It is time for brands to embrace quality programmatic to reach their audiences, or risk irrelevance. Brands are investing more into digital marketing, acknowledging its role in connecting with consumers effectively in today’s screen-first environment. Digital ad spend in Asia Pacific (APAC) is expected to increase 18.2 percent to US$59.7 billion in 2016, overtaking the US.
Many brands continue to buy digital ads directly from publishers or from Facebook or Google Display Network (GDN). When it comes to automated buys, real-time bidding (RTB) and programmatic direct—brands contacting publishers individually—are the more common methods used by brands. Across these however, marketers and publishers face numerous challenges when programmatic isn't executed well, including multiple complex platforms, ad fraud, or ads delivered to irrelevant audiences. Platforms such as publishers’ alliances, or private marketplaces (PMPs) may help alleviate these concerns.
RTB continues to be a risky 'race to the bottom'
While RTB is automatic and more cost-efficient for both brands and publishers, marketers are not always able to reap the benefits of their digital ad buys. Besides paying for ads that may not reach the intended audience, brands worry about ad fraud, expected to be a US$50 billion problem globally by 2025.
The open environment of RTB can put the ads at risk of landing on websites that no human will see, sites that do not align with the campaign objectives, or sites that brands do not wish to be associated with. All in all, a real nightmare for marketers. While programmatic direct helps brands to avoid unsafe sites and guarantees ad impressions from specific publications, it is costly and inefficient as brands have to deal with multiple publishers on a one-to-one basis, manage numerous points of contacts, and handle different platforms/systems for just one campaign.
Publishers, on the other hand, are alarmed at what programmatic is doing to their CPMs, suppressing their revenue. This is largely due to competition from the duopoly of Google and Facebook which, with their data and insights into online behaviour, control a significant share of the market. Smaller publishers have difficulty competing, as brands are attracted to the power of data, which allows for better audience targeting and performance. Without extensive data, smaller publishers lack the ability to command premium pricing for their ad inventory.
Publishers’ Alliance is not an ideal solution
In Europe, Pangaea Alliance (UK) and La Place Média (France) are two publisher alliances created to address publishers’ declining revenue from RTB. Alliances allow smaller publishers to pool resources and sell their inventory as a bloc, to combat the powerhouses Google and Facebook. Through such an alliance, publishers can offer brands access to premium ad inventory targeting differentiated audience segments across multiple channels and platforms, with collective data insights for better audience targeting. By pooling resources, publishers can collectively answer brands’ needs, including access to audiences via multiple channels and platforms.
That said, publishers’ alliances are complex. They involve managing multiple stakeholders with separate, distinct identities and agendas; making decisions on profit sharing; building a consensus among different stakeholders; and managing relations between competing publishers. Compatibility of data and systems adds to the complexity, as different publishers use different platforms.
PMPs deliver effectiveness without the risk
Similar to publishers’ alliances, PMPs bring different publishers together and allow resource pooling. They provide an invite-only environment where publishers offer their quality ad inventory to a select group of advertisers. Through a single programmatic platform, brands have access to premium ad inventory from multiple publishers, across a variety of channels with different audience segments.
With this added layer of data and audience profiles, marketers can achieve better targeting, in addition to reaping benefits associated with automation, a safer environment, guaranteed quality and volume of inventory. The key advantage of these premium environments is the ability to identify, target and effectively engage relevant audience segments.
My company's real campaign data shows that the viewability rate for PMP ad buys is 77 percent higher than non-PMP ad buys with similar attributes. For video campaigns, between 70 and 90 percent of viewers complete an entire video, compared with 40 to 50 percent for non-PMP ad buys. These figures indicate PMP’s effectiveness in delivering stronger campaign impact, which drives better ROI. A win-win situation for both marketers and publishers.
Leverage the PMP platform
Asia remains behind America and the UK in terms of PMP adoption, largely because marketers are succumbing to pressure to deliver results with lower CPMs in the pursuit of efficiency. The industry needs to extract itself from this race to the bottom and exploit the real value in the higher CPMs offered by PMPs.
The digital space will continue to be a competitive one. Brands and publishers will find themselves in a more advantageous situation riding on this emerging marketplace that offers efficiency without compromising on effectiveness and relevance.
Deepika Nikhilender is CEO of CtrlShift