Programmatic online advertising might be grabbing the lion’s share of marketing budgets but a combination of client naivety and agencies’ continued use of “smoke and mirrors” is increasing fears that the discipline is wide open to abuse.
That is according to a new study by digital agency QueryClick, which quizzed 150 marketing chiefs at the UK’s major advertisers and publishers and exposes a growing lack of transparency in the sector.
The findings reveal that only 40% of major advertisers are confident that more than half of their online ads have been seen by people in the past 12 months, with just 7% saying they thought the proportion viewed by humans rather than bots was 80% or more.
Nine out of ten said that they believed that the lack of transparency in their programmatic ad campaigns is because the ad buying platform (DSP) they use is owned by their marketing agency.
One advertiser said: “The client side is reasonably naive as to what can be done, while the agencies and trading desks on the tech side are very knowledgeable and have a lot of visibility. It’s very easy to pull the wool over the clients’ eyes.”
In response, a major publisher commented, “They don’t know what questions to ask. I could count on one hand how many times I’ve been questioned about where our data is from.”
This lack of transparency has resulted in reports of big name brands appearing next to highly offensive content. The report found that 80% of online ad buyers are worried that their current programmatic processes could lead to their ads appearing on web pages related to terror activities.
The opinions in the report suggest that many brands feel tied to programmatic campaigns, with the audiences they want increasingly found online, big agencies snapping up much of the premium ad space, and buyers being tied into contracts.
Despite four out of ten (41%) advertisers admitting that they have lost trust in programmatic advertising as a result of this type of fraud, 70% are still planning to maintain or even increase their programmatic spend over the next 12 months.
An advertiser from one major e-commerce brand commented: “Without more stringent checks on agencies, publishers and platforms, brands remain exposed. There is no verification. They can literally say whatever they want, and get away with it every time.”
Both the brands and publishers who offered comment in the report called for greater collaboration among those operating in the programmatic industry. The buyers surveyed said that they want to see regulation with some teeth, 85% said independent trade bodies, such as the IAB, should have more authority to monitor and penalise those knowingly committing ad fraud.
The publishers selling the advertising space agree, however, they expressed concerns about introducing regulatory ‘red tape’. One publisher said: “In the finance industry, there are fewer and fewer traders and more and more compliance people, and I don’t want to see that ever happen here, even if I do want some regulation. We need to find a way to regulate the industry without killing it.”
QueryClick founder and managing director Chris Liversidge said: “Despite it being on the rise, programmatic advertising is wide open to abuse. Recent studies have put the cost of digital advertising fraud as high as $31bn. That makes digital ad fraud not just more costly than any form of cybercrime, but more costly than offline crimes such as counterfeit goods and payment card fraud.
“Publishers are on the front line in the battle against advertising fraud. They have a duty to educate both brands and agencies on programmatic processes to ensure transparency. However, brands can take steps to protect themselves too.
“First, where possible, they should separate their programmatic campaigns so they are given the consideration – and performance measures – their growing size warrants. Secondly, they should unbundle their agency relationship from the programmatic platform, to enable them to seek out independent providers that offer true transparency and protection from the risks of current programmatic campaigns.
“In doing so they will not only significantly reduce their exposure to waste and damage to their brand reputation from fraud, but also start to see programmatic begin to deliver on its promise.”
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