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28 November 2019

Programmatic tech failing on many levels, ML is predictable answer

Programmatic advertising has long promised a revolution, yet riches remain out of reach for the majority of the industry – as executives continue to bemoan the technology’s claims to eliminate most of the manual work involved in the buying process.

Two-thirds of senior executives at ad tech companies, agencies, advertisers and publishers believe that the future of programmatic advertising is automation, yet three-quarters believe the technology is not capable of delivering on promises today.

These findings come from marketing communications trade organization 4A and ad tech vendor Centro, which have teamed up to produce an intriguing report, titled The Future of Programmatic and Automation, based on the opinions of the very companies using programmatic platforms.

Disappointment in programmatic systems largely manifests as failing to deliver the right message to the right person at the right time. Comments from execs describe systems that fundamentally struggle to understand mindset and motivation – with some saying the technology has increased complexity rather than delivering simplicity.

More importantly though, how can companies realize programmatic inventory opportunities? The study birthed two central ideas about the future of programmatic advertising – firstly is about automation being fundamental, as we mentioned earlier, and the second is that TV must be part of the programmatic marketplace in order for all advertising to be data-driven.

As for how to achieve this automated future – which has so far failed to deliver promises of price discovery with the right audience – machine learning has been identified as the industry’s savior. There is little faith in today’s technology, with 50.2% of respondents saying that today’s programmatic algorithms do not reliably deliver real-time optimization without human involvement, while 35.2% said the contrary, and the remaining 13.7% were on the fence.

In addition, 45.2% of those surveyed agreed with the opinion that the array of inputs needed to reach the right person at the right time with the right message cannot currently be leveraged in programmatic advertising without higher-level automation enabled by AI.

As such, the number 1 priority for marketing and advertising automation in the next three years is a fully automated methodology used for flagging inventory for purchase based on predetermined audience and ROI criteria, voted as the top priority by a majority 41.1% of respondents. In second, with 37.9%, is higher levels of automation like AI to enable optimized activation across all marketing touchpoints.

“The early days of programmatic technology showed you could eliminate, theoretically, wasted impressions in the marketplace. Programmatic has increased the need for separate teams or separate people. It’s increased complexity. It’s ushered in a ton of new things that we weren’t dealing with before,” commented one anonymous ad tech company founder.

Lack of data interoperability has been identified as a primary hindrance to fully understanding campaigns. This interoperability hole comprises lack of identity resolution across the walled gardens and the rest of the ecosystem, as well as data from multiple sources that may not integrate accurately or at all, according to the report.

But an industry cannot thrive when there is such widespread misunderstanding, with 76.7% of senior executives acknowledging there is confusion about the differences between addressable TV, OTT video and connected TV.

Education is the best cure, yet multiple respondents even called for a centralized industry body to evaluate data quality to help prevent the issue of being unable to assess data coming in from walled gardens formed by the biggest video companies.

“There will be a time when almost all media is bought programmatically or is automated in some way. You just look across the entire landscape and look at the financial world, and media is the laggard. So, I don’t think there’s any way you could stop that,” was the consensus from an Advertising Director at a marketer firm.

Clearly the programmatic market is at an inflection point. It will go one of two ways, concludes the report. Either the strong growth in programmatic advertising will continue, or data science and automation breakthroughs will alter the very nature of advertising. Of course, programmatic buying, involving automation of trading inventory, can be deployed with or without addressability, or not at all.