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Common Programmatic Advertising Challenges

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Dmitriy Shelepin
Common Programmatic Advertising Challenges

Over 80% of the total US digital display ad spending will be poured on programmatic advertising, according to estimates by eMarketer. This year programmatic advertising is estimated to grow by 20 percent to reach $39 billion and $45 billion in 2019.  The same study reveals that 63 percent of B2B marketers in the US now employ automated methodology, while 64 percent will very likely include programmatic in their marketing campaign.

Without a doubt, programmatic advertising is the future of digital marketing. With a promise of efficiency and reliability requiring minimal effort and fewer resources, this new advertising channel continues to attract advertisers. However, an account specialist from programmatic advertising company War Room warns that like any other digital advertising strategy, programmatic advertising is not devoid of challenges.

Common challenges in programmatic advertising

Here we list down some of the challenges and issues with programmatic advertising.

  •         Lack of transparency: One of the biggest challenges with programmatic comes with the transparency of the ads, such as where they are being posted, their placement, who sees them, etc. Some agency trading platforms have also been accused of concealing information about their margins. As a result, advertisers are inclined to directly negotiate contracts with multiple tech partners or work with independent trading platforms. However, as buyers become more vigilant, sellers are forced to employ measures to improve trackability and transparency.
  •         Fraud: An ever-present issue in the digital media landscape, fraud is considered the major turn off for many would-be programmatic ads buyers. The adaption of more secure purchasing methods is underway and is poised to help reduce losses due to digital fraud.
  •         Lack of understanding: Knowledge and skills gap is quite understandable especially for a relatively new technology. To overcome this issue, staff training and community support are necessary. Another option is to get people who have skill-sets that are at least close to programmatic advertising. It is also imperative for brands to learn how to integrate programmatic with their overall marketing and sales campaign.
  •         Metrics and measurement: A common issue with programmatic is the lack of access to accurate and detailed metrics to help marketers quantify the results of their ad campaigns. Marketers still find a difficult time capturing accurate metrics that reflect ROI. However, there are vendors or tools that provide this feature.
  •         Lack of control: The programmatic advertising eco-system is riddled with too many layers. The need to reach multiple channels can complicate the entire process of automated advertising. Aside from this barrier, marketers also feel that within each channel, they have very limited control as to how ads will be displayed.
  •    Cross-platform adaptability: At present, programmatic is heavily focused on desktop ads. However, considering the ever growing number of mobile users, video and mobile programmatic spending is estimated to be the next big thing. Unfortunately, many advertisers are stuck with Flash banners that are not accessible on mobile, or ads that are not optimized for mobiles. These ads are uncomfortable to view. As such, there is a need for digital advertisers to explore and focus on building ads that are compatible across different platforms.
  •         Inventory quality: In programmatic marketing, advertisers are left with no choice but use the content provided by agencies. Unfortunately, inventory quality is not guaranteed as the agencies are often unwilling to reveal exactly where ads will be posted. Marketers complain that their ads are being shown below the line or seen mostly by bots, resulting in inaccurate metrics.
  •         Audience targeting: 31 percent of US marketers find targeting as a challenge that programmatic advertising needs to solve. Ads bought through programmatic advertising are not displayed to their intended audience. Often, you will need to pay to get your ads to a more segmented audience. Better-defined objective and campaigns need to be put in place to enhance audience targeting.

Conclusion

As with any other revolutionary technology, programmatic advertising comes with issues and challenges. However, looking into the benefits and advancements of this technology, one can easily say that they outweigh any short-term challenges. With all eyes on programmatic advertising, we can just hope that the industry can find ways to solve these issues in the near future.

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Dmitriy Shelepin
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