Marketers Double Programmatic Spend Despite Worries About Transparency and Fraud

Global marketers have doubled their investment in programmatic buying over the last year, even though 85% are concerned about ads being placed against inappropriate content, according to a survey of its members from the World Federation of Advertisers. The survey also found that 76% of respondents think trading desks are less transparent than traditional methods of trading. Matt Green, senior marketing manager at the WFA, said, "There is a growing angst about transparency and the number of people who take a cut in the programmatic process. Advertisers should take back control, and make direct contractual arrangements with all the players in the stack, from finance to data." Mark Butterfield, head of global media at pharmaceuticals company Boehringer Ingelheim, said in a statement, "We have little or no clear understanding of what percentage (of digital spend) is being delivered to the media owner, and what is being taken in fees from either the agency or middle men. There needs to be clarity in the value chain, otherwise clients will continue to question the validity of the digital buy." Around 10% of digital media budgets are now being invested in programmatic channels, but the level of understanding has yet to match the level of investment, according to Mr. Green. The 10% figure is double the scale of investment that respondents said they placed through programmatic buying in a similar WFA member survey last year. The WFA is issuing a guide to programmatic buying today -- put together with the help of a task force including global media directors from Coca-Cola Co., GlaxoSmithKline, Johnson & Johnson, Philips, MasterCard and Deutsche Telekom -- urging marketers to take better ownership of the whole process. "Most agency trading desks use a similar strategy across all clients," Mr. Green said. "A brand trading desk, either in-house or at an agency, would allow for more control and greater differentiation from competitors. It used to be clout that won in media, but that's not necessarily true any more – the new clout is the strength of your algorithms and your capacity to exploit data." The key to making programmatic more effective, he advised, is to own and control your data, to prevent it being used directly by competitors, or by trading desks who can use it to enhance the performance of competitors. The survey -- based on responses from 43 WFA members, whose annual marketing spend totals $35 billion – found that the use of agency trading desks had declined by 15% over the last year, down from 81% to 69%, while use of independent trading desks not owned by media agencies had more than tripled to 30%. Only 5% of respondents said they were completely satisfied with their use of independent trading desks, down from 20% last year. No respondents said they were were completely satisfied with their agency trading desks. Asked if they are concerned about ads being placed next to inappropriate content due to automatic trading, 85% of respondents said yes. Fraud is also a big concern around programmatic buying. Mr. Green estimates that at least 20% -- and sometimes as much as 50% -- of impressions are "void of value." A separate survey earlier this year in the U.S. of 153 marketers by the Association of National Advertisers and Forrester found that most marketers still don't have a clear understanding of how programmatic ad buying works even as it attracts a bigger share of budgets. In that survey, just 23% of respondents said they understood programmatic buying and use it to execute campaigns, Ad Age reported. Another 29% said they've heard the term but don't have a clear understanding of it.

Marketers Double Programmatic Spend Despite Worries About Transparency and Fraud

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