Programmatic Pitfalls

In this edition of Jim’s Digital Lab, I want to address an emerging digital adverting issue that is a “throw back” to my earliest days in media. You know, back before there WAS an Internet! There are many moving parts in this complex advertising ritual, with thousands of advertisers, digital media platforms of all sorts, and sales intermediaries coming together to create a computer-driven “marketplace” to sell and buy online advertising. It’s called programmatic advertising.

Programmatic advertising is here to stay. This automated bid-buy-place-report ecosystem of advertising has demonstrated its ability to be a quick way to pulse digital ads efficiently and to do so across multiple media platforms from the comfort of the advertiser’s or agency’s office.

Unfortunately, we’re also aware of the #1 problem confronting the system: click-fraud in programmatic advertising. Google has done a pretty good job of cleaning up the issue on its Google Adwords (PPC) platform. But, across many programmatic platforms that dilemma has yet to be completely solved by the ethical participants who want to keep out the bad actors. Google and other companies that are cogs in the programmatic advertising process are working feverishly on the problem.

Problem #2 is placement. I originally began my Mad Men-era media career placing print ads at J. Walter Thompson and Cunningham & Walsh in New York. Then, I went to work on the publishing side in consumer and business magazines and sold a lot of advertising to agencies and clients. The old adage I both dished out as a buyer, and received as a seller was ”right-hand, far-forward, opposite full edit.” This famous refrain was written into almost every ad contract. We even started seeing demands to be “10 pages away from a competitor” and “not near tobacco and liquor advertising.” Even though advertisers themselves probably both smoked and drank, they didn’t want their ads to be anywhere near these black-listed advertisements since it might harm the brand!

Programmatic advertising now has a similar issue in that these ads are generally placed by automated computer programs that do not monitor or even grasp the issue of inappropriate video content. Misleading video titles and false meta-tagging fake out the crawlers that help rank sites for programmatic ad fulfillment. As a result, some advertisers wind up with pre-roll ads injected into hate-filled videos, sexually-skewed videos or within other inappropriate video programming. Advertisers are beginning to push back by demanding more control over placement. If not satisfied, they are requiring make-goods or outright cancellations. If the problem isn’t resolved, well then digital advertising through programmatic means will hit a very large speed bump.

Just this week Havas Worldwide, one of the largest advertising agencies in the world, announced that it has pulled all client ads from Google’s YouTube and other Google advertising platforms in the UK because of Google’s inability to guarantee ads won’t be placed in or near objectionable content. One estimate is that almost $200 million in ad contracts have been cancelled or put on hold while the programmatic sellers figure out the technical issue. We’ll see many other ad agencies follow suit as they negotiate better placement terms for PPC, pre-roll video ads and Facebook boosted posts as well.

The nature of “free speech” on user-curated content sites such as YouTube will narrow the available inventory for programmatic advertising since a lot of content will have to be filtered and walled off from the advertising placement engines. Lower inventory means…you guessed it…higher cost-per-click rates. Google, Facebook and other programmatic services will have to use some very sophisticated technology to make sure that ads are placed in or near relevant and/or less offensive content within their respective platforms. I’m confident that smart minds and even smarter technology will eventually assuage the fears of advertisers so that programmatic will become a dominant force in digital advertising.

We’ve created a link if you would like to read the Havas story. In the U.S., both AT&T and Verizon have halted their extensive non-Search advertising on Google for the same reason. And, Matt Brittin, Google’s head of EMEA, recently announced the company is working very hard to resolve these issues.

Whether you agree or disagree, please let me hear from you at [email protected].