Who’s Afraid Of The Open Exchanges?

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jimcaruso"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jim Caruso, vice president of product strategy at Varick Media Management.

Programmatic buying has always been dogged by the reputation that it accesses remnant inventory from less desirable publishers – cheap long-tail inventory that is a poor fit for established brands. There’s still a lot of confusion and misperception floating through the industry. This reputation short-changes data-driven targeting.

Agencies and brands can currently buy on the exchanges with highly targeted, crystal clear white lists that take into account the placements, sizes, sections and sites where they want their ads to run. Blind bidding on opaque inventory is indeed an option, but it is a circumstance that is completely guided by the user making that choice when building a campaign, which, in many cases, is the agency.

The idea that brands can be tarnished because auctions are free-for-alls open to any advertiser with a seat on a DSP is an equally laughable idea. It’s irrelevant who else is participating in an auction. If a publisher is willing to white list an advertiser – including those that are of lesser “quality” (an unclear term if there ever was one) – and that advertiser wins the bid, then their ad appears. The thing to keep in mind is that almost every reputable publisher employs dozens of measures to prevent undesirable ads from appearing on their site, through the use of category, advertiser and creative-level blocks.

If brands and their agencies make use of these channels and choices, there is very little wasted inventory. If a client wants to run on NPR.org, then the campaign should be set up to only appear on NPR. No programmatic system prevents a client from running a white-list open auction campaign. For a higher level of control, a programmatic guaranteed solution also allows access to direct publisher inventory.

Bigger holding companies and their advertising partners like to think they have a market advantage. Programmatic technology disrupts that traditional advantage. But that isn’t to say that small agencies and family businesses compete on the same level as Fortune 100 brands. Few, if any, of the platforms or DSPs in the market today allow for such small-scale shops to directly participate, not only because it doesn’t make economical sense for the DSPs to support such small budgets, but also because it doesn’t make much sense for those small shops to use programmatic as their primary marketing tool.

Many SMBs continue to spend their online budgets on SEM, which allows for local and intent-based reach. It’s much cheaper than taking the time and effort to ramp up and run a large display, programmatic campaign.

The main thing that big advertisers should focus on is hitting their KPIs, so this should always be the agency’s primary objective, no matter how it is obtained. If a luxury auto brand wants to increase test drives, then what matters is who shows up at the dealership, not the sites the ads appeared on or the bid prices. If the advertiser wants to reach qualified audiences that can afford the vehicle and live within a certain area, they have data options to better reach that specific segment. That still doesn’t mean the only way to reach those consumers is on household name websites.

In truth, the only thing that can be wasted on the open exchanges is time. Setting up a campaign without the correct safety and targeting parameters is just that – a waste of time. Complaining about the supposed poor qualities of programmatic without taking the time to correct them or use the available tools is a fool’s errand, and something we’re best ignoring.

Follow Varick Media Management (@VarickMedia) and AdExchanger (@adexchanger) on Twitter.

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