A new study found large gaps in the numbers of respondents who said they use programmatic (67 percent) compared to the number who say they understand how it works.
Just 44 percent of advertising professionals surveyed said they have little or no understanding about how programmatic works: 63 percent of advertisers, 48 percent of agencies and 47 percent of publishers. The study authors note the paradox of high usage and low understanding: 29 percent of the ecosystem is using programmatic while knowing very little about it.
Agencies will need to hone their skills. Nearly two-thirds (63 percent) of respondents named knowledge of programmatic as one of the most important capabilities agencies will need to have by 2020 — rating it higher than having high levels of creativity and strong relationships with advertisers among other options.
Appnexus, WARC DDMAlliance and IAB Europe commissioned the Circle Research survey of more than 1,200 advertising professionals — advertisers, media buying agencies, advertising agencies, agency networks, publishers and ad tech companies — in Europe, North America and Asia Pacific regions. It was released Wednesday.
Lack Of Understanding Leads To Lack Of Trust
This lack of understanding, the study says, leads to a lack of trust. Just 15 percent of respondents associated programmatic with the term “trusted.”
While the lack of understanding is certainly significant, the lack of transparency in the system remains a giant problem, as illustrated by the top two and three answers in the chart below — fear of ads showing up on “undesirable” sites and a lack of transparency of where they end up — both speak to the concerns about fraud. (I’d also argue that if the survey phrasing had been a bit different and included the word “fraud,” we might have seen a different top result in the chart below. The widespread studies and statements released on issues around fraud have clearly contributed to the lack of trust in the system.)
Only 14 percent of advertisers said they are confident in knowing how their digital campaigns perform, and just 8 percent of respondents said their relationship with vendors was transparent. These sentiments don’t just stem from a lack of understanding about how programmatic works but, as the study authors call for, a need for “greater operational disclosure” such as “identifying key stakeholders, who gets paid what, or where ads get shown.” Respondents expressed less trust in those operators between advertisers and publishers, the agency networks and buying agencies.
Audience Targeting Is Driving Programmatic Adoption
The top benefits of programmatic named by respondents were that it is automated and enables real-time bidding and targeting.
Relevance of a publication’s audience topped the list of what makes digital properties more valuable than others to advertisers among both buyers and sellers. (It’s also interesting to note that advertisers value the ability to profile audiences above the ability to personalize advertisements. That will be another area to watch.)
Viewability Embraced By Buyers And Sellers
The study also showed that charging advertisers based on a cost per viewable impression is seen as a positive move by both buy-side respondents (97 percent) and publishers. A full 92 percent of publishers said they believe viewable impression metrics will benefit their business.
Globally, programmatic spending will increase from $29.3 billion in 2015 to $61.9 billion in 2018, according to Magna Global estimates. Already over a third (37 percent) of respondents believe programmatic will be dominant in digital advertising in the years ahead. As the study concludes, addressing issues around understanding and transparency will be crucial in establishing improving trust in the ecosystem.
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