Changing the Channel: Why Programmatic Isn't Ready to Deliver What Brand Marketers Want
When Ad Age recently reported that Procter & Gamble plans to buy 70-75% of its U.S. digital media using programmatic ad tech by the end of this year, I couldn't help but wonder: Is this a good way for the largest advertiser in the U.S. to spend a nearly $2 billion budget?
But the news just reflects what most industry insiders already know -- that the digital advertising industry is headed towards a programmatic world. And I can't completely knock it, because I understand that there is a place and value for programmatic ad buys. Automated auctions and other elements can improve efficiency for advertisers, deliver big reach, achieve direct response marketing objectives and offer a rock-bottom ad rate.
It makes perfect sense for performance-based categories such as online retail to shift the majority of their digital ad budgets to programmatic, because such companies are predominately direct-response advertisers focused on customer acquisition. This means they've hit their sweet spot when they can pay inexpensive prices and optimize with algorithms to win customers at a high volume. It's merely a numbers game.
But Procter & Gamble, a company known for its iconic brands and an ongoing need to keep those brands in a positive light, is an entirely different animal.
When an executive said Procter & Gamble's move to programmatic ad buying would "give them greater control," I have a hard time believing whole-heartedly in this as a branding strategy. That's because marketers that care about how users perceive their brands can't expect to achieve a positive response through today's programmatic methods.
Behind all the recent hype, I think that many digital marketers feel similar to how I do. A recent Millward Brown Digital survey that we commissioned polled 300 digital marketers and decision makers to get their thoughts on programmatic as a branding vehicle. The survey findings have confirmed my suspicions, revealing that a large percent of respondents state that banner blindness, quality of inventory, viewability, click fraud, ad collision and fraudulent traffic are all serious concerns when buying branding ads through programmatic methods.
The survey findings indicate that digital marketers think that the digital ad industry as a whole falls short, too. Half of the respondents said that they agree with the following statement: "Digital held promise for brand marketers, but for all its promise, it has never delivered as a branding vehicle." If half (or more) of branding ad dollars are flowing into programmatic ad buying methods, I can understand why they agree with this statement.
The plot thickens when you layer in the delivery methods for audience targeting. Industry data has proven that users don't see or respond to many standard ad types, and have distain for pre-roll video ads -- all units commonly bought through programmatic methods. These formats don't give brand marketers a fighting chance to make powerful connections with users or inspire viewers to appreciate brands' messages (that is, if they see the ads at all).
Thus, digital marketers leaning towards efficiency and programmatic ad buying are ignoring the ultimate goal of brand advertising -- to make meaningful connections with real people. But it doesn't have to be this way.
Marketers should pivot away from blind automation and return to the true essence of advertising, which aims to cultivate emotional relationships with people through creative messages and intelligent delivery of those messages.
For example, creativity and thoughtful brand promotions is the reason McDonald's was just named Cannes Marketer of the Year. For decades, the company has spent time, energy and budget creating regional or global campaigns that inspire, entertain and touch viewers. The company continues in this tradition, regardless of any shiny automated technology available to them at cheap prices.
Can the automation that exists today deliver this caliber of creative advertising to make meaningful connections? Not yet. And clearly marketers are skeptical. Only 12% of U.S. senior ad agency executives polled said they trusted programmatic buying to properly or accurately execute their ad orders, says eMarketer, while over 60% of respondents didn't feel that the ad industry had an accurate and unified definition for it.
While I am skeptical, too, I'm not suggesting that digital marketers stop automated buying and selling. Programmatic ad buys executed via private exchanges with pre-scrubbed, premium inventory and effective delivery mechanisms can add value. But that doesn't mean it can deliver for branding objectives, which require marketers to make lasting connections with people. At least not yet.
To meet their key goals, digital brand marketers must intelligently use data and targeting -- coupled with high-impact ad placements that appear during moments when users understand why they're receiving messages. Only then can they make meaningful connections with the right audience in high-quality environments, where viewers will experience the value of their creative messages and engage with their brand.