The programmatic dream ain’t what it used to be

If you’ve been to an ad technology conference lately, then you’ve no doubt experienced it: the odd juxtaposition of future-forward cheerleading for innovative technology and grave real-talk about all the threats lurking out there on the exchanges. In one auditorium, sponsors are lining up with a litany of impressive spend projections for 2016, proof-positive that it’s time for your brand to get on the bandwagon. But just down the hall, industry watchdogs are warning that everyone along the digital supply chain is looking to gouge you, including your trusted agency partners.

We’re at this point where the dream is really awesome… And yet there’s this doubt, and there are challenges holding it back.

Anne hunter, comscore

Tech companies still want media buyer clients to get excited about programmatic. But the novelty of using robots to buy ads is wearing off, and marketers are starting to ask hard questions about where their money is going. With so much scrutiny, it’s not so easy to brush fraud and transparency problems under the rug.

Take the opening keynote at the recent IAB X-Series: Programmatic conference in Toronto. It started off where you’d expect, focusing on cross-device media consumption and the need for a mobile search strategy. But then it took a darker turn — when Vegard Johnson, former chief customer officer of Spider.io (the guys who outed the biggest ad fraud botnet to date) got on stage to tell us about how easy it is for fraudsters to infect our computers.

In a video demo, he broke down how hackers — once they’ve infected a computer through an innocuous free wifi network — can run 23 full-screen browser windows on ad-filled ghost sites, without any sign of the activity even on Windows Task Manager. He showed how they mimic human mouse movements to fool cybersecurity snoops, and how they visit legitimate publishers’ sites just to seem less obvious to network trackers. He estimated a typical botnet can make about $300,000 a day off of advertisers.

Somewhere near 10% of all corporate and residential computers are infected with moderate-to-high risk malware, he said. “You may think, ‘Who are these people who get infected?’ It may well be you,” he warned. “It’s somewhat easier than you may think.”

Johnsen had the audience glued to his powerpoint slides. But after he finished, and the anxious murmurs died down, Google group project manager Drew Bradstock had to try and bring the talk back to the reasons advertisers should be buying on open programmatic exchanges.

“I don’t want to end on a downer,” he said. “We’ve really reached an inflection point … We can buy brand-safe premium inventory, at scale, and most importantly, measure it effectively.”

The moment seemed to symbolize the general mood around programmatic. The promises of efficiency and one-to-one advertising are still there, but they have to compete for attention with much louder headlines about fraud, poor viewability, banner blindness and bad actors. Some have taken to calling it programmatic’s “teen angst” phase.

That angst has had a visible effect on the industry, especially in ever-cautious Canada. Buyers are retreating to private marketplaces, sacrificing much of the scale and targeting that programmatic promised, in favour of closed-room deals with known and trusted publishers that aren’t terribly different from what’s always been done in media. Ad tech companies and trading desks are feeling the pressure to prove their value, or watch budget migrate to other, safer channels — even back to TV.

But for all the hard questions, estimates of how much media will be bought programmatically in the next five years just keep getting more ambitious. In October, Magna Global estimated that programmatic spend will make up 48% of all global display spending by the end of 2015. According to IDC’s most recent Canadian forecast (which admittedly hasn’t been updated since 2013), Canadian advertisers will more than double their programmatic spend in the next two years, from $82 million in 2015 to $178 million in 2017. Full automation of digital media buying seems inevitable — which may be why it’s facing such scrutiny.

At X-Series, Bradstock and Johnsen were followed by Anne Hunter, ComScore’s senior vice-president of global product marketing. In an eerie coincidence, her talk centred on the looming discrepancy between the promise of programmatic and buyers’ doubts — the same conflict that the two Google speakers illustrated so clearly.

Point by point, Hunter outlined the programmatic “dream” — an everybody-wins scenario with bigger yields for publishers and better returns for buyers — alongside the “reality” of questionable quality, opaque supply chain relationships, wasted spend and distrust.

“We’re at this point where the dream is really awesome. This is what the internet can do! And yet there’s this doubt, and there are challenges holding it back from making the dream a reality,” she said. “Open any trade magazine, go online and see any trade article, and the headlines are about the doubt.”

One of the tough questions being asked is whether there really is quality in programmatic. The data says yes: according to ComScore’s verification study, 91 of the top 100 ranked sites have less than 5% non-human traffic. On average, the top 100 are 1.5 times more viewable than the web-wide average of around 50%.

But that’s not the whole story. According to the same data, 51 of the top 100 sites have areas with medium or high non-human traffic volume, and all 100 have at least one area with poor viewability. So digital advertising does deliver on the quality promised, but not consistently.

The Good News

Hunter’s good news was that smart, proactive buyers can overcome the problem. She pointed to advertiser verticals that have seen a drastic increase in viewability rates thanks to judicious use of optimization and targeting based on ad quality. Canada’s CPG advertisers, which have “made a commitment to quality,” have increased viewable impressions by 54% over the industry average, while finance typically sees 49% more than the average.

Those who want to promote programmatic need to change the conversation, she said. It’s not about whether programmatic is good or bad, promising or flawed — it’s about using the tools available to hunt for quality. Finding quality in digital media is an active task. It’s not something that magically happens just by adopting a new platform.

“We can focus on those challenges, and we can focus on that doubt, or we can flip the conversation,” she said. “We need to get back to that dream. We need to make the conversation about quality. How can quality stand out in programmatic, and what we can do so that programmatic is a place that you go to find quality, that we can make quality surface above the noise.”

Although the threats that face programmatic buyers aren’t going away, the tools for finding quality are getting sharper and more refined. After all, Johnsen’s firm, Spider.io, was bought by Google specifically to find — and steer a wide birth around — the kind of fraud he described. (As was Mdotlabs, a similar cybersecurity shop that ComScore acquired last year.) ComScore took the occasion of the conference to mark the official Canadian rollout of its industry trust profiles, which make historical data on site and seller quality available for pre-bid programmatic targeting.

To Google’s credit, Bradstock was able to restore much of the audience’s confidence in the closing minutes of his talk, with a reminder that white hat tech vendors have as much to gain from seeking out quality as advertisers do.

“All of us have to make sure the partners we’re working with are fighting this fight, and making sure that the premium and programmatic inventory is kept clean,” he said.

It’s critical, he said, that buyers and sellers don’t just hide behind whitelists in private marketplaces, and they have faith that problems programmatic continues to face, fraud and poor transparency and ineffectiveness, are just growing pains. “We’re not giving in,” he said. “We’re not going to let these guys win.”