Commentary

Automated Media Buying Isn't Going Anywhere Despite Potential For Fraud

eMarketer's forecast earlier this week that nearly four of every five U.S. display ad dollars will transact through programmatic pipes this year, and spending on programmatic display advertising will reach nearly $33 billion, is pretty bullish. Is it too bullish, given that automated media buying is, at least in part, to blame for advertiser concerns about brand safety, the messy supply chain, and transparency?

Lauren Fisher, principal analyst at eMarketer and author of the recent report that made the projections, maintains that programmatic isn’t going away and that the backlash may be unfair. “Programmatic is a broad category—it can be open marketplaces, private marketplaces, etc. The problems are concentrated in the open marketplaces, where advertisers and publishers have less control,” Fisher said. “Any time the buyer and seller aren’t directly connected, there’s an opportunity for problems,” she said.

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She observed that whenever there are intermediaries, there will be opportunities for fraud and the potential for bad actors.

Private setups aren’t perfect either, but there’s at least there’s a person to call when things go awry or there are questions. Of course direct and private marketplace deals are popular for advertisers that want more control.

As part of the same forecast, eMarketer estimated that 74.5% ($24.25 billion) of the total $32.56 billion in U.S. programmatic digital display ad spending will go to private marketplaces (PMPs) and programmatic direct setups in 2017. Fisher said direct deals comprise the majority of this mother lode, due to the amount of API-based buying on social media platforms like Facebook and Twitter. That 74.5% will increase to 79.1% by 2019, eMarketer estimated, largely driven by investments in PMPs vs. the open exchanges.

Of course advertisers that go direct to publishers can expect to pay a higher CPM, and it’s not necessarily for equivalent inventory. The bottom line is that advertisers are buying audiences—and they will pay to get the right audiences. Programmatic direct deals can involve a guarantee on price and sometimes on the amount of inventory the buyer and seller agree to.

Fisher noted that the vast majority of social media is being bought programmatically, and that trend will continue despite the hiccups in technology and concerns over brand safety, etc. “At the end of the day, advertisers are really embracing this idea of buying audiences and doing things like cross-device targeting. Ultimately, the only way they’re going to be able to do that is by using programmatic,” she said.

Advertiser demand for greater control is about more than brand safety, ad quality, or price. For both advertisers and publishers, it’s also about audience data—controlling its use, and who has access to it. “Owning one’s data is extremely important,” Fisher noted.

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