The Dark Side of Programmatic Buying

Programmatic digital can be dicey when it comes to getting what you paid for and you should be concerned about fraud, bots, safety, and viewability issues that result in bad outcomes.

A few months ago a prospective client asked me to evaluate a small programmatic buy her agency had executed for her with one DSP. The agency thought the buy was great, given that they drove a CTR of .48%, higher than most campaigns with a CPM of $1.40. On the surface I would agree.

That is, until I looked at the source of clicks report. This was a small enough campaign, just under 10,000 clicks, that a simple scan of the source of the clicks made me question the real value of the campaign. Many of the URL’s were from out of the US (Belgium, Brazil, Malaysia to name a few) but his was supposed to be a US campaign. Many were from sites that I could not load if I tried. Many seemed to be legitimate sites, but the visits were very low quality and very brief. The average session time for clicks from this DSP was 1/3^rd to 1/4^th the next lowest referrer. Average page views were even lower.

I sent the source of clicks list to a third party fraud and safety expert for their opinion. About 50% of the clicks were “High Risk” for fraud and another 5% were “Suspect”.

So if this is true, the client’s CPC for real clicks just doubled, at a minimum. Since I knew which DSP was used I asked them for their opinion on the third party auditor’s findings. I was shocked at the response from the DSP salesperson; “we take brand safety very seriously and we’re more than happy to deliver on any parameters mandated.  Normally, during campaign negotiations we need to know in advance if a campaign is being measured by a third party and we’ll set up with daily reporting so that we can optimize out of those placements, sites, creative, and or content driving fraud.” 

Let me translate this for you. He said that if they knew we were going to look at a third party safety audit that they would not have delivered those impressions. Want to know what was worse? The CEO of the DSP echoed the same sentiments when I raised the issue up the line.

Fraud and bot clicks are going to happen. Clients and their partners who focus exclusively on getting the lowest CPM or CPC will find that they are actually paying more than they think for real inventory. Use a third party verification service for your campaigns, even if it is just to keep the people you’re giving money to honest.

For more info go to http://www.ocdmedia.com

The Television Data Shift

Today NBCU announced that it is going to be using data other than Nielsen to help marketers better identify audience value of their networks and programs. Linda Yaccarino, the head of sales for NBCU, thinks it puts TV on an even playing field with digital media’s data driven targeting, but in reality it does not.

Using data other than Nielsen ratings to decide which TV programming to buy ads in should be more commonplace today than it is. I’m glad that NBCU has made this step and hope others follow their lead, but to suggest that now TV is on equal footing with digital is a misstatement. Why? Because I cannot tell NBCU that I ONLY want my TV ad shown to those in their audience who exhibit the behavior I value. I still need to buy a TV ad in an entire program.

Don’t get me wrong, I think NBCU is taking a big stride in improving the way marketers make decisions on which TV shows to buy but any media planner worth their salt was already using other metrics and data streams. In truth, NBCU hasn’t even caught up with what can be done on TV with this move.

If a marketer wants to use addressable video ads delivered via TV there are already methods of doing that. Rather than place a buy with NBCU I would go directly to the cable provider. Remember, for many product categories the household is the buying unit, especially FMCG. Knowing which household is buying which laundry detergent is the most important consideration for Tide. The cable provider can tell me which households had a set that my ad (and my competitor’s ad) aired on based on set top box data. Many retailers can tell me which households bought which brand based on loyalty card data. A simple list match can reveal enough households to see whether advertising has any impact on sales, but more importantly new penetration.

The cable provider can execute addressable TV. I can “serve” different TV ads into different households based on their buying behaviors. Does Tide have an advantage they want to use to steal customers from Wisk? Is there a different benefit or incentive they want to use to lure away Cheer buyers? We can do that.

Thanks NBCU, but no thanks.

Digital Media Lacks Accountability

According to Bob Liodice, the President and CEO of the Association of National Advertisers that is. Speaking at the 4As conference Mr. Liodice suggested that digital is the least accountable of all media. Mediapost’s story on this can be seen here.

