The Drum has teamed with the Trade Desk for a series of short video primers and accompanying features in print to tell agencies and brands everything they need to know about complex issues. First up is programmatic trading. IAB figures released this summer show that programmatic accounted for almost GBP1bn (GBP960m) of UK spend in 2014 -- 45% of the online and mobile display total. IAB (US) figures put 2014 spend at $10.1bn - 52% of display and 20% of total Internet advertising revenue.
Believe it or not, one hundred variations of the same ad are not enough for some digital marketers. That's one of the reasons the stars appear to be aligning for tech vendors that have been developing systems for what they call creative programmatic advertising. Creative and programmatic once seemed incompatible, but here's what is helping to bring the two together. The long-called-for movement for makers of display ads to evolve from using Flash software to HTML5 is finally upon us.
Research conducted earlier this year by WBR revealed that 92% of marketers within the U.S. retail sector are using programmatic for branding objectives - making it the number one reason for adopting the technology within this group. However, one of the barriers to the movement of branding budgets to programmatic has traditionally been a lack of understanding over how and why programmatic works to raise brand awareness.
Fraudulent traffic is a problem that continues to plague digital advertising, particularly with ads purchased from automated ad exchanges. To evaluate the quality of traffic to its members' properties, online publishing trade group Digital Content Next commissioned ad fraud detection firm White Ops to study 32 of its members' sites for 53 days. According to DCN's study, "sophisticated bots" accounted for an average of 2.8% of traffic to display ads across its members' properties, and 2.5% of traffic to video ads.
When I have examined some of the pushback I've had about my comments on programmatic, or more precisely automation, two things surface. Media owners are embracing it partly because everybody else is, and partly because it promises to enable them to sell their long tail of inventory. Agencies likewise, but with the motivation that it already delivers massive margin hikes and will bring further efficiency. Interestingly, neither of these are in any way connected to what their advertiser customers say they want.
US programmatic digital display ad spending will reach $15.43 billion this year, up 49.5% over 2014 spending levels, eMarketer estimates. In our latest forecast for programmatic ad spending in the US, we expect programmatic direct buys to account for a majority of all spending this year. Programmatic has come to account or a majority of digital display ad spending in the US this year. In just two years, eMarketer estimates that nearly three in four display ad dollars in the country will be spent programmatically.
Research by GlobalWebIndex shows that people using ad blockers are likely to spend a lot of time on the Internet, and therefore to be more inconvenienced by intrusive or poorly targeted ads and have greater awareness of how they can put a stop to this. However, research also shows they are more likely than others to be happy to pay for digital content if it's something they're interested -- or in other words, if it's relevant to them.
The topic of advertising fraud in the programmatic sector is a jugular issue concerning marketers today. The openness that allows advertisers and publishers of any size to participate in the programmatic ecosystem also lets bad actors participate and pollute the quality of the sector. Fraud is the first thing that a marketer must address when looking at the overall quality of their ad campaigns. It is the fundamental first step before trying to optimize for viewability or brand safety.
According to eMarketer, nearly 70% of UK and US marketers have moved TV ad budgets to programmatic video. However, there is a hurdle in measuring success. The real problem is that more often than not, the success of a programmatic video ad is measured by completion rates alone. This is the sign of changing times. Between the issues of viewability and the advances in marketing attribution, the days of measuring a programmatic campaign's success based on simple metrics alone are quickly coming to a close.
Last March, C4 struck a partnership with FreeWheel to create a marketplace in which advertisers would buy ads on its All4 catch-up service using programmatic automated technology. But digital partnerships and innovation head Jonathan Lewis is thinking beyond that. "We're trying to bring to our programmatic offering in the future addressability on connected devices like mobile and tablet applications which we currently offer," he tells Beet.TV in this video interview.