Commentary

Programmatic Is Problematic, Even When It Works

The problems with programmatic are well-covered and greatly ignored.  Reported growth in spending continues to fan the frenzy, while sweeping significant problems under the rug.

The biggest problem with programmatic, of course, has to be the non-human traffic.  

Bots surf the Web the way a human would, so cookies get dropped and that browser seems like a legitimate target audience.  The bot then travels to a bullshit site with bullshit content, and programmatic triggers the serving of ads. So advertisers pay real money to fake sites for ads seen by no one.   

Talk to the brilliant Professor David Carroll (@profcarroll), who can break down this problem better than anyone while painting an even darker picture of where these ad dollars end up.

Today however, let’s stick our head deeper in the sand and ignore this non-human traffic thing for a minute.

Programmatic still doesn’t work.

Over 70% of  overall spending in programmatic is for open exchange inventory, with millions of sites competing to earn those ad dollars.  Sites that rely heavily, or exclusively, on this kind of ad revenue are rewarded for creating a disastrous user experience.  That’s because publishers cashing programmatic ad sales checks are incented to jam in as many ad impressions per page view as they can.

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SFgate.com is an example of one of those sites.  It should have its publishing license revoked.   The fact that this site resides in the Bay Area -- where digital advertising all started -- is a sad and ironic joke.

On any given day, SFgate.com, which I find when Yahoo publishes leads to its stories, will run up to 12 different display ads on its home page. All appear to be sold programmatically.   That’s not counting the native content swimming in this cesspool of a site, either.  

But, OK, let’s stick our head a little further in the sand and pretend 12 ad units per page view is not a big deal.  Programmatic still has fundamental problems.

Close to 90% of ad impressions bought through programmatic open exchanges are based on retargeting.  Visit an advertiser’s site, get a cookie taped to your browser like toilet paper stuck to your shoe -- and now, wherever you go on the Web, publishers over-serve you that advertiser’s ad.

I have two cats, 16-year-old brother and sister named Momo and Maxine.  The latter is starting to miss the box, so I went to Petsmart.com a while ago to see what solutions exist.   

As a pet owner, I tend to read stories on Yahoo about pets.  Last week, I read a headline about a dog that was killed by a pet groomer working at Petsmart.  I clicked through to read the whole story, and was met with this:


Before you argue, “this is a one-off impression,” please consider this: Millions of “pet enthusiasts” like me were served a snippet of this story on Yahoo.  Many felt their heartstrings pulled and clicked through to SF Gate to read the story.  A large percentage of “pet enthusiasts” have cookies from a pet site, so it’s likely that many people were served the worst ad placement in the history of advertising.

It gets worse.  I searched for this story a week after I first encountered this ad placement, and Petsmart ads are still serving to my browser.  No one has a clue on where the majority of programmatic ads sold are served, so no one at Petsmart even knows they need to stop this.

The programmatic world is so good at touting their success  -- but they never report on the 99% of the people who did not click, who did not convert, who did not generate attribution credit.

I would love to know, of the 99% of the people who saw this ad and did not engage, how many now have a negative opinion of this programmatic advertiser?  What percentage was so offended by the insensitivity of this ad placement that they won’t ever shop at Petsmart?  What percentage now thinks Petsmart is Petdumb?

Programmatic doesn’t work. Ads are served when a cookie in a browser says it’s the right person -- while so often, the content where the ad is seen is saying it’s the wrong time.

7 comments about "Programmatic Is Problematic, Even When It Works".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, December 1, 2016 at 4:02 p.m.

    There is a problem that happens before the problems that are stated above.  This is, which is more important in advertising, the human or computer programs? And, who do you trust more, a human or a computer program?  While this sound so simple of a question, it might insult some but here is why I post the question.

    The basic idea behind programmatic is to produce ads at a lower cost because there is only a one time interaction between the legit publisher and the banner company. After this it likely that that banner will not be changed for a long time. So humans are taken out of the picture for the most part even down to the check sent to the publisher.

    However the far superior way of ad delivery is still with humans.  We publish hundreds of ads during the year by the Fortune companies directly by way of text link. Yes, this is manual input the ads. This is superior because my clients know exactly what they are getting, can see the ad's performance and the ad cannot and never has been blocked. 

    We offer a Rolls Royce ad delivery service compared to programmatic which now looks like Yugos.

     

  2. Craig Mcdaniel from Sweepstakes Today LLC, December 1, 2016 at 4:10 p.m.

    In reading the article again, there is anothe way to fix programmatic.  This would be to match up the programmatic delivery company, by way of IP addresses and with the publisher's IP address. This would create a level of security which is what is missing in the whole process.  It's fine to state all the problems. That's easy. Offering creative solutions is what is needed.

  3. Lubin Bisson from Qzedia Media Inc, December 3, 2016 at 9:18 a.m.

    Programmatic as is is but a phase, Ari.  Expect the friction to increase and to bring key drivers of behavior to the fore as deterministic algorithms (based on preset procedures) will be enhanced (not replaced, enhanced) by non deterministic ones in the future.

    Algorithms are not illogical. Electronic processes are just that, processes. They do not manipulate data as humans do.
     
    So the ultimate answer to this issue, is that manipulative processes are needed.
     
    Thankfully for those that fear DAs, those manipulative processes are already here and already operating ... just in stealth mode, for now.

  4. Ari Rosenberg from Performance Pricing Holdings, LLC, December 4, 2016 at 1:14 p.m.

    @Lubin, my brain doesn't think about the problem the way yours does which is why I enjoy your comments so much. 

