• by Tobi Elkin , Staff Writer @tobielkin, September 13, 2016

OpenX and ExchangeWire teamed up on a report that examines industry perceptions of programmatic advertising quality. This is the second year for the report, and RTBlog believed the findings were interesting enough to flag.

The two companies surveyed digital marketing professionals around the world to obtain a deeper understanding of the shift in media buyers’ and publishers’ perceptions of the online advertising marketplace. “We hope to continue to raise awareness of the issues that impact marketplace quality with this report — especially within the mobile environment — and inspire the industry to work toward solutions that will allow all participants to realize the full potential of programmatic,” stated John Murphy, vice president of marketplace quality at OpenX.

Ad quality and ad fraud are, of course, major issues facing the programmatic ecosystem. All stakeholders are affected. Rebecca Muir, ExchangeWire’s head of research and analysis, maintained that the biggest challenge regarding ad quality may be for verification companies and media sellers that will need to step up monitoring the actions of so-called “bad actors."

Among the study’s top-line findings:

-- Overall, confidence in programmatic advertising is declining despite a decrease in the perception of risk. Still, marketplace quality issues aren’t causing a drop in investment in programmatic.
-- Levels of perceived fraud and viewability remain well above the levels marketers say they will tolerate.
-- There’s a perception that desktop has become less affected by marketplace quality, and that mobile is now more problematic.
-- Media owners are feeling more pressure than media buyers.
-- Respondents in the APAC region are the most concerned about marketplace inventory quality, while those in the U.S. are the least concerned.
-- Marketers' confidence in private marketplaces (PMPs) that supposedly reduce the amount of low quality inventory they’re exposed to has dropped in the last 12 months.

For example, in 2015, the study found that marketers were hopeful that PMPs would offer a solution for the lack of “quality” inventory available through open exchanges. But the most current findings reveal the opposite: Confidence in PMPs has declined year-over-year.

Digging further into the findings, the study found industry confidence that programmatic advertising delivers decent value for the money has fallen from 95% to 86% globally, despite the fact that advertisers are spending more than ever on programmatic. That’s a troubling data point.

However, the study’s authors noted that marketers perceive a decrease in the risks associated with programmatic trading, so there may be other factors driving that decrease in confidence.

Marketers' perception of the actual level of viewability hasn’t changed drastically between 2015 and 2016, dropping by two percentage points, from 45% to 43%. That figure is, however, much lower than marketers indicate they will tolerate—only 18% say this is an acceptable level. Further, perception of today's marketplace remains behind desired levels.

Where ad quality is concerned, respondents in APAC are most concerned, with 100% of respondents saying marketplace quality is either a “very serious” or “serious” issue. In the U.S., only three in every ten say that marketplace quality is a “very serious” issue, the lowest figure globally. However, 58% report it to be a “serious” issue, bringing the total figure to 87%, which is more line with the other regions. Within EMEA, 91% of respondents said it’s a “serious” issue. The research finds this trend is indicative of the relative maturity of each region.

Globally, the findings reveal that marketers are demanding higher levels of viewability compared to 12 months ago. Almost one-third (30%) consider 80% viewability levels and above to be acceptable, up from one-fifth (21%) last year. Marketers' perception of the actual level of viewability hasn’t changed drastically between 2015 and 2016, dropping by two percentage points from 45% to 43%. That figure, is however, much lower than marketers indicate they will tolerate (only 18% say this is an acceptable level).

Marketers’ tolerance of fraud is consistent year-over-year with the majority (over 70%) saying they’ll tolerate fraud as long as it doesn’t rise above 5%. Globally, respondents believe the current level of fraud is 27%, much higher than the 5% marketers are willing to tolerate. This remains unchanged from 2015.

Interestingly, there is a difference of 12 percentage points between the media seller and media buyer groups. More than one-third (38%) of the media seller group say they don’t consider any level of fraud to be acceptable. By comparison, only one-quarter (24%) of the media buying group share this belief.

And there’s another difference between media sellers and buyers, with a quarter of media sellers (25%) reporting they would tolerate up to 5% fraudulent impressions. In the media buyer group, almost twice as many respondents (49%) are willing to tolerate 5% fraud. This suggests an increased tolerance on the part of the media buyers and a heightened concern on the part of media sellers.

Confidence in the ability of PMPs to deliver high-quality inventory has suffered over the last 12 months. This year, the study found a 61% increase year-over-year in the number of respondents who say “PMPs do not ensure a high quality marketplace, poor quality traffic always finds a way through.” Further, only 9% of marketers believe “PMPs are essential and the only way to ensure you are buying from a high quality marketplace." That’s half the figure reported in 2015 (18%).

The study is based on a survey of 107 digital marketing professionals from around the world. Information about the survey was emailed to ExchangeWire's subscriber base of digital technology and marketing professionals, and promoted via the ExchangeWire website, Twitter, and LinkedIn during July 2016. OpenX promoted the survey to its clients around the world via its online platform's user interface. ExchangeWire Research also interviewed senior marketing and technology professionals to get their unique insights and in-market perspectives on the findings.