Written November 6, 2015
Programmatic buying has successfully made its way into the world of digital advertising over the past few years. But the potential for further development is still huge and it is clear that the industry still faces a few challenges:
The supply side needs to tackle the problem of online-fraud more actively
Online advertising enables us to access many websites free of charge. Fraudsters have been around on the Internet since its inception. Online advertising’s success has attracted criminal elements. Problems associated with both traffic or online fraud have therefore not emerged because of programmatic buying. This is a problem inherent to the medium and has been around for a long time. Rocket Fuel, its competitors, the big marketers and all serious operators in the market are endeavouring to do their best to limit online fraud. Nevertheless, the problem will always exist to a certain degree. Fraud happens everywhere – in banking, for example, as well as in other sectors.
Prices reached in auctions are not important, it’s all about ROI.
The price issue comes up again and again. How would price transparency be of benefit? Many providers explain exactly which impression was bought for how many Euros. Which benefit does the customer derive from knowing that he pays between 9 cents and 90 Euros at bild.de? Every DSP’s, demand side platform, trade secret is to know why intelligent technology has in one case decided that 90 Euro was offered for the impression, and 90 cents in another case. It is difficult for the customer to fully comprehend this. With respect to transparency, it is much more important to understand which environments, times of day, advertising factors or messages on the advertising materials work well. Orienting future campaigns on prices would be a mistake in 99 per cent of cases. Programmatic media buying is aimed at individual users and not at specific environments. It is more important for advertisers to have the media budget used in an efficient way, and to know what kind of ROI will result at the end of the campaign.
Well-targeted branding campaigns do work.
Data-driven brand communication is possible, and in the process, there are many different solutions and concepts. Rocket Fuel is taking the “Survey Based Optimisation” approach: Market research is conducted and an advertising campaign is carried out at the same time. The campaign will then be adapted in real time to the results collected during market research. This means that when we have created a sufficiently high number of surveys, we can generate learnings from this very quickly and optimise the campaign – with respect to messaging, advertising materials and even the advert. Target groups can also be excluded in this way. Another approach is guaranteeing to the customer that the advertising is supplied only to the target group specified by him. Independent market research companies such as Nielsen or comScore then confirm that the target group was reached. The customer learns more about his defined target group through data-driven branding campaigns. This is a big advantage compared to all other types of media.
Media agencies should redefine their role within the ecosystem.
A media agency should not simultaneously be a media buyer, since the agency’s objectivity will consequently diminish, and also the proposed media plan’s credibility. Frequently, those differing interests clash. A neutral position is much more useful for an agency. Data-driven media buying does not replace the agency’s role as strategic consultant. Agencies should obtain information, recognise trends and advise customers on their requirements as best as they can. If an agency also acts as a buyer, it has to gear towards best conditions and the best product, which is sometimes difficult, given the variety of offers in the market.
This post was published by Magnus Johansson, Country Manager Nordic Rocket Fuel, a leader in programmatic buying from California.