The Hits and Misses of Programmatic Ad Buying

Posted on by Brionna Lewis, Digital Marketing Associate

Everyone in the mobile advertising industry is going crazy over programmatic buying. While it brings tremendous opportunity and efficiency to ad buying, it also has significant limitations that aren’t often discussed. We decided to break down some of the pros and cons, the hits and misses of programmatic ad buying.


The Hits:

Programmatic is wide-reaching.
Brands can reach their key demographics across multiple and diverse publishers. Programmatic platforms are connected to other platforms, which are themselves connected to other platforms.  This endless spider web of connections makes it easier than ever before for brands to reach users across countless publishers, as the brand really only needs to have a single touch point on the web (i.e. no direct connection is needed). This means that their marketing message can travel around the world with the click of a button.

It frees up the time of marketing personnel.
Programmatic buying eliminates the time-consuming process of identifying and buying ad space from marketing teams. This frees up time and human resources so that brands can focus on more creative marketing efforts.

It’s cost-efficient.
This is probably the biggest benefit of all. Programmatic buying programs automatically find the least expensive ad space for the buyer’s targeted audience. This saves buyers the trouble of negotiating for the lowest price and can cut costs tremendously.


The Misses:

Programmatic buying usually produces pretty low engagement rates.
Standard display advertising ads bought programmatically have very low CTR’s, about 0.18% for standard media, according to Google ’s analysis. In other words, you get what you pay for. If you want cheap ads, you can expect very little in terms of effectiveness.

It uses the same media over and over, regardless of context.
Programmatic buying is geared toward high volume, “awareness” campaigns, that are proven to be less effective than strategic relevant placements. Kiip was designed to replace this style of ads with contextually relevant rewards that see an average of 12% engagement rate and an increase in mobile awareness that’s 9 times the norm, according to Nielsen’s study.Bots

Programmatic buying comes with an exceptional risk of fraud.
The ease of programmatic buying means that, essentially, anyone can buy and anyone can sell. This leaves an open playing field for bad actors. The most common examples of ad fraud are: Bot traffic (i.e. non-human automated plays, clicks, etc.) and non-viewable ads (ex. An interstitial or video is buried in a feed somewhere and the user never actually even sees it). In 2014, bot traffic accounted for 56% of all websit traffic and cost the industry about $6.3 billion. One of the biggest reasons ad fraud is rampant is because it’s not exactly illegal, which means low-risk and high-potential for scammers

Ads bought programmatically can end up in the wrong place.
Any marketer will tell you that your brand ending up in the wrong place can go bad quickly. A good example of this is the all-too-common practice of re-brokering.  For instance, a publisher or ad network could give a programmatic tag to an affiliate of some kind, meaning that advertisers might be tricked into thinking they’re serving content on one publisher, but really it’s being shown on a different one entirely. Having your brand appear on the wrong website or in the wrong app can be extremely harmful to your brand. That’s one of the significant risks of buying through a programmatic platform.

What do you think? Is programmatic buying the future? Has the industry chosen quantity over quality? 

Tagged ad buying, ad:tech, Advertising, advertising, Marketing, programmatic

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