparent, but it can be quickly established that the way transparency is interpreted can differ greatly between organisations and individuals. Having open dialogue and further collaboration is the best way to establish a fully transparent supply chain. Furthermore, empowering clients with this information will ensure that buyers who actually have the best interest of their partners at heart should prosper.
Wayne Blodwell: The report was across top advertisers, ad tech companies and publishers, so there is likely far more than 15% that goes missing for advertisers who don't have a sensible approach to programmatic. The main reasons for this were highlighted in the report; fx rates, how companies take/report margin, post-bid auction mechanics etc. It highlights a need to standardise a lot of the ways in which money flows and is reported through the system.
Richard Reeves: Now we have the facts, we can address what is happening, find out where this percentage is going and the impact it is having on publishers and advertisers. Each individual publisher can take practical steps to get the money flowing throughout the whole supply chain and we are issuing advice to our members around this. In the medium term, the goal must be to achieve a commonality in data sharing so the money can be audited – another issue highlighted in this study.
Increase will continue, as a result of tech development as well as more programmatic formats becoming available. Dare I say, apart from search and social, programmatic has the potential to cover the rest. Of course, it will take time and the process is different from region to region, but it’s inevitable.
Richard Reeves: Programmatic is now an inevitable part of digital publishing and many publishers rely on revenue generated though programmatic trading. Our own publisher insights from our quarterly DPRI (Digital Publishers Revenue Index) – conducted in association with Deloitte – shows that publishers continue to seek alternative revenue streams to advertising and, subsequently, programmatic trading. However, programmatic remains a large and significant part of total revenue. This, combined with the recent findings from the Supply Chain Transparency Study from ISBA, PwC and AOP showing that 15% of advertiser spend cannot be attributed, is cause for concern – this is money that should be reaching publishers.
Overall, publisher revenues are falling, both before and now during Covid-19. In the short-term publishers will be focusing on their core services but looking further ahead revised business models will become a priority with subscriptions and ecommerce key focuses moving forward for many b2c and b2b publishers.
Wayne Blodwell: The increase will continue because programmatic allows advertisers to be more flexible in the entire advertising process – from creative deployment, media planning/buying, reporting, optimisation etc. This drives improved cost efficiency which is clearly going to be on many marketers minds. It also works! Programmatic is simply an enabler of buying and selling, what you want it to do beyond that is down to each brand (i.e acquisition, ROI, recall, favourability etc.), but when marketing is being tasked to work harder, programmatic is setup to deliver on that.
Collaboration with the ICO is key. It’s important we get all the right measures in place around the consumer to ensure technology is built in a compliant way. Google Analytics has some outstanding features that can be connected to Google Marketing Platform for targeting needs. The platform guidance makes it clear that responsibility for privacy is the first step before integrating the analytics features and this is the correct methodology.
Azad Ali: It’s fair to say as an industry we tried to minimise disruption to the ways of working and attribution models whilst hoping small steps would make us compliant. The reality is we are somewhat reliant on some of the bigger players in the market being the catalyst for change. The most significant changes have been the recent and upcoming changes to the way browsers store data which will improve data protection whilst also having a significant impact on the way we target and attribute within the environment.
Thinking positively though – it will all lead to two main things moving forward. Firstly, increased collaboration with trusted partners such as our News Publishers who will have the best reach, data, context and engaged user base in this space. Secondly, continued innovation to solve problems, create solutions and excite buyers, suppliers, and clients alike!
Liting Spalding: In my opinion, programmatic was the channel that was shaped the most by GDPR. Of course, it won’t be in the same level of maturity compared with traditional media. However, the changes that have happened, technology-wise, have also been the fastest adopted. Moving into the cookie-less era, this is one step forward and most technology partners are preparing for it and are doing well. In my opinion, it’s the education for the public that needs to improve. There is also immaturity within the public understanding of data protection.
The future of programmatic post-lockdown will very much be in line with people's behaviour changes. Depending on the region, some could shift towards streaming TV and some could shift towards programmatic audio. It’s a trend that programmatic will be replacing more of the traditional media and even appear in similar formats, with more audience signals and rules to influence the impressions.
Richard Reeves: The stark warnings fired by the ICO one year ago were justified and demonstrated the complex nature of the digital publishing ecosystem. It has been paramount for all players to work together to listen, understand, and act upon concerns and issues – and that includes our working relationship with the ICO themselves. One output of the ICO working group is a document outlining proposed mitigating options, that recognises the complexities of the ecosystem, and acknowledges publishers’ reliance on other industries, technical solutions and trade bodies to meet their responsibilities as data controllers under GDPR.
We will continue to invest time and resource into GDPR and understand that it is our responsibility (and our members) not only to comply, but to encourage other stakeholders to recognise their responsibility and role in the entire ecosystem.
Wayne Blodwell: The IAB have made great strides with the ICO by conducting workstreams with their members. Frameworks for identity, contextual categorisation, consent management etc. are all bringing the industry forward in responsible targeting and measurement that doesn't compromise a user’s privacy. Small and big businesses have also innovated and created products/services to help improve the areas outlined by the ICO.
Of course, naysayers will say it's a bit slow going, but the industry is rebuilding the foundations whilst trying to keep many businesses going. Post-lockdown will see an increase in programmatic enabled spend – it's only going one way.
Join us on May 14 for the Future of Media Trading - a free streamed event that will discuss these issues in more detail.