Often times in marketing it can feel like we have been having the same conversation over and over for years on end. Sometimes it seems almost intentional. The internet spawned the start of attributable, granular, customer data that promised improved precision targeting and brand new impressions to hit with addressable messages. With our new, improved data in hand, we began building segments on segments. Piles of signals for all of us to use. The goal was to make our ad campaigns more efficient and eventually bringing the end to reach based metrics that were opaque and difficult to attribute to sales.
For anyone that has been around since the very beginning of the boom in digital advertising, we all know deep down that on any given day there are only so many available impressions. No agency broker will want to admit it, but the total “value” of all the ad space ever created is at least conceptually somewhat finite. Granted, we can get more screen time through addictive social media applications and more accessible mobile browsing capabilities, but ultimately every person has only so much time in their day to day to pay attention to our message. At some point we all have to work, live, and play.
Even when we are consuming content, we are still just spreading attention around. At some point, every additional impression is watered down. With all this “new” ad inventory we had to be, in some way, diluting the sauce. Shifting some small slice of attention from here to there, like a kid spreading his food around on the dinner plate to hide how much they’ve finished. The reality of media is that we only ever have “so much” premium space to make a material impact. Anything beyond that becomes either intrusive or goes unseen.
If you listen to the negotiation conversations with TV networks, sponsorships, DSPs and the like, you’ll always hear some impression deal guaranteeing exposure in a like-for-like setting. If you can’t get your premium programming during an intermission of “The Voice”, we’ll get you another set of digital space that is equal parts “targeted” and “high quality”. The big agencies do it as well through their black box consolidated pre-buying arms promising discounted inventory on like-for-like GRPs. But who is actually auditing “like for like” inventory? Who is auditing how it serves? Or against what programming? I can’t tell you how many ESPN CTV programs I’ve watched where the same commercial is airing so often I can literally hear it ringing in my head for hours on repeat. Or where the dreaded “Commercial Break” interstitial is pasted up on the screen with unfilled inventory during a primetime slot.
A sizable portion of digital inventory is just waste. No ambiguity about it. A whole other portion of it is not properly configured to manage impressions, frequency, or dayparts effectively. According to the ANA “the current $88 billion open web programmatic media ecosystem is riddled with as much as $20 billion in waste.” (ANA Provides First Look at In-Depth Programmatic Transparency Study, 2023). An impression on CTV is exactly the same as a linear spot, provided, of course, that it looks exactly the same and doesn’t drive you crazy watching it.
How does this happen?
The buying model is broken. We’re incentivized by the wrong objectives which are reach, scale, and cheap CPMs. (ANA Provides First Look at In-Depth Programmatic Transparency Study). The whole ecosystem reminds me of the Mortgage Backed Security market back in the mid 2000’s. Taking bundles and tranches of A, AA, AAA assets and mashing them together with junk bonds to make a “top tier investment”. These bundles were so obfuscated that you could make a full time job of trying to unpack what was really inside them. The rating agencies were in on it, the banks, and the brokers. In some form of another it was either active deceit or active ignorance. Why? Because of the money. The incentives were misplaced.
The entire digital landscape has been operating in much the same way for almost 2 decades. Google Display Network, for example, still doesn’t provide a standard blacklist or any form of inventory controls. This forces advertisers to either create their own lists slowly over time by spending wastefully in network, or to simply ignore the fact that the vast majority of the sites are just made-for-advertising properties filled with click bait. Most choose to just accept the waste as a cost of doing business.
Just about every DSP will point you to some form of behavioral targets or audience options to pump your CPMs and promise a better return, knowing full well that a large portion of their blended ad inventory is still worthless. The buy will be more efficient, and it likely may show incremental value to the business, but there is still a lot of waste and the reality is there does not need to be. Unfortunately, very few professionals and clients are auditing site quality because we’re all addicted to vanity metrics. Most DSPs behind closed doors will admit that without the junk blended in, they simply wouldn’t be able to deliver on promised impressions. Most clients have not bought into the idea of higher price for higher quality, so instead they pad the metrics with “legitimate inventory”.