I’ll discuss his issues one by one:

Only 50% of ads are viewable. Digital media sell on addressability to specific audiences. Most other media sell on “real estate”. With a fixed amount of real estate and strong demand a medium can ask a higher price because they can sell all the space/time to a few marketers at the exclusion of others.  Digital media can sell to both, but they’ll sell a certain number of impressions to each and at a lower price. The result is multiple ads on a page, some of which are less or non viewable. A fixed position, less ad inventory model could mean more money for digital media because the supply of ad inventory would be reduced and the demand would be stagnant. TV, Radio and Magazines usually use an interruption model, meaning each ad is viewable/audible—but that does not make them any more effective. It just makes a marketer feel better because they have something more tangible to show for the media investment. People have always muted the ads, left the room or changed the channel.

Only 50% of every dollar spent in digital goes to the media itself. Digital media doesn’t have the ticket price that traditional media have. A single ad in a magazine can cost $50,000 or more. A network TV unit can easily cost $100,000 or more. A $10 million dollar TV budget buys ‘hundreds’ of occasions, yet that same investment in digital media theoretically buys as many ‘occasions’ as impressions. The traditional TV campaign might use one piece of creative so the cost of the execution is amortized over all the ad occasions.  So are media servicing, trafficking, billing, etc. Since digital media are addressable there will be multiple ad executions and sizes and more invoices than the TV buy for the same investment. More trafficking, more ad serving, more billing, just more hands and eyes involved in the process. If this point is true (that only 50% of every dollar spent in digital goes to the media itself) it is not a problem because part of a digital media campaign is having a place for people to go when they click. Each ad might have a different landing page or microsite, thus adding to the costs of digital marketing. 

The return on investment has been hugely disappointing. On the surface CTRs  seem to be a low number. Why? Because we can measure them. What is the response rate for a TV ad that is comparable to a CTR? There is no measurement. Don’t get caught up in the CTR measurement in and of itself. Digital ROI should be measured the same way as ALL other marketing investments, the impact it has on the purchase, mainly the first purchase by a new customer, against fully allocated costs (media, creative, operational).

An e-GRP measurement standard is needed.  This is a step backward for the industry. Digital media currently have a metric that tells us something more than simple ad serving, which is the best we can do for traditional media (other than DR). Why should we exchange a good metric for a bad one? GRPs have been used as the exclusive measure for traditional media for too long and are a relic of an age when aggregating impressions was the best the industry could measure. Yes, we’ve improved the measure over time to incorporate commercial exposure and DVR playback. Just because a TV ad is served doesn’t mean anyone ever sees it or takes note of it. Nielsen is doing a terrible job of estimating audiences. Rentrak has time and again proven to be a better indicator of commercial exposure.

I can understand Mr. Liodice’s perspective. He is the leader of a trade/lobbying association of advertisers. Where his perspective falls short is that digital is a marketing channel, not a media channel. I don’t see the ANA calling for the same standards on in-store marketing and/or trade programs.

Everything Old Is New Again

I get a kick out of folks who have only worked in new media and often times convince themselves that they invented some new technique ignoring all of the history that those who have worked in traditional media most of our lives ever did anything of note.

 I speak more specifically about content marketing and native advertising. First, content marketing and native advertising are not new. All that has happened recently is that new media folks have discovered them. Discover does not mean invent. Discover, by definition, is that someone found something that was already there.

 I managed media planning and buying for the Campbell’s Soup Company some 15 years ago. Guess what our most successful advertising was? It was recipes in magazines featuring soup as an ingredient. We ran these in food magazines and service magazines and most readers embraced the ads as if it were editorial in the magazine. These people were looking for recipes and the source was not important if the outcome was to their needs/standards. Does this qualify as content marketing?

A few years later I worked on the Victoria’s Secret advertising account. We put their annual fashion show on TV. The show featured the new line of merchandise with some entertainment (Mary J. Blige, Andrea Bocelli, etc.) and was funded by ads from Victoria’s Secret and other marketers. People tuned in to see the new line—and guys tuned in for the jiggle factor. It was a marketing message disguised as entertainment. Does this qualify as content marketing?

Magazines often offer paid advertisers ‘advertorials’; bonus space with content-like appeal written by either the editorial staff or, more often, the magazine’s marketing staff. These advertorials usually had a subject matter that was consistent with the editorial premise of the magazine. These are still done today and although editors almost always require the words “Paid Advertisement” stamped on top, if the content is of value the reader does not care. Does this qualify as native advertising?

I certainly hope that folks involved in new media continue to discover that some of our older ways have merit in their world as well as continue to develop new techniques that can only be executed via online/mobile.