It’s Time To Fix Programmatic Creative

mikezemanbrandaware“Brand Aware” explores the data-driven digital ad ecosystem from the marketer’s point of view. 

Today’s column is by Mike Zeman, director of North American digital marketing at Netflix.

Numerous studies have outlined the importance of impactful creative in successful advertising campaigns. Many have shown that creative variables, such as messaging, formats and aesthetics, account for more than half of the total sales impact of a campaign, with less than 50% due to media variables such as targeting, weight, etc.

So, why is it that – unlike TV and print – creative consistently takes a back seat to media (inventory and targeting) in the digital space? Why is creative often an afterthought where agencies are given too little time to do great creative work or assets are handed over to publishers just hours before a campaign is meant to launch?

I don’t necessarily know the answer but I do have two hypotheses:

  1. Digital ads are simply not as sexy as audio/visual ads, especially TV spots.
  2. It doesn’t cost a half million to produce a digital ad like it does a TV spot.

Both of these dynamics equate to a lack of marketer focus on digital creative, particularly in comparison to the potential multimillion-dollar media campaign it will run on.

While this is not news, it is a shame as programmatic buying continues its progression. RTB has opened up entirely new possibilities for aligning a message to a consumer and his or her context.

Never before has the adage of “right message to right user at the right time” been more in reach. In fact, it has been made even more powerful by the technologies the programmatic media ecosystem has brought to bear. A marketer who chooses to could employ a strategy of “right message to the right person at the right time on the right device on the right operating system at the right geofenced location during the right weather conditions …” In other words, the possibilities of highly relevant, “context-aware” advertising have never been greater. And yet, a one-size-fits-all creative strategy largely reigns supreme.

Along those lines, here are some specific obstacles to overcome.

  • Many of the programmatic advertisers and agencies with whom I have spoken are at the mercy of assets created for direct buys. In other words, they do not have creative budgets allocated to their channels and must simply reuse what was already developed.
  • The open exchange ecosystem lacks a breadth of rich media formats. While some firms, such as Skinected, are doing a good job of evolving this space, there are both technical issues (limits of those pesky cross-domain iFrames) and philosophical issues (publishers not opening up premium formats) that require further work.
  • There remains a lack of integration between the rich media purveyors and the third-party data provisioners. What marketers are looking for is a one-stop shop for dynamic creative (leveraging one IO to cover thousands of potential data attributes in a dynamic creative ad unit). This is happening in pockets but has a long way to go.

While these industrywide issues won’t be resolved overnight, there are few things marketers can do to address individual situations:

  1. Reposition the digital creative conversation. Turn the dialogue away from the relatively low cost of producing digital assets and toward the opportunity (and opportunity cost) around the value of your creative. (If you believe the stat in the opening paragraph, 50% of your working media investment is the true value at stake.)
  2. Think about creative production budgeting in two ways: creative for environments and creative for audiences. As most advertisers leverage both placement-driven buys and target-driven buys, appropriate funding should be set aside for both.
  3. Work with your rich media provider(s) to better integrate with third-party data providers/DMPs (and with your own first-party data if appropriate). Sticks may work to force the integration but carrots are always better (“We will commit to X on an integrated solution if it means only one IO, one primary POC, one integrated set of reports, etc.”)
  4. Turn to programmatic direct to unlock additional rich media opportunities. This includes not only additional ad sizes, but ad formats that break the creative limits, such as file size and expand constraints, to which the space has been largely beholden.

In the end, great creative can overcome a poor media plan. But I don’t think the opposite is true. Those that can marry the two (resonant creative which is environment-aware) stand to gain a huge advantage in the minds and wallets of consumers.

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  1. Ian Trider

    Great article. In addition, it’s worth remembering that the programmatic space allows us to empirically test and measure creatives. This will always be a struggle for those who design the creative, because their mindset is often about what seems to be a good creative idea rather than what actually results in measurable success. Rationalizing that conflict will help get us to a point of truly amazing web creative.

  2. The issue of creative being is not so much about a programmatic world, but about digital media in general. Creativity has just not been applied across the board in digital display. That said, the era of programmatic makes the issue that much more obvious AND provides an opportunity for the industry to correct the errors of the past. The potential ‘always on’ campaign that programmatic media allows for calls out for the right creative to the right person. Programmatic Creative , meaning having the tools to do this, is an important element of the programmatic world. In addition to the creative assets being interesting and targeted, there are new opportunities to deal with cost, testing, etc.

  3. This is a great article, and good follow-up comment from Ian. I think the challenges in digital creative measurement and optimization are twofold: 1) be able to systematically all creative choices, not just measure a few of your own ads and 2) have alternative measures of success for the creative depending on it’s objective. . Not all ads/campaigns fit into the one performance metric such as CTR. Having the right metric for campaign success will rationalize the conflict between creative ideas and performance.

  4. Generally creatives take up to 15% of an ad budget, yet accounts for 50% of the performance so it is indeed surprising that people aren’t investing more in this part. Creative consistently takes a back seat to media though because of capabilities of the agencies.

    To generate custom ads tailored to each audience would require agencies to either (1) use existing talent to generate multiple display ads with different copy/design OR (2) program a rich media dynamic creative that can churn it out automatically. Both require a lot of time and different sets of capabilities.

    (1) is the most do-able for agencies since they have the people to do it but “creative” types and even “designers” are loathed to be working on the display campaign relative to “big ideas,” “strategy,” and richer formats like video. Typically at a large agency it’s because they are focused much more on top-funnel brand advertising instead of mid-funnel new customer acquisition or lower-funnel re-targeting which are more performance oriented. They rather work on the big idea of the brand basically except they are tasked often with still making the humble banner ad. Technology/automation will eventually need to step in there so multiple original ads can be built much faster for all sizes and formats and messages.

