Programmatic ad buying has increased significantly over the past two years, but future growth could stall unless marketers’ concerns are addressed, according to a new study by the Association of National Advertisers (ANA) and Forrester Research.
The study found that 79% of respondents have made programmatic buys in the past year, which is more than twice as many as in the 2014 survey (35%). Marketers are using programmatic buying most for online display, online video, mobile display, and mobile video. Next up, according to the study, will be social video, social display, and television.
“The key finding is that programmatic media buying has matured very, very quickly,” said Jim Nail, principal analyst, who led the research on behalf of Forrester. “Two years ago, the majority of marketers, while they’d heard of the term, hadn’t started using it and said they really needed to learn more about it before they could really use it. Now the vast majority of the respondents are using it and feel pretty well-informed about it.”
That’s the good news. The bad news: Almost 70% of respondents reported higher bot fraud in programmatic buys as a worry. Respondents also cited as challenges to the overall programmatic experience a lack of transparency regarding the costs associated within the programmatic supply chain, a lack of inventory and data transparency, and a dearth of information about whether an agency reaps financial gains from the media seller by using the client’s funds.
“While there’s enthusiasm and expectation they'll continue to use it and, in fact, use it in more and more, I think the prevalence of those concerns raises the question of how much can it grow and how much it can continue until some of those issues have resolved,” Nail told CMO.com in an exclusive interview.
As a result of their concerns, 31% of respondents said they have expanded their in-house capabilities to manage and oversee programmatic ad buying. In addition, marketers indicated they have taken steps in response to transparency concerns. Sixty-two percent said they have requested detailed campaign guidelines and reporting from agency partners, 51% have aggressively updated “blacklists,” and 42% now purchase inventory through private marketplaces that media companies have created.
“Marketers need to be more proactive in actually looking at the data and contracting for anti-fraud technologies, and then getting their partners to use it,” Nail said. “They should also include contract terms and terms and conditions in insertion orders to specify that fraudulent traffic will not be paid for, that the media companies must have policies and tools in place to minimize it and need to be very transparent about it.”
See what the Twitterverse is saying about programmatic advertising: