David Rittenhouse
Aug 25, 2016

People have misunderstood what programmatic is all about

Speaking from a Japan perspective, David Rittenhouse argues that marketers need to stop delegating and take control of programmatic media if they want it to work for them.

David Rittenhouse
David Rittenhouse

“Automation is what programmatic is great at. The mistake people make is thinking that programmatic means you should be buying traffic on tiny websites and aggregating those into volume.”

This, concludes Jonah Goodhart, CEO of attention analytics company MOAT, is resulting in impressions sold in open ad exchanges resembling a ‘long tail’ of ‘abnormal inventory.’

Right now, when most people think of programmatic media, they think of impressions from anywhere and everywhere, made available through open ad exchanges. They think of massive scale and efficient pricing.

Right after that, they think of a long list of associated dangers and concerns. Lack of control. Non-transparency. Fraud. Rising use of ad blockers. Unviewable ads.

Yet it would be the wrong conclusion for these marketers not to use programmatic media.

A better conclusion would be for them to take control. Stop delegating understanding to ad tech intermediaries and start working with media companies directly that they choose themselves.

Premium programmatic: a good option

Recently at Advertising Week Asia, I participated with peers from CCI and Dentsu on a panel focused on premium programmatic. 

We covered a number of programmatic media models that fall between working directly with publisher sales-reps and completely non-premium, massively open ad exchanges.

These included private marketplaces and programmatic direct deals.

A few things have stayed with me since the discussion.

Effective marketing needs to be consumer focused. However, this logic has been used, perhaps too much, to focus on cookies (which are not exactly the same thing as consumers anyway) and not enough on context (the quality of the content environment in which the ad is delivered, and the consumer’s mindset).

People matter, but so do pages. This is important for brand marketers for whom driving awareness, which is the gateway to other persuasion metrics, is so important. Studies have shown strong correlations between perceptions of quality of advertising context and performance on brand metrics.

For now, the economics of open ad exchanges just aren’t right for quality publishers. Why would they share 50% of their revenue with technology providers? Why would they compete over price with publishers that aggregate and scrape content rather than investing in creating original material?

These publishers need better options.

Trials in Japan

Beyond talking about it at industry events, some brands are starting to trial premium programmatic media buying.

My own agency’s experience is that we are already seeing local private exchanges available in DSPs, though often, the packaged offerings are weaker than those offered directly.

Our limited performance data shows that, unsurprisingly, costs are higher in premium programmatic than open exchanges but page positions, viewability, and ad engagement are also better.

Advertising quality and engagement are the upsides, but these models manage downside risks associated with open exchanges like adjacency to inappropriate content and exposure to fraud as well.

There are advantages for publishers too, including more efficient operations allowing them to focus on higher-margin or more-strategic offerings (for example, new content marketing products, data products, and so on).

What’s next?

Right now, early participants in premium programmatic are creating a new market in Japan. It will take some time for this new market to develop. There are different aspects that need to be addressed from client readiness and change fatigue, to publisher interest and technical capability.

My perspective is that engaging quality publishers in programmatic is an obvious way to create new value for them, and for their marketing partners too.

David Rittenhouse is representative director of Neo@Ogilvy in Tokyo

Campaign Japan

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