    (2) Programming a richer ad that self-adjusts is just way more complicated and requires much more skills than the average designer or creative wants to learn or deploy for something like this. So some people have to use engineers or people especially trained on this which adds significantly to the cost of ad production. Once the upfront work is invested in though, it’s obviously trivial to automate the rotation of messaging to the right audience.

    Bottom-line, agencies need to invest in technology or technology talent to get this done. Once they realize that creatives can be made scalable just like media or that they’ll get more bang for their buck in their investment in creative over media, I believe they will invest more in creative.

  5. Mike – thoughtful and brilliant as always.

    The digital advertising industry is confused on this topic because the leaders of this industry learned the advertising business during the “dot com recovery” that defined the past decade.

    Under a much bigger umbrella, advertising investments are organized around two distinct objectives. One is an investment in brand strength and the other is Direct Response – which is an investment in a linear sales result.

    Over the past ten years, digital advertising spend has grown from about $7 billion to roughly $38 billion. Ad agencies fight me on this but the reality is that almost all of the growth came from four sources of funding; 1) telemarketing, 2) direct mail, 3) classified ads in newspapers and 4) Yellow Pages.

    (We know that the growth didn’t come from TV because the 100 LNA spending on national TV over the past 10 years grew from $60 billion to $69 billion.)

    The growth came from direct response budgets and the objectives did not change just because they moved into a new and better channel.

    Direct Response advertising is 10% concerned with the content of the ad and 90% concerned with the efficiency of the channel.

    Brand advertising is 90% concerned about content of the creative message and 10% concerned about channel optimization. When a TV campaign with BRAND building objectives under-performs, nobody is breaking down NBC’s performance versus CNN or The History Channel. Leo Burnett takes the heat, not FOX.

    The digital industry could have used the evolution to broadband from dial-up as bandwidth that made very powerful and engaging display ads possible. Instead, the industry chose to use the new bandwidth to allow 100 ad-tech firms to bid in real time auctions for one ad impression. This choice is good for direct response optimization but we still end the bidding process by serving an ad that looks little improved over the ads we were serving when we had 14.4 baud modems.

    In fairness, the display advertising industry succumbed to immense pressure from Wall Street to “be like Google” and so companies like Yahoo! neglected home page takeovers and instead invested in the Right Media Exhange.

    We chose this path because we were super-serving the needs of direct response campaigns and frankly, our leadership had a lot of disdain for TV campaigns that build brand equity — collectively, we still think of TV advertising as a dumb analog legacy and that’s why your brilliant question remains so horribly neglected by the digerati.

    CAUTION – an industry that wants to make great creative content a key part of the advertising value equation actually needs to keep human beings in the mix. We are rewarded for turning everything into a SaaS product now and those tools fall short if building and protecting strong brands is the core goal of the advertising investment.

    • Mike Zeman

      Couldn’t agree more on all of your points. Very thoughtful commentary.

    • Alejandro Correa

      the idea that additional bandwidth may have been invested to make ads more “engaging” is very interesting but I’m not sure it would have ultimately benefited the industry. When you say ads could have been made “more engaging” I suppose you mean bigger, flashier, noisier and otherwise more interruptive. If the internet is, by design, a medium that requires the user to actively drive the content they consume, ads that distract a user from doing that are a recipe for disaster. This goes double for smaller devices. Media’s focus is ripe for a shift from targeting to creative, but I am skeptical that “heavier” assets are going to perform better than those that communicate a brand’s value as parsimoniously and efficiently as possible. To me, it seems the way to do this is through greater personalization, not necessarily more involved creative execution.

  6. I think this hypothesis is especially true: “It doesn’t cost a half million to produce a digital ad like it does a TV spot.”

    The majority of today’s digital ads are very inexpensive to produce, and agency revenue depends on the mark-up they’re able to charge. To excel in digital ad creative, an agency has to commit to smaller average deal sizes, along with the increased overhead that’s required to handle a larger number of simultaneous projects. Both of these factors diminish profitability both overall and on a per-campaign/per-client basis.

    Additionally, the switching cost to ditch an agency and get your banner ads made somewhere else are quite low, so an agency has less opportunity to build long-term goodwill, and whatever goodwill they do build is very tenuous.

    So economically speaking, agencies have an incentive to steer client resources away from small-time digital ads to bigger, more profitable stuff that requires a bigger commitment from the client.

    I agree that programmatic/dynamic creative has the potential to breathe new life into digital ad creative, if for no other reason than it requires a larger financial and longer term commitment from advertisers. You can get a basic banner ad made anywhere, but once you find a programmatic creative vendor that you like, you’re in it for the long haul and the switching costs are quite high.

    Additionally, the moving parts of programmatic creative are not easy for the average client-sider to understand. This presents an opportunity for agencies (or other types of vendors…my own company included) to add value by simplifying the process and acting in partnership with clients (basically the business definition of an “agent”).

  7. Dave Stevenson

    Creative consistently takes a back seat to media because good creative requires a large amount of storage and currently a standard placement is measured in KB by AIB standards. It is simply not affordable at scale to produce extremely eye catching and interactive standard units. Additionally, Publishers limit the amount of “rich media” that can be utilized, making that a very small portion of media budgets.

    There are several “creative optimization” companies using technology to solve these problems. Spongecell is one in particular that allows rich media like functions within a standard placement at a small premium. These companies are gaining a bit of traction but are generally an after thought of agencies and mixed as a package with ad network deals. Like many of the issues in this industry this one revolves around lack of education. As agencies become aware of the technology available to them as the creative optimization platforms are integrated with programatic buying tools we will likely see a change towards better creative in display.