Programmatic media buying simply means purchasing online display advertising via technological means. With just about half of US banner ad purchases being bought this way, the traditional human method of buying advertising direct from publishers is quickly losing its popularity. The convenience and efficiency that programmatic advertising offers made it a $10 billion dollar industry in 2014. That figure is expected to double in 2016, according to eMarketer. But, while this automated means of purchasing and delivering ads continues to explode, viewability of ads purchased in this way is much lower than those bought from publishers directly.
Mentioned in an article posted on thedrum.com, the most recent quarterly Adform RTB (real-time bidding) trend report reveals that only 55 percent of programmatic ads are actually seen by web users. Almost half never get seen! And, there is a 20% decrease in viewability rates from flash rich media ads served through programmatic deals as opposed to ads served directly from publishers. One reason for lower actual views is that publishers withhold their most valuable inventory from automated buying networks in order to save them for direct sales with the hopes of pulling in higher prices. Another reason is that even if banner ads actually run, they are not running on the part of the computer screen that users see and so are completely missed. And the viewability of video ads are doing even worse. According to a study conducted by Vindico, an ad management platform company, 57 percent of two billion video ads surveyed over two months were declared ‘unviewable.’
The next problem facing the programmatic advertising industry is fraud. Impressions are reported as being served but the reality is that they are generated by non-human traffic called botnets or traffic exchanges that steal real impressions or generate fraudulent impressions. Brand safety is another problem. Brands can potentially jeopardize their reputations if their ads run within content that is not relevant or does not support their images. With buying direct, brands have much more control over where their ads end up. And just when you thought things could not get worse, over the past four months a new problem has surfaced for programmatic: malvertising! Basically, hackers are buying ads on the networks and imbedding them with viruses that, unless users have virus protection, will attack their computers once an ad is clicked.
The majority of ads purchased programmatically are desktop banner ads which, depending on where you get your stats from, represent anywhere from 56 to 76 percent. But, programmatic mobile advertising spending rates are expected to overtake desktop as early as the end of the year. Programmatic mobile advertisers face the same viewability, fraud and brand protection issues as their desktop counterparts. And, there is yet another problem unique to mobile programmatic advertising that buyers face – mobile users spend limited time on the mobile web. According to an article published on Luxurydaily.com, “Of the 117 and growing minutes spent per day on mobile devices, 86 percent, or more than an hour and a half, is in applications – not the mobile Web.” The wisdom offered here, therefore, is for brands to shun programmatic completely in favor of in-app advertising. Since all apps have to be launched by a real person and all ads served within the apps are served on the visible screen, the major viewability pitfalls of programmatic advertising are not a concern for in-app mobile advertisers. The issue of fraud is also not a concern. The main reason is because the technology required to ‘kidnap’ real impressions or generate fake ones does not work with in-app advertising, and fraudsters haven’t bothered generating a new technology for hijacking mobile ads because it is not worth it for them. And, it goes without saying that brand protection is of zero concern with brand controlled, exclusive applications.
Viewability and fraud issues are so bad that the IAB has actually created an anti-fraud task force to combat them, along with guidelines and best practices. Right now, however, the reality is that fraudsters are making too much money to stop, and are not scared off since there are limited penalties and a lack of enforcement. Maybe programmatic advertisers need to take a tip from the fraudsters and stop and ask themselves if what they are doing is really worth it.