Programmatic advertising is dying but not dead

OK so it’s 2012. Coming out of the depths of sustained economic unrest, there is increased hype around a “new” way of acquiring customers online. Everyone selling it, everyone building it and everyone adding it to media plans all get together and decide to collude in the argument that this isn’t nonsense and is in fact…. brilliant. We all agree to gloss over the inherent failings in this channel as part of a wider marketing mix. We all agree to blindly ignore the issues of transparency and viewability. We all agree to overstate the sophistication of this channel.

We call it programmatic.

We sold it hard. To anyone who’d listen. We built campaigns with loose targeting, questionable data-protection efforts, intensely poor age verification and vehemently put it live. To our surprise, it worked. There were nominal increases in incremental acquisition alongside huge reach. Conversions came in, search volume rose. If you compared this on an OTS basis to traditional media, programmatic walked all over it. The agency game changed and with it the larger groups scrambled to acquire technology businesses and, unsurprisingly, lofty valuations started to come to light. Five, six, seven x revenue? Try 30. The smaller players, born out of networks and publishing houses, started to be encroached upon by Google. Of course, Facebook followed. Fast forward to 2016 and my own business, Crave & Lamb, was acquired at a time when the likes of GroupM were billing their mPlatform as the future of digital media buying, only for it to now be pushed into the background.

For me, the highs of December 2016 fell relatively flat just five months later. I was sat in the CEO’s office of Ve Interactive, the business that had acquired us, listening to the news that they had gone bust, in a heavily publicised example of wild overspending, intense mismanagement and a total disregard for the bottom line. In came a new team who directed the previous management to sit at the kids’ table while the grown-ups occupied the boardroom. The turnaround began and they were a welcome arrival. It was a firm example of boom and bust in an industry that had lost the plot. Where did it go wrong in five short years and what has happened since?

Notably we got too clever with programmatic and tried to get it to solve too many problems. Trust disappeared as clients began to understand there was a tech tax they’d been paying for years that they had no idea about – and let’s not open the can of worms labelled “kickbacks”. The world then started to ignore advertising online and adblockers became a normal addition to any browser. Mobile traffic finally took over desktop traffic and we failed to move quickly enough, as a body, to make programmatic for mobile an experience that customers would engage with. Eyeballs moved from the big black box in the corner of your lounge, to the small black box on your laps, to the tiny black box in your hands. Ultimately what used to work didn’t anymore.

It is critical to remember that this channel did once work. It drove lift and generated real views in an efficient manner. It was also highly flexible, automated and able to build algorithms around campaigns. There was one crucial issue that led to the failing of this channel, in my humble opinion, and that is that the technology (and those who controlled it) failed to recognise the way that consumer behaviour changed. We over targeted, became over sophisticated and didn’t meet client concerns over transparency quickly enough. The channel became brilliant at predicting when customers were about to convert and even more brilliant at showing them an ad just before they did. “We’ll claim that conversion thanks.”

Making programmatic work

Now I’m sat on the other side of the table, client side, as the head of global marketing at Marathonbet, it’s interesting to see how the conversation has shifted in the three years since I left the programmatic game. In fact, some haven’t changed their approach at all, but others have worked out that there are key considerations you need to make in order for this channel work:

– Transparency is a given, not a benefit.

– There is no need to over target. Being too clever often results in failure. We are not as predictable as a machine might think we are.

– Gambling is different to every other vertical and it needs to be treated carefully. There’s no need to remind me that Premier League football takes place on weekends, mostly.

– Whitelisting is critical.

– Clients should have control; suppliers should offer expertise.

– Measurements of success need to be clearly defined and accurate. The client should verify this amid their internal systems.

– Creative has to change frequently and dynamically.

– Programmatic needs to work with other channels, specifically CRM and SEM. It is important to know how they interact and how to measure it.

There are businesses who are doing this. The consultancy Digital Decisions are breaking down complexities in this channel and cutting through the top layer to find the real value underneath. From an agency perspective, Tomorrow TTH offers interesting solutions around how programmatic interacts with other channels, specifically in this industry. The technology supplier, Scenestealer, has a terrific dynamic solution to enable highly flexible creative optimisation and of course if you are not measuring effectively using a platform like Google360, you will always struggle to gain the insight you need in order to ascertain whether this channel works for you or not.

I wrote a post on LinkedIn a few months ago asking if programmatic was dead. In its current guise, I have no doubt that it is but in order for it to flourish in the way it used to, suppliers will need to be honest about their offering, clients will need to be honest about their expectations, and agencies will need to be honest about the value they can add. Ultimately if the tripod exists where clients own the technology contracts and agencies are brought in for expertise this can work. We’ll see what happens with ICO updates in the coming months and how suppliers deal with cookie-less tracking.

Let’s be clear though, the platform that moves quickest alongside changing customer behaviour will win first. The time for shouting the loudest at would-be customers has to end and everything today is about how you engage with prospects and concisely communicate your offering to them. Can you remember your favourite TV ad from the last 10 years? Of course, you can. What about your favourite banner ad from the last 10 days? No idea.

Sam Behar is the head of marketing at Marathonbet and oversees all global marketing efforts across Europe, Asia, CIS, Africa and Latin America. He previously founded the independent media agency Crave & Lamb and has extensive experience in gambling, having run campaigns for a wide variety of operators across the globe.