The state of programmatic and adtech

Since the turn of the year we are already seeing a mood change from clients regarding the perception of programmatic. This is likely to have been invoked by P&G’s Marc Pritchard and his thought provoking iAB talk in which he claims that he is looking to review all agency contracts to ensure that fraudulent activity in the supply chain is eradicated.

Fraud in adtech is no stranger

In fact, the numbers are getting worse as investment in media buying technology grows. According to research commissioned by the Association of National Advertisers (ANA), advertisers will lose $7.2bn to bot fraud this year. Up from $6.3bn in 2015. The ad industry has been slow to address this issue. Google, in a blog post this year, claimed to have blocked more than 780 million ads last year for policy violations. Other companies such as Integral Ad Science and Moat are offering 3rd party tools to verify ads. It’s tip of the iceberg stuff and as advertising shifts to digital, fraud will continue to grow – especially on mobile.

Do we turn our backs on adtech to eradicate this?

Traditionally, when a brand hires a media agency, they buy into their strategic direction for the brand. They will trust that agency to understand the company and its audience, and will negotiate directly with suppliers to buy their ad space. The brand is buying talent and creativity. In media, the discussion has moved away from planning and switched to placing trust in powerful algorithms that use thousands of data points to find the right customer. We are placing an unjustified amount of faith in programmatic technology and opening ourselves up to fraud.

Do we have a choice?

The sheer volume of data being gathered can no longer be processed efficiently by humans. In fact, a 2016 report by the World Economic Forum suggested that AI and other technologies (such as media buying) will result in a global loss of five million jobs by 2020. Unfortunately, this isn’t going to go away.

What’s the answer?

Well clearly, the industry is crying out for experts to take the lead in trying to clean up the industry and regain clients trust in adtech which is on the wane. A report conducted in 2016 by Exchange Wire actually saw a decrease in confidence in programmatic with participants seeing a noticeable decrease in traffic quality YoY. One assumption is that a drop in trust comes with a conscious effort to bridge the learning gap. Alarmingly, a 2015 iAB survey found that 44% had little or no knowledge of programmatic. If we compare this to figures of 50-60% of ad spend going through programmatic globally in the same year, you would expect knowledge levels to be significantly higher.

While the machines are here to stay, the media industry still requires experts to take a lead to ensure that our knowledge of the buying procedure (and deciphering good from bad) matches our investment in adtech.