    To clarify, I think about this problem is a very simple way.

    How many print magazines does an advertiser have to choose from to run an ad?  10,000?  20,000?  I have no idea but let's take the high end and say there are 50,000 magazines in total an advertiser can possible run an ad.

    How many radio stations or TV stations are there?  Let's say 50,000 of each just for argument sake ok.

    With Internet advertising, there are literally millions of web sites that carry advertising.  That's because programmatic triggers the serving of paid ads onto all these sites.

    My contention is that just because you produce a web site should NOT mean you have earned the right to display advertising.  Programmatic eliminates the standards and thresholds other media have placed on publishers to be deemed worthy of running ads. 

    So we have millions of inferior quality web sites running ads and programmatic makes that happen.

    My argument is much simpler than you think my friend.

  5. Ed Papazian from Media Dynamics Inc, December 4, 2016 at 6:32 p.m.

    Ari, a typical advertiser, via the agency, considers  five broadcast networks, about 20 cable sellers---many channels are owned by comglomerates like NBC or ABC and are sold centrally---- plus a dozen or so syndicators for national TV. In the case of magazines, it is rare that more than two dozen are considered---if a magazine buy is in the cards. For radio---again, if it makes the cut---you have a dozen  natworks  and spot---which is bought through one conglomerate rep and sub reps ( Katz ) . For spot TV, again, you are dealing with national reps, for the most part, not individual stations, though there are exceptions to the rule. So, to make your point even more strongly, "legacy media" is not a dazzeling host of might be players for most advertisers, it's really quite an easily managed number of entities---all playing by accepted rules, using long standing metrics, with no issues about whether the ads can be seen/heard or whether they go to real people or bots/fraudsters. Which means that programmatic, as currently configured, must somehow come up with fantastic targeting efficiency gains from within a limited number of media---all of which are totally familiar to the agency---in order to justify the very sizeable fees that programmatic and attendent platforms hope to charge. There is no way that programmatic can deliver on its targeting efficiency promises under such circumstances---though it may have merit as a work saver for certain types of buys--spot TV and radio, as examples----and possibly, as a way to allocate corporate media buys to individual brands for advertisers who haven't figured out how to do that.

  6. Craig Mcdaniel from Sweepstakes Today LLC, December 4, 2016 at 7:18 p.m.

    For those of you who are not in publishing like me, many of you are deaf about the problems the publisher's have.  First publisher's don't make enough to cover all of their overhead.  To run a quality website, it cost a fair amount of money. I had a conversation with my OpenX rep this last week about Header Bidder ads. They pay more but the maximum number of banner they allow is 4. Google AdSense has a maximum number of banners they allow on the front page is 2 or 3 depending on who you talk to. 

    Worse, Google has become a very big competitor to many publishers by siphoning off the best ads in Google Search, Google+, YouTube and whereever else they can place a ad and not pay for the location. If you type in the keyword in Google Search - "Sweepstakes", half the results are paid search advertising and these ads don't appear on many websites. To me and sure many of you, this is a major conflict of interest. Do you care? If you don't you should.

    There is a major bottleneck developing between publishers, advertisers and the ad distribution industry. Each wants to make the most money but not wanting to listen to the other parties.

    The point is, the publishers are saying we are going to do what we need to do to stay in business since they are the point point of contact in the chain with the end user.  This includes Yahoo who is offering a very creative ad for Pets.com.

  7. Lubin Bisson from Qzedia Media Inc replied, December 7, 2016 at 12:18 p.m.

    As the saying goes, Ari, complexities are in the eye of the beholder.

    My argument is much simpler than you think my friend (and you know I love our ongoing conversation).

    Simply put, the old gated geographic monopolies in media paid the bills, but that model hasn’t yet died and the new one doesn’t fully exist.

    Staggering to think the biggest paradigm shift in history is still to come.

    You and I are living proof of that.

    Our careers are in media advertising.

    No matter how many magazines, newspapers, alternative weeklies, radio or television stations were involved in our endeavours, it all came down to delivering audiences to advertisers.

    That's it.

    Did we ever really need to explain that programmatic triggers the serving of paid ads onto literally millions of web sites that carry advertising?

    Not if the audience is legitimate.

    Just like we never explained the chemistry of ink or the dynamics of radio waves.

    We have lived through the best (and worst) of legacy media.

    The audience that left legacy media to face plummeting ad revenues still exists.

    And now they are found through cloud-based artificial intelligence services.

    On the computer they have in their pocket.

    Programmatic is just the first iteration to reward the teenage girl publisher from Minnesota and her horse-grooming site or the ex-aeronautical engineer from Sweden and his site about aviation data and history.

    Nobody had to give them permission to publish.

    I know. I signed off on the reports that justified sending them cheques each month.

    Programmatic delivered those audiences to advertisers.

    Programmatic deemed those audiences worthy of seeing ads.

    Programmatic rewarded those publishers higher pay-outs on the measured audience from those sites.

    As simple as that. (Or as complex, depending on your point of view).

    You describe the spasms of pain associated with the transformation that comes when instead of people writing software, we have data writing software.

    This is a big deal.

    And it is happening really fast.

    Too fast for some people.

    Yet, what's wrong with programmatic is not that it is still working on correcting for non-human traffic.

    What's wrong with programmatic is that it is still so misunderstood that it still has some columnists citing Yahoo or the SF Gate as something other than a "legacy media" in their own right!

    Talk about continuing to fan the frenzy, while sweeping significant problems under the rug.

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