At the day to day level, this isn’t malicious, but it is pervasive. Let’s also not just bucket the DSPs as being at fault. Every publisher is using blended inventory to sell more, cheap impressions and “show you added value”. Just look at the extended ad networks surrounding paid search and paid social. What is an partner network for Facebook anyway? What properties could that possibly include? How much of that is value-add for a brand? And what is the purpose of even buying anything through a Run of Network buy in Meta or Tiktok?
At Cimply we are privileged to be able to see things from both sides. The advertiser isn’t really incentivized to do much more because 1) advertising works – if it didn’t we wouldn’t advertise and 2) there is a lot of money in making clients happy – if your client wants inexpensive reach then you give them what they want. Savings goals are some of the most common ways this conversation evolves. Agencies are digging in every corner to get you a 2% media savings to beat inflation. But again, at what cost to the business? It’s a conversation worth having.
We’re lucky in that when someone asks for our perspective, we can help force the conversation about what is going to drive business results over vanity metrics. Frank discussion on these types of concepts can really get to the root of what value means in the marketing ecosystem and rework the model. The reality is that best-in-class media execution requires a considerable amount of time, planning, and care. And it is probably more expensive per eyeball, but it’s worth thinking about from the perspective of having a conversation. You’re probably going to have a better business conversation at a trade show than a shopping mall.
What can be done?
First and foremost, you might enjoy reading this ANA Whitepaper on the state of programmatic. This popped up while doing research for this article and it is an excellent framework for how to future proof your programmatic objectives and buys.
To summarize some key points, clients need to pay attention to the relationship between their agency and the demand side ecosystem. Agency relationships are complicated and require care and collaboration to be effective. They need direction and clarity on what translates to business success. There is also a strong need for rigor around fulfillment as much as procurement. Setting good expectations is one piece of the puzzle, but fulfillment on that contract is equally as important. Maintaining an active role in your agency’s practice and setting clear expectations is critical. Even though we hire agencies because we are looking for expertise or experience, we have to remember that they can’t understand your business the same way you can. You want to incentivize quality plans and buys.
Test quality based inventory campaigns and measure results. Quality driven results that tie directly or indirectly to revenue can help you level-set expectations. This may mean starting fresh and ignoring past results for benchmarking which can be painful manage. Change management across your organization when these principles aren’t widely understood can take time and a lot of effort.
Focus on selected site partners and inclusion lists rather than run of network buys. Work with agency partners that understand and value the need to pick the right placements for your business based on sound business logic, firmographics, and quality. Not everything needs to be bought this way, but you should have partners that are dedicated to getting this right at the domain level. This will ensure you’ve minimized your waste even before you start layering in audience targets and other material optimizations.
Write-in terms and conditions for measurement, viewability, and ad fraud into all your contracts. Inventory should be measurable down to the impression level and reporting should be as well. In an ideal world your first-party data layer would be used in every placement you set live. But if you are just starting to think of a change, and have historically been less focused on programmatic quality, at the very least, you should be dealing with these contractual requirements as renewals come up. Contracts are a great place to figure out if your agencies are partners or contractors. You want them to want you to succeed and hold themselves to a high standard of service.
Pay attention to what is being bought, be an active inquirer, and continue to find optimizations to stay ahead of the game. Agency feedback is great and often full of thought leadership and care. But stay critical and conscious of what is being bought on your behalf. Think about conflicts of interest. Ask: what is being delivered as added value? How many Made for Advertising sites are in my buy? What are my view ability rates? Then work with your agencies to push for make goods. You want to understand the supply and you want to show your agencies and vendors that you are paying attention.
Hopefully this content helps you on your journey to spend smartly and drive results. Feel free to contact us with any questions or comments. We’d love to hear about your experiences and